27 October 2017

Mozambique: China Cancels Part of Mozambique's Debt

Photo: World Bank
(File photo).

Maputo — The Chinese government on Thursday announced the partial cancellation of Mozambique's debt to China.

The announcement came during a ceremony in Maputo at which Deputy Foreign Minister Nyeleti Mondlane and the Chinese ambassador, Su Jian, signed various economic and technical cooperation agreements.

The debt pardoned is 239.26 million yuans (about 36 million US dollars, at current exchange rates), and it is interest on Chinese loans that should have been paid by the end of this year. The full amount of Mozambique's debt to China was not revealed.

Mondlane said that this debt cancellation was of great importance since it allowed Mozambique to re-programme its budget, and apply to other areas the resources that would otherwise have been used in debt servicing.

One of the new agreements signed is for a Chinese grant of 15 million dollars for a new airport to serve Xai-Xai, capital of the southern province of Gaza. Xai-Xai is the only one of Mozambique's provincial capitals that currently does not have an airport.

The new airport will be built in Chonguene district, 26 kilometres from Xai-Xai. It is planned to occupy an area of 4,000 hectares, and will have a 1,600 metre long runway.

Mondlane said that, because of Xai-Xai's proximity to Maputo, the new airport could play an important role as an alternative to Maputo International Airport in emergency situations.

An airport, she believed, will also put Gaza on the regional and international circuit in terms of developing tourism, and would help attract investment to other areas where Gaza has great potential, including mining and agro-industry.

The Chinese grant alone is not enough to build an airport from scratch, and the government is hoping to mobilise a further 35 million dollars to make the project a reality.

Su Jian stressed the traditional relations between China and Mozambique which date back to the struggle for Mozambique's independence from Portuguese colonial rule, and which he regarded as a solid basis for continuing cooperation.

"In the last two years, although the Mozambican economy is facing some temporary difficulties, we have always remained confident in the potential for Mozambique's development", said the ambassador. "In 2017 there has been visible progress in the pragmatic cooperation between the two countries".

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