The Mozambican government has made an “extensive disclosure of information” to the International Monetary Fund in recent days, after earlier hiding from the IMF more than a billion U.S. dollars in public debt.

The disclosure was announced by the IMF in a statement issued Saturday, after intensive consultations between a Mozambican government technical team and IMF staff dealing with the country. The IMF said the disclosure “constitutes an important first step toward full restoration of trust and confidence” between the parties.

The undisclosed borrowing had the potential to inflict longlasting damage to the country's reputation for financial probity. When it was discovered, the IMF's Africa director, Antoinette Sayeh, was reported as saying that it "significantly changes our assessment of Mozambique's macroeconomic outlook." Reuters reported an anonymous IMF source as saying the country's debt situation was "very close to unsustainability".

Saturday's full IMF statement, issued by Michel Lazare, IMF mission chief for Mozambique, follows:

“Following a meeting held earlier this week between Carlos Agostinho do Rosario, Prime Minister of Mozambique and Ms. Christine Lagarde, IMF Managing Director, a technical team led by the Vice-Minister of Finance, Ms. Isaltina Lucas, worked intensively with the IMF Mozambique staff team.

“The authorities acknowledged that an amount in excess of $1 billion of external debt guaranteed by the government had not previously been disclosed to the Fund. Staff welcomed the authorities' extensive disclosure of information which constitutes an important first step toward full restoration of trust and confidence.

“Looking ahead, the Fund and Mozambique will continue to work together constructively to evaluate the macroeconomic implications of this disclosure of information and identify steps to consolidate financial stability, debt sustainability and enhance governance and oversight of public enterprises.”