Iraq has agreed to forgive 80% of Mozambique’s bilateral debt, which amounts to $256.13 million of the total $320.16 million. The remaining 20% will be restructured over 15 years with a grace period. The debt, initially incurred for oil supply in 1979-1980, has significantly increased over time due to interest.
Iraq has announced its decision to forgive 80% of the bilateral debt owed by Mozambique, leading to the cancellation of $256.13 million from the overall debt of $320.16 million, as per the statement from Mozambique’s Ministry of Finance. The remaining 20% will undergo restructuring over a 15-year period, featuring a four-year grace phase extending from 2029 to 2043.
The debt originated from oil supply agreements established in 1979-1980, initially amounting to $60.26 million. However, this amount increased substantially over the years due to accrued interest.
Discussions concerning this debt forgiveness took place in Abu Dhabi from February 2 to February 6, 2025. Senior officials from Iraq’s Ministry of Finance, Foreign Ministry, Central Bank, along with representatives from Mozambique’s Finance Ministry and its Economic and Commercial Advisor based in Portugal and Spain, participated in the negotiations.
In conclusion, Iraq’s significant debt cancellation of 80% for Mozambique underscores a substantial diplomatic engagement aimed at economic relief for the southeastern African nation. The planned restructuring of the remaining debt over 15 years, along with a four-year grace period, emphasizes a willingness to foster long-term economic stability. This agreement highlights Iraq’s commitment to supporting Mozambique amidst its economic challenges stemming from historical financial obligations.
Original Source: shiawaves.com
