Iraq has agreed to forgive 80% of Mozambique’s debt, writing off $256.13 million. The remaining debt will undergo restructuring over 15 years with a four-year grace period. This debt dates back to oil supply agreements from 1979-1980 and has increased over time, leading to recent negotiations in Abu Dhabi.
Iraq has officially canceled 80% of Mozambique’s bilateral debt, amounting to $256.13 million out of a total of $320.16 million owed. This decision was announced by Mozambique’s finance ministry, highlighting a significant easing of the financial burden on the southeast African country. The remaining 20% of the debt will be restructured over a period of 15 years, which includes a four-year grace period running from 2029 to 2043.
The debt originated from agreements made for oil supplies back in 1979-1980, with the initial amount recorded at $60.26 million. However, the figure increased substantially over the years, necessitating negotiations for debt relief. The discussion regarding these terms took place in Abu Dhabi from February 2-6, 2025, involving key officials from both Iraq’s and Mozambique’s ministries of finance and other relevant departments.
In summary, Iraq’s substantial debt forgiveness will significantly alleviate Mozambique’s financial constraints, providing a structured plan for the remainder of the debt. The extended grace period and restructuring are essential for Mozambique’s economic recovery, especially considering the historical context of the debt’s accumulation.
Original Source: shiawaves.com
