Iraq’s Debt Relief to Mozambique: Key Financial Moves
In a significant financial maneuver, Iraq has canceled $256 million of its longstanding oil debt owed by Mozambique, as announced by the nation’s Ministry of Finance. This decision comes amidst ongoing economic challenges faced by both nations.
Outstanding Debt Overview
Mozambique’s total outstanding debt to Iraq amounts to $320.2 million. The remaining balance of $64 million will be settled over a 15-year period, commencing in 2029. This debt originated from a bilateral agreement for oil supply in the years 1979 and 1980.
Negotiations and Economic Context
The debt relief was formalized following recent negotiations held in Abu Dhabi. Iraq, a country rich in natural gas resources, continues to grapple with an escalated debt load.
On February 7, Fitch Ratings downgraded Iraq’s foreign currency credit rating from “CCC+” to “CCC.” The downgrade reflects the adverse impact of persistent political and social unrest on government revenues, coinciding with heightened financing needs and uncertainties regarding external financing.
Conclusion
These developments highlight the complexities of international debt relations and the challenging economic landscape in both Iraq and Mozambique. The waiver not only alleviates some of Mozambique’s financial obligations but also underscores the ongoing efforts of Iraq to navigate its own economic hurdles.
