Iraq Forgives 80% of Mozambique’s Debt, Easing Financial Burden

Iraq has written off $256.13 million, or 80%, of Mozambique’s debt totaling $320.16 million. The remaining 20% will be restructured for payment over a 15-year term, beginning with a four-year grace period. These negotiations occurred in Abu Dhabi, involving senior officials from both nations.

Iraq has agreed to forgive 80% of Mozambique’s bilateral debt, significantly alleviating the financial burden on the southeast African nation. This decision involves the cancellation of $256.13 million of a total $320.16 million debt, as confirmed by Mozambique’s finance ministry. The remaining 20% of the debt will be restructured over 15 years, featuring a four-year grace period from 2029 to 2043.

The initial debt, which stemmed from oil supply agreements in 1979-1980, began at $60.26 million but increased considerably over the years. The negotiations concerning this debt forgiveness took place in Abu Dhabi, from February 2 to February 6, 2025. Senior officials from Iraq, including representatives from the Ministry of Finance, Foreign Ministry, and Central Bank, engaged in discussions with officials from Mozambique’s Finance Ministry and its Economic and Commercial Advisor based in Portugal and Spain.

In summary, Iraq’s decision to forgive 80% of Mozambique’s debt represents a substantial gesture of financial support. By reducing Mozambique’s debt from $320.16 million to $64.03 million, Iraq not only aids in the nation’s economic stability but also fosters diplomatic relations. The structured payment plan over the next 15 years offers a manageable pathway for Mozambique.

Original Source: shiawaves.com