China provides more than half of external financing for Mozambique’s road network - Report
Macauhub reported that loans granted by China have become increasingly important in the maintenance and construction of roads in Mozambique and are expected to account for 53% of external financing in the road sector in 2018, the local press reported. Daly newspaper A Verdade wrote that the government has a deficit of more than USD 3 billion this year to fund construction, recovery and maintenance of just over 5,000 kilometres of roads considered a priority, and that China, the World Bank and Japan remain the only partners to support this strategic area of development.
Since April 2016, after the discovery of “hidden” debts endorsed by the previous government of Armando Guebuza, the main financiers of the sector suspended their support, particularly the countries of the European Union, but western banks also retreated, at a time when the use of commercial loans to build and improve the road network was gaining ground.
In addition to China, the exceptions to the shortage of financing for the road sector are the World Bank, the African Development Bank (AfDB), Japan, India and South Korea, as well as ongoing projects using European funds that were already underway, according to the newspaper.
The State Budget has earmarked just USD 90.2 million, about 2.0% of the total needed for the road sector, and the works in the road network must be financed by cooperation partners, initially with donations and loans under preferential conditions and, more recently, commercial finance.
The newspaper reported that the government needs just over US$5 billion to cover the 47 infrastructure projects planned for 2018.
The province of Tete would have the most routes, 920 kilometres, but the government was only able to raise US$23 million through the World Bank, out of the USD 773 million that it needed.
The second province with the largest stretch of roads to be built in 2018 is Gaza, where the government has only been able to raise the US$76.1 million needed for post-flood recovery of 191 kilometres of roads.
For Niassa province, which has the third largest stretch of roads planned for works in 2018, the government has secured funding for five of the seven scheduled projects.
Source : Macauhub