Mozambique Gets $116 Million Budget Support as EU Resumes Aid

The European Union will give Mozambique 100 million euros ($116 million) in budget support, resuming aid to the southeast African nation after a scandal over undisclosed debts prompted a four-year freeze.

The money will be made available in two equal tranches, this year and in 2021, Mozambique’s Foreign Affairs Minister Veronica Macamo said in an emailed statement.

The EU halted direct budget support to Mozambique in 2016, after the International Monetary Fund and other donors also froze direct assistance when the government admitted it guaranteed more than $2 billion in debts, more than half of which had been undisclosed. Since then, three former Credit Suisse Group AG workers pleaded guilty to U.S. charges related to the loans.

Before donors halted budget financing, Mozambique relied on them for as much as a third of total budget funding.

The EU last month agreed to provide training and support to combat an Islamist insurgency in the northern Cabo Delgado province, where more than 2,000 people have died and at least 400,000 have fled their homes.

©2020 Bloomberg L.P.

BQ Install

Bloomberg Quint

Add BloombergQuint App to Home screen.