Iraq has cancelled 80% of Mozambique’s bilateral debt, amounting to $256.13 million of the total $320.16 million. The remaining debt will be restructured over 15 years with a four-year grace period starting in 2029. This debt stems from oil supply agreements made in 1979-1980 and increased over time due to accrued interest.
The government of Iraq has confirmed its decision to forgive 80% of Mozambique’s bilateral debt, amounting to a substantial write-off of $256.13 million from the total debt of $320.16 million. According to Mozambique’s finance ministry, the remaining 20% will be restructured over a period of 15 years, with an initial grace period of four years extending from 2029 to 2043.
The debt in question originated from oil supply agreements established between Iraq and Mozambique during 1979-1980. Initially valued at $60.26 million, this debt has increased over the years, prompting recent negotiations. These discussions took place in Abu Dhabi from February 2 to February 6, 2025, and were attended by high-ranking officials from Iraq’s Ministry of Finance, Foreign Ministry, and Central Bank, alongside Mozambique’s Finance Ministry and economic advisors from Portugal and Spain.
In conclusion, Iraq’s decision to forgive a significant portion of Mozambique’s debt underscores the strengthening diplomatic and economic relations between the two nations. The restructuring plan aims to alleviate Mozambique’s financial burden while providing a framework for future economic stability. This agreement exemplifies international cooperation in addressing financial challenges faced by developing countries.
Original Source: shiawaves.com
