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Significance

This followed the announcement from Maputo in October that it was in debt distress after revelations earlier this year of over 2-billion-dollars in undisclosed loans. In an effort to appease the IMF and external creditors, the Mozambican government has instructed risk firm Kroll to audit three quasi-parastatal companies at the centre of the ongoing debt crisis.

Impacts

Pension funds and investors will suffer greater losses as more banks and state-owned enterprises close.

Discontent in the state bureaucracy could grow as salary payments are delayed.

The ceasefire between RENAMO and the Frelimo government may be in jeopardy as Maputo struggles to exert control.

Internal party pressure could increase on President Filipe Nyusi to prosecute former President Armando Guebuza.

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