".. It has finally come to pass. An African country has been sold, lock stock and barrel by its leaders to European corporations. Mozambican government officials negotiated a secret loan agreement with Credit Suisse, BNP Paribas and VTB Capital for $2 billion. The loan was executed in the form of government guaranteed bonds bought by the lending banks. The country’s GDP at the time was $16 billion. Ostensibly the loan was for a tuna-fishing project but has now turned out, on the admission of the officials concerned, to be a loan mostly for military equipment.

The guarantee gives British courts “exclusive jurisdiction to resolve any disputes arising out of [ …] this warranty” and Mozambique renounces “any immunity which it or its property or income may enjoy in any jurisdiction.”

Military equipment not being an income generating asset, Mozambique had no means of making the first interest payment of $60 million in January 2017. It defaulted on the loan. As a result, the IMF has suspended the next tranche of $283 million credit to the country. Other development partners have followed suit and the currency has collapsed.

...The most grave consequence of this adventure is the mortgaging of the country’s assets in the event of default. Default was guaranteed. The procurement process was in the tradition of the developing country official interacting with the affluent Northern supplier: the cost of the craft was inflated by $100 million. Nevertheless, the fishing enterprise was projected to generate $200 million a year and yet the loan repayment was $260 million a year (Ndii, Daily Nation)..."

https://www.pambazuka.org/democracy-governance/mozambican-debt-crisis-how-sovereign-state-was-sold

The loan was bad from the beginning and the creditors foolishly disburse fund when in the know of the projections

what were they thinking?

sunkoye:
The loan was bad from the beginning and the creditors foolishly disburse fund when in the know of the projections

International banks are unscrupulous. They get rich by making such deals with African governments. It's not the first time those three are engaging in similarly predotorial government "deals."

Would it be a fair deal if FGN buys up the debt through NEXIM, for example, then draft out trade agreement, which includes Nigerian banks and insurance coys having foothold in the country, then flooding the academic space with Nigerians, and their govt projects with Nigerian firms, and open their markets up for Nigerian goods and Igbo traders. I'm sure we can recoup our investment in multiples within 10-15 years by direct and indirect value.

For the debt buy back, NLNG or NIMASA can conveniently liquidate it.

Sad when a country hangs itself.
They should reduce their seaport tax rates for countries such as Botswana, Zimbabwe, Zambia, Malawi and even the southern part of the DRCongo, to attract more traffic on import/export goods.

homerac7:
Would it be a fair deal if FGN buys up the debt through NEXIM, for example, then draft out trade agreement, which includes Nigerian banks and insurance coys having foothold in the country, then flooding the academic space with Nigerians, and their govt projects with Nigerian firms, and open their markets up for Nigerian goods and Igbo traders. I'm sure we can recoup our investment in multiples within 10-15 years by direct and indirect value.

For the debt buy back, NLNG or NIMASA can conveniently liquidate it.

China is probably thinking of that already