Like many poor countries, Mozambique is vulnerable to falling commodity prices and higher interest rates. All of its private external debt is now owed under English law, enabling vulture funds and others who have bought the debts cheaply to shun the restructuring process and instead sue Mozambique in UK courts. The Jubilee Debt Campaign called on the UK government to extend a 2010 law – currently only applicable to loans granted before 2004 – that protects countries from such actions. Pointing out that 90% of sub-Saharan African government bonds are owed under English law, the pressure group pointed to Ghana and Mozambique as early warning signs of a far greater developing world debt crisis on the horizon. Mozambique has pledged to honour what it described as illegal debt contracts to state-owned companies.

Source: The Guardian October 27, 2016 17:14 UTC