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Consolidated Research Paperreviewed 31 Jan 2018



debt managementThe debt relief initiatives of the late 1990s and early 2000s significantly reduced the debt burden on many countries in the MEFMI region, including Mozambique. The 1996 Heavily Indebted Poor Countries initiative (HIPC), its 1999 enhancement, and the 2006 Multilateral Debt Relief Initiative (MDRI) reduced countries’ debt burden and improved their solvency. This, however, created additional space for new borrowing, including opportunities to access external non-concessional sources to finance development priorities. As a result, there has been a significant increase in public debt levels of most sub-Saharan African countries, including Mozambique, since 2012. Looking ahead, the financing requirements for the government of Mozambique are significant, as the country looks to developing the liquified natural gas sector and other priority investment projects.

Tanzania’s macroeconomic performance has remained strong in the last decade, registering real GDP growth rates consistently above 5 percent since 2007, making the country one of the fastest growing economies in Sub-Saharan Africa. Prospects remain favorable in the medium-term, with real growth projected to stabilize around 7 percent, supported by public sector investments in infrastructure, particularly those relating to transport and energy sectors. The discovery of natural gas, currently estimated to exceed 50 trillion cubic feet, and subsequent prospects for further gas related infrastructure investments, including gas processing plants as well as gas fired power plants are expected to significantly boost the country’s growth prospects.