IMF suspends aid to Mozambique over hidden $1 bn debt

The International Monetary Fund has suspended aid to Mozambique after discovering the country had hidden debt of more than $1 billion.

"The undisclosed borrowing exceeds $1 billion and significantly changes our assessment of Mozambique's macroeconomic outlook," said Antoinette Sayeh, head of the IMF's African Department, in a statement to AFP on Tuesday.

As a result, the global crisis lender has cancelled a staff mission to the African country this week that was part of its $283 million standby credit facility and a policy support program from the IMF.

That cancellation of the mission effectively puts on hold any disbursements from the facility. A first instalment of $117.9 million was made in December to help the country cope with lower commodity prices that have depressed revenues.

Aid has been suspended "pending a full disclosure and assessment of the facts," on the unreported borrowing, Sayeh said.

In December 2014, the IMF froze financial aid to another African country, Mali, for six months after discovering "lapses" in public financial management and the purchase of a new $40 million presidential airplane.