The bilateral debt of the Portuguese-speaking African countries (PALOP) to Portugal has doubled in the last 25 years, reaching 2.5 billion euros in 2022, after peaking in 2013.
According to data from the Bank of Portugal, requested by the Lusa agency, the debt of these countries to Portugal was 1.2 billion euros in 2000, in a list where Angola, the largest African Lusophone economy, is always by far the largest debtor, with the exception of between 2014 and 2017, when Mozambique’s debt was higher.
According to data from the Bank of Portugal, the total bilateral debt of Portuguese-speaking African countries to Portugal at the end of 2022 was 2.565 billion euros, with Angola responsible for 1.054 billion euros, in a list in which São Tomé and Príncipe is the least indebted country, with only 84 million euros, having reached its peak in 2013, the year in which the PALOP countries owed 3.581 billion euros.
During a dinner on Tuesday with foreign correspondents in Portugal, the President of the Portuguese Republic said that Portugal must “pay the costs” of the crimes committed during the colonial era.
“Are there actions that have not been punished and those responsible have not been arrested? Are there assets that have been looted and not returned? Let’s see how we can repair this,” said Marcelo Rebelo de Sousa.
At the event, Rebelo de Sousa said that Portugal “takes full responsibility” for the mistakes of the past and recalled that these crimes, including the colonial massacres, had costs.
A few days later, he added that Portugal should lead the process of taking responsibility for and repairing the consequences of the period of colonialism and suggested, as an example, debt forgiveness, cooperation and funding.
Over the years, a number of initiatives have been tried to reduce this bilateral debt, the most recent being the idea of exchanging part of the amount owed for climate investments, in a model in which the debtor country channels the money owed into projects that benefit the environment or combat or strengthen the country’s resilience to climate change.
Portugal has agreed with Cape Verde and São Tomé and Príncipe on bilateral debt relief in exchange for climate investments of the same value, with the agreement signed with Cape Verde providing for 12 million euros and São Tomé and Príncipe for 3.5 million euros.
In 2022, Cape Verde’s total debt to Portugal was 630 million euros and São Tomé and Príncipe’s was 84 million euros, according to data from the Bank of Portugal.
The idea is to set up an international fund, in the case of Cape Verde, and a national one, in the case of São Tomé and Príncipe, into which Portugal will channel the amount paid by the two countries, a mandatory procedure so that there is no debt forgiveness or restructuring, from a financial point of view, which could lead to a downgrade in Cape Verde’s rating, since São Tomé and Príncipe has no rating assigned.
Luís Montenegro’s new government considers the idea to be positive and maintains its intention to extend the model to other Lusophone African countries, the Secretary of State for Foreign Affairs and Cooperation, Nuno Sampaio, told Lusa on his first visit to the United Nations (UN) headquarters in New York, on the sidelines of last week’s UN Economic and Social Council (ECOSOC) Forum on development financing.
“Portugal is currently running a very interesting debt swap experiment with Cape Verde, where the repayment of Cape Verde’s debt will be converted, for the time being, into a contribution of 12 million euros to an environmental fund. This is a concrete way of doing things, but it’s also sustainable and innovative, and it’s with these kinds of solutions that we have to approach the issue of financing,” said the Secretary of State.
DÍVIDA BILATERAL…….2000…..2010…..2021…..2022
Angola……………..815…..1.441…..928……1054
Mozambique………….245…….523…..761…….674
Guinea-Bissau…………65…….126…..126…….123
Cape Verde…………..58…….268…..685…….630
São Tome e Príncipe…..30……..49……89……..84
TOTAL…………….1.213…..2.407…2.589…..2.565
Source: Bank of Portugal
