Brazil seeks budget increase to pay debts of Venezuela, Mozambique

The Brazilian government is to submit to Congress a bill to increase the budget by $371 million, to be earmarked for a special export fund. The move aims to pay the debts of Venezuela and Mozambique to the National Economic and Social Development Bank (BNDES) and Credit Suisse.

As the debts of the two countries—which stemmed from loans that financed services and works carried out by Brazilian construction companies overseas—were not settled, the responsibility over them goes to the hands of the Brazilian treasury, since the insurance is paid for by the special export fund, from Brazil’s Finance Ministry. The deadline for the payment is May 8.

The topic was discussed at a meeting with President Michel Temer, his allies, and government secretariat head Carlos Marun. The government asked lawmakers to work towards the approval of a bill to be brought to vote in Congress next Wednesday (May 2).

Failing to pay would harm Brazil’s image, especially among creditors, Marun argued. There are funds for the payment, but they have not been included in the budget, hence the need for a bill, he added.

“Refraining from paying would bring utterly undesirable consequences. We need to make these payments in order to continue enjoying our status of good payers,” Marun said. The value of the two countries’ debt is reported to add up to $286 million.