Angola to 'forgive' half of Mozambique's debt

President of Mozambique Armando Guebuza (R) greets supporters on his arrival in Chimoio on October 30, 2013 (AFP Photo/Ferhat Momade) (AFP/File)

Maputo (AFP) - Oil-rich Angola is ready to write off half of Mozambique's public debt which dates back decades, an official said Friday.

The decision, which covers half of the total of about $60 million (45 million) owed, follows a meeting between the two countries this week.

The remaining $30 million will be "transformed into capital for Angolan investment in Mozambique," the Mozambican official said, asking not to be named because he is not authorised to speak to the press.

The debt dates back to the 1970s and 1980s and was largely incurred by Mozambique importing oil from Angola.

Angola had in 2007 agreed to write off $30 million of Mozambique's debt, but the deal was never implemented.

"The main idea is to implement economic relations so that they reach the same level as political relations which are excellent," the official added.

The two countries have been close since gaining independence from Portugal in the mid-1970s.

Both were ravaged by long civil wars after independence and both are in the process of reconstructing their infrastructure and economies.

However, while Angola is one of Africa's main oil exporters, Mozambique has yet to begin exploiting vast energy reserves of its own.

The areas mooted for Angolan investment in Mozambique include energy, transport and communications.