Mozambique said Brazil's parliament has approved the restructuring of roughly $143 million in debt, giving the Southern African country some breathing room as it seeks to stabilise its public finances.

Mozambique's finance ministry said in a statement dated April 8 that the restructuring "consists of renegotiating payment deadlines and conditions, creating conditions that allow Mozambique to meet its obligations over extended periods and with installments adjusted to its financial capacity."

The statement said Brazil's Federal Senate had approved the restructuring on April 7. Mozambique had been in arrears on the debt, an International Monetary Fund report said in January.

Under the restructuring agreement, Mozambique will pay an initial portion within 60 days of signing, followed by the remaining balance in 10 semi-annual installments at a fixed annual interest rate of 3.625%.

Fallen behind on domestic debt obligations

Mozambique's debt problems date back to a 2016 hidden-debt scandal, which dampened investor confidence and curbed access to funding.

Delays to major liquefied natural gas projects that had been expected to boost exports and revenue have made matters worse.

Mozambique said last week it had hired consulting firm Alvarez & Marsal to advise it on managing its public debt.

The government has fallen behind on some domestic obligations, and the IMF has said its debt is on an unsustainable path.