The Mozambique government has outlined a proposal for the Economic and Social Plan and State Budget (PESOE) for 2026, currently under review in the Assembly of the Republic. This proposal details an allocation of 67.6 billion meticais (€913 million) for interest payments and 55.1 billion meticais (€744 million) for capital amortization.
This reflects an increase compared to the 120.6 billion meticais (€1.63 billion) projected for debt servicing in 2025, equivalent to 7.8% of the estimated GDP, and the 105.6 billion meticais (€1.43 billion) estimated for 2024, approximately 7.2% of GDP.
The proposal highlights that debt charges, including interest payments, amount to 4.1% of GDP: “This represents a stabilization as a proportion of GDP compared to what was projected in the 2025 PESOE Law, justified by the government’s continued effort to fully honor its commitments, thereby reinforcing credibility and trust in public finances.”
Public debt servicing costs in Mozambique fell 7.5% in the first half compared to the same period in 2024, totaling 27.2 billion meticais (€367 million), according to government data reported in September.
A Finance Ministry execution report indicates this is 42.6% of the annual budget set for 2025.
The Mozambican government has engaged the services of the American firm Alvarez & Marsal to “support the development of the public debt restructuring plan” for Mozambique.
As per resolution 34/2025, dated October 22, from the Council of Ministers, the consultancy was hired through direct contracting to develop a public debt restructuring plan “aligned with the government’s objectives to ensure fiscal consolidation in the short and medium term,” and to “assist in drafting the Public Debt Strategy 2026-2029.”
Alvarez & Marsal, headquartered in New York with a global presence, is identified as a firm specializing in recovery and performance improvement, with known interventions in cases like Lehman Brothers and Warnaco, among others.
The Governor of the Bank of Mozambique, Rogério Zandamela, cautioned on September 29 that the country’s public debt cannot continue to grow and expects measures from the government to curb it.
“It cannot grow. I know, I am sure, that the government is doing everything possible to contain this debt at reasonable levels, so it does not create problems for the economy. Because if it continues to grow, reaching concerning levels of unsustainability, it could cause problems,” warned Zandamela.
The warning came as Zandamela addressed journalists after the Monetary Policy Committee (CPMO) meeting, which occurs every two months, emphasizing the importance of efforts to contain the impact of growing debt, particularly domestic.
“Yes, it impacts economic growth, it cannot grow indefinitely. There comes a time when it needs to be mitigated with appropriate measures, revenue measures, expense measures, all the necessary adjustments to reduce, contain, or mitigate the growth of this debt,” added Rogério Zandamela.
The CPMO meeting, like its predecessors, concluded that “pressure on internal public debt continues to worsen,” acknowledging an “impact on the normal functioning of the state securities market.”
Previous data highlighted that Mozambique’s public debt reached a record 1.07 trillion meticais (€14.4 billion) as of June 30.
