Data from the third quarter’s budget execution shows that as of September 30, 41.6% of Mozambique’s total debt stock was domestic debt, including advances from the Bank of Mozambique and Treasury Bond and Bill issuances, while the remaining 58.4% was foreign debt.
This debt volume contrasts with the record high at the end of the second quarter, when Mozambique’s debt stock reached 1.072 trillion meticais (14.6 billion euros) on June 30, as previously reported by the Ministry of Finance, marking an increase of 0.1% from the preceding quarter.
This indicates a 0.9% decrease over three months, largely attributed to the amortization of Treasury Bonds, according to the government.
Mozambique’s Minister of Finance, Carla Loveira, stated on October 29 that public debt sustainability is “one of the greatest challenges” of the Mozambican economy, with ongoing “reforms” aimed at sustainable management.
“One of the greatest challenges our economy faces is the sustainability of public debt. As state finance managers, it is our duty to ensure that every borrowed metical is used efficiently, productively, and responsibly,” Carla Loveira asserted.
The minister revealed that a series of reforms is underway to ensure public debt sustainability, which includes drafting the Public Debt Management Strategy for the period 2025 to 2029, revising regulations setting the legal framework for the capital market, and “identifying specialized advisory on public debt matters.”
“These actions aim to strengthen the mechanisms for managing, controlling, and monitoring national public debt levels, ensuring public debt sustainability and creating more fiscal space for financing productive infrastructure projects with proven economic and social return,” she explained.
Carla Loveira affirmed that the Mozambican government maintains a “permanent dialogue” with “international partners to ensure that the national borrowing policy remains within the limits of fiscal sustainability and in line with international best practices.”
“The responsibility in contracting and utilizing public debt is not only technical but also ethical and intergenerational, as it defines the economic legacy we will leave for future generations,” she added.
On October 27, it was reported that the Mozambican government contracted the American firm Alvarez & Marsal to “assist in the drafting of the public debt restructuring plan” for Mozambique, as decided by the Council of Ministers.
The hiring of the international consultancy was conducted through direct agreement to draft a public debt restructuring plan aligned with the government’s objectives of ensuring short- and medium-term fiscal consolidation, as well as to “support the drafting of the Public Debt Strategy 2026-2029.”
Alvarez & Marsal, headquartered in New York with a global presence, is recognized as a specialist in recovery and performance improvement, with interventions such as in Lehman Brothers.
The governor of the Bank of Mozambique, Rogério Zandamela, warned on September 29 that the country’s public debt cannot continue to grow, expecting government measures for containment: “It cannot grow. I know, I am sure that the government is doing everything possible to contain this debt at reasonable levels, so as not to create problems for the economy. Because if it continues to grow, to the point of reaching worrying levels of unsustainability, it could cause issues.”
