Mozambique: National economy financed by savings from other countries – O País

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Mozambique: National economy financed by savings from other countries – O País

3:19 CAT | 07 Nov 2025

File photo: O País

The Governor of the Bank of Mozambique warns that the country continues to depend on savings from other countries to finance its economy. The warning was issued last Wednesday in Pemba, Cabo Delgado province.

According to Rogério Zandamela, Mozambique registered a 3.1% worsening of the current account deficit in transactions with foreign countries in the first half of this year, compared to the same period in 2024.

Zandamela made these remarks on Wednesday during the Advisory Council of the Bank of Mozambique, an event that discusses until today the challenges of the national financial system and the economy in general.

To better understand the governor’s statements, O País Económico spoke with Mozambican economists Egas Daniel and Júlio Saramala.

Egas Daniel begins by saying that the warning shows the country remains dependent on the external sector in the three most important dimensions of financing the economy.

One dimension is public financing, since, as he points out, expenditures do not fully match revenues, which makes the country reliant on external sources, such as debt, to cover its budget deficit. “That is why I am talking about external public debt, which we know is currently at high levels,” he said, listing production as the second dimension of financing the economy.

Egas also reminds that the country produces little to meet its own needs and that the money earned from product exports does not cover imports. “Therefore, we are still dependent on external savings to finance and cover the trade balance deficit,” he pointed out

To make up for this difference, that is, to cover the trade balance deficit, Egas Daniel says that often the country resorts to external financing, thus becoming increasingly dependent.

Also commenting on Rogério Zandamela’s statements, economist Júlio Saramala highlighted that the observations reveal a structural problem in Mozambique’s economy.

“The country still cannot generate internally the resources needed to sustain its own growth,” Saramala said.

Júlio Saramala further understands that this dependence limits the autonomy of economic, fiscal and exchange rate policies, and exposes the country to external shocks and pressures on its reserves.

The economist argues that the worsening of the current account deficit described by the central bank governor confirms that the country spends more on imports than it earns from its sales to the world and external income, a clear sign of fragility in its balance of payments.

To reverse this scenario, Saramala says that more than speeches about economic diversification, it is necessary to mobilise domestic savings intelligently and channel them into productive investment.

“The country needs to energise the Local Development Fund (FDEL), the Mutual Guarantee Fund, and strategically the Sovereign Wealth Fund, so that they cease to be merely institutional structures and become real engines of economic financing,” suggests Júlio Saramala.

At the same time, Saramala says that exchange rate policy should be more predictable and focused on competitiveness, reducing volatility and ensuring access to foreign currency compatible with the needs of the productive sector.

“High public debt needs to be renegotiated to free up fiscal space and give breathing room to the private sector and families. An economy cannot grow if the State absorbs all liquidity in the system. The Government must work with the financial system to improve access to bank credit, especially for small and medium-sized enterprises, reducing financing costs and expanding financial intermediation,” he suggests.

According to Saramala, if the State combines responsible debt management, exchange rate stability and the promotion of savings and productive credit, it would help the country reduce its dependence on external capital and build stronger growth supported by internal resources.

Zandamela foresees economic recovery in 2026

The Bank of Mozambique is optimistic about the national economy’s recovery next year. In its outlook for the coming years, the regulator of the national financial system speaks of gradual recovery.

“We foresee a gradual recovery of economic activity, supported by the implementation of structural projects in strategic areas and the improvement of internal production conditions,” it forecasts.

Regarding the cost of living, the Bank of Mozambique projects that the general price level increase will remain below 10% in the coming years. However, it warns that significant challenges persist.

“Domestically, the continuous worsening of fiscal risk, a challenging business environment, climate shocks and the need for deep structural reforms stand out,” described the central bank governor.

Globally, the central bank governor underlines that challenges include the economic slowdown, the persistence of broad-based price increases and high levels of uncertainty.

By Clemêncio Fijamo

Source: O País Económico