Mozambique’s public debt falls to the equivalent of €14.5 billion in September

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Mozambique’s public debt falls to the equivalent of €14.5 billion in September

12:59 CAT | 11 Nov 2025

File photo: Ministério das Finanças - MZ

Mozambican debt fell during the third quarter of this year to 1.068 trillion meticais (€14.5 billion), according to a report from the Ministry of Finance accessed today by Lusa.

According to data from the budget execution for the third quarter, 41.6% of the total debt ‘stock’ as of 30 September related to domestic debt, including advances from the Bank of Mozambique and issuances of Treasury Bonds and Treasury Bills, with the remaining 58.4% being external debt.

This volume of debt compares with the record level, renewed at the end of the second quarter, when Mozambique’s debt stock reached 1.072 trillion meticais (€14.6 billion) on 30 June, according to previous Ministry of Finance data, in what had then been an increase of 0.1% over the previous quarter.

This [third quarter data] represents a decrease of 0.9% over three months, according to the Government, mainly justified by the amortisation of Treasury Bonds.

Mozambique’s Minister of Finance, Carla Loveira, stated on 29 October that public debt sustainability is “one of the greatest challenges” for the Mozambican economy, with “reforms” underway for its sustainable management.

“One of the greatest challenges our economy faces is the sustainability of public debt. It is our duty, as managers of the State’s finances, to ensure that every metical borrowed is applied efficiently, productively and responsibly,” Carla Loveira said.

The minister added that a set of reforms aimed at ensuring public debt sustainability are underway, including the preparation of the Public Debt Management Strategy covering the period 2025 to 2029, the revision of regulations establishing the legal regime of the capital market, and “the identification of specialised advisory services in public debt matters”.

“These actions aim to strengthen mechanisms for managing, controlling and monitoring public debt levels, ensuring public debt sustainability and creating more fiscal space to finance productive projects in infrastructure with proven economic and social returns,” she said, at the time.

Carla Loveira further assured that the Mozambican Government maintains “permanent dialogue” with “international partners to ensure that the national debt policy remains within fiscal sustainability limits and in accordance with best international practices”.

“Responsibility in contracting and using public debt is not only technical, it is also ethical and intergenerational, as it defines the economic legacy we will leave to future generations,” she added.

Lusa reported on 27 October that the Mozambican Government contracted the American firm Alvarez & Marsal to “support the preparation of Mozambique’s public debt restructuring plan”, according to a decision by the Council of Ministers.

READ: Mozambique cabinet clears Alvarez & Marsal for “public debt restructuring plan” – bulletin

The contracting of the international consultancy firm was made by direct adjustment and aims to prepare a public debt restructuring plan for the country, “aligned with the Government’s objectives to ensure fiscal consolidation in the short and medium term”, but also to “provide support in the preparation of the Public Debt Strategy 2026-2029”.

Alvarez & Marsal, headquartered in New York with a global presence, is described as a specialist in recovery and performance improvement, with interventions such as at Lehman Brothers.

The Governor of the Bank of Mozambique, Rogério Zandamela, warned on 29 September that the country’s public debt cannot continue to grow, expecting the Government to take measures for its containment: “It cannot grow. I know, I am certain the Government is doing everything possible to keep this debt at reasonable levels, so it does not create problems for the economy. Because if it continues to grow to worrying levels of unsustainability, it could cause problems.”

Source: Lusa