Govt clarifies that Mozambique’s public debt is not to be restructured, but paid

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Govt clarifies that Mozambique’s public debt is not to be restructured, but paid

4:22 CAT | 23 Jan 2025

FILE - For illustration purposes only. Minister of Finance Carla Louveira, seen here at the swearing in ceremony of the members of the Sofala Provincial Assembly, held on January 20, 2025, in Beira city, central Mozambique[. File photo: Conselho Executivo Provincial de Sofala]

Misinterpretation of Carla Louveira’s first words after taking over the new Ministry of Finance has required Daniel Chapo’s government to clarify that Mozambique’s public debt, estimated at US$16.7 billion, will continue to be paid in the manner agreed with national and foreign creditors, in this and the coming years.

“The work we have to do is to reflect on the restructuring of our debt, so that, within that budgetary space, we can ensure the payment of the debt, but also meet the current needs of the state budget,” Carla Louveira told the media on Saturday (18-01), after being sworn in as Minister of Finance.

These words caused concern among creditors, both national and foreign, forcing the new executive to clarify, in a press release, that “it is committed to honouring its obligations and will continue to manage the public debt in accordance with its Medium-Term Debt Strategy 2022-2025”.

The newspaper @Verdade has learned that this strategy involves continuing to pay the public debt in accordance with the terms agreed with creditors for this year and the coming years, while “reducing debt service in the medium term and improving the country’s credit profile”.

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In September 2024, Mozambique’s public debt stock was US$16.7 billion, representing around 65% of gross domestic product. Of this stock, US$10.5 billion is external debt, the main creditors being EMATUM [bonds], the World Bank, China and the IMF. As for the US$6.1 billion of internal debt, the main creditors are BCI, Millenium bim and Standard Bank.

In 2024, public debt service was, at US$1.8 billion, the highest ever in Mozambique.

Source: A Verdade