Mozambique: Debt of public companies covered by the state reduced to €696 million

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Mozambique: Debt of public companies covered by the state reduced to €696 million

1:56 CAT | 16 May 2025

File photo: O País

Mozambique has reduced the state’s public company debt liability to 50 billion meticais (€696 million) in 2024, equivalent to 4% of the gross domestic product (GDP), according to official data compiled by Lusa this Friday.

According to the annual public debt report from the Ministry of Finance, this is a reduction of 558.26 million meticais (€7.8 million) compared to the previous year, 2023, equivalent to 1% less in the space of a year.

Of that total, 39% represented loans to the sovereign-guaranteed State Business Sector (SEE), 30% corresponded to financing via Retrocession Agreements, 15% were loans with State Guarantee and the remaining 16% corresponded to credits with State Issued Comfort Letters, Sovereign Letters and Treasury Bonds.

“It should be noted that throughout the 2024 financial year, no new State Guarantee was issued in favour of SEE companies,” the document reads.

The report highlights that the granting of loan guarantees by the state “contributed to the reduction of the borrower’s credit risk” of public companies, allowing SEE companies to “obtain financing at a more favourable cost, with a view to the construction, rehabilitation and improvement of infrastructures, as well as the acquisition of equipment and resources relevant to the development of strategic activities”.

Mozambique has 11 public companies, seven exclusively state-owned companies and nine with minority shareholdings in liquidation.

Source: Lusa