Mozambique: Domestic public debt rose by €300 million in 2024 – cenbank

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Mozambique: Domestic public debt rose by €300 million in 2024 – cenbank

12:56 CAT | 28 Jan 2025

File photo: Lusa

Mozambique’s central bank warns that the pressure on domestic public debt has worsened in 2024, the total growing by the equivalent of around €300 million in the space of a year.

“Domestic public debt, excluding loan and lease contracts and overdue liabilities, stands at 435.6 billion meticais (€6.749 billion), which represents an increase of 20.1 billion (€299.2 million),” reads the statement of the Bank of Mozambique Monetary Policy Committee (CPMO) meeting held on Monday.

The Ministry of Finance of Mozambique pledged on Friday that it intended to “reduce the debt service” of the public, while assuring that the government was “committed” to fulfilling its commitments.

“The Ministry of Finance states that the government is committed to honouring its obligations and will continue to manage public debt in accordance with its Medium-Term Debt Strategy 2022-2025,” reads a ministry statement issued after the new Minister of Finance, Carla Alexandra Loveira, spoke of the need to restructure public debt.

Regarding domestic debt, it states that “reforms are underway”, including the “introduction of debt swap auctions” and the “dynamisation of the secondary market through the introduction of new debt issuance instruments that allow greater participation by institutional investors, families and individuals”.

The new Minister of Finance admitted on 18 January the need to restructure public debt, warning that the country had lost revenues of almost €640 million following the post-election demonstrations.

“In December alone, there were losses of around 14 billion meticais (€213 million) in revenue resulting from the protests. The entire year is counting on a loss of revenue of around 42 billion meticais [€639 million]. This loss of [financial] space ended up compromising last year’s financial year,” Minister Carla Louveira said.

Loveira served as deputy minister of economy and finance in the previous mystery and was chosen by the new president, Daniel Chapo, to serve as minister of finance.

The cost of servicing Mozambique’s external debt (amortization and interest) grew 13% in the third quarter of 2024, to US$283.92 million (€274 million).

The inauguration of the new government took place after almost three months of violent demonstrations contesting the process surrounding the general elections of October 9, called by presidential candidate Venâncio Mondlane – who does not recognize the results, alleging “electoral fraud”. Unrest has resulted in 315 deaths and 750 people being shot, and degenerated into clashes with the police with violence, looting, and destruction of public and private property.

Source: Lusa