Mozambique: Government can still place 168.5 ME in Treasury Bonds this year

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Mozambique: Government can still place 168.5 ME in Treasury Bonds this year

9:24 CAT | 16 Aug 2023

File photo: Lusa

Mozambique has since January placed 24,920 million meticais (€358 million) in Treasury Bonds on the stock exchange, and is legally entitled to issue another 11,728 million meticais (€168.5 million) before the end of the year.

According to Ministry of Economy and Finance diploma 14/2023 of January 18, the issuance of Treasury Bonds (Obrigações do Tesouro) – public debt issued with longer maturities – for this year is limited to 36,648 million meticais (€526.4 million), preferably in two issuances per month, up until December 5th.

Data from the Mozambican Stock Exchange (BVM) compiled today by Lusa indicates that 12 issuances have already been made in 2023, with maturities of up to 10 years and interest rates ranging between 17 and 19%. The amounts raised in each operation ranged from 475 million meticais (€6.8 million) on August 8, the last of these issuances, to 5,946 million meticais (€85.3 million) raised in the operation carried out on March 7th.

In indicative terms, the next issuance of Treasury Bonds by the BVM should take place on the 22nd of August, with the state still having the capacity to fetch a further 11,728 million meticais (€168.5 million) from the market by the end of the year. So far, the government has reached 68% of its legal indebtedness limit for the year.

Data previously released by Lusa, based on budget execution reports for the first quarter, indicate that Mozambique’s current internal debt – between Treasury Bonds and shorter maturity Treasury Bills, on March 31 totalled almost 295,733 million meticais (€4,200 million).

The Mozambican government previously approved the so-called Public Debt Management Strategy 2023-2026, which guides borrowing options over the next few years and aims to “bring limits to debt sustainability indicators in terms of borrowing”.

It foresees, in terms of external debt, “privileging financing in the form of donations” and “in the form of highly concessional credits for profitable projects”, while in terms of internal debt, priority is given to “privileging the issuance of long-term Treasury Bonds”.

Source: Lusa