Mozambique: Medium Term Debt Management strategy approved

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Mozambique: Medium Term Debt Management strategy approved

3:37 CAT | 05 Nov 2025

File photo: TVM

The Mozambican government has approved the Medium-Term Debt Management Strategy for 2025-2029, a document aimed at “defining a prudent framework for public debt management.”

According to a statement issued by the Council of Ministers (cabinet) on Tuesday, the strategy is also aimed at meeting the State’s financing needs, balancing costs and risks, in order to ensure the credibility of economic policy and debt sustainability in the medium and long term.

The strategy emerges at a time when public debt, particularly domestic debt, is continuing to grow every month, to make up for the shortfall in tax collection on the one hand, and the decline of foreign aid on the other.

The Bank of Mozambique, in its role as regulator of the national financial system, has warned that the pressure on domestic public debt has continued to worsen, and now represents over 40 per cent of the total debt stock, standing at about 454.3 billion meticais (70.8 billion dollars), representing an increase of 38.7 billion meticais, when compared to December 2024.

“The debt is growing under more onerous conditions, putting the state into a cycle of refinancing with ever higher costs”, warned the Bank.

Over the last month, the Chinese government decided to forgive Mozambique’s interest-free loans falling due until 2024. The government data point out that 14 per cent of Mozambique’s foreign debt in March of this year was held by China, the country’s largest bilateral creditor, with a stock of 1.3 billion US dollars.

The country’s public debt in general reached 1,100 billion meticais (16.7 billion dollars at the current exchange rate) over the last quarter of 2025, corresponding to a growth of 2.7 per cent compared to the previous quarter. This growth in the debt corresponds to 78.9 per cent of the country’s Gross Domestic Product (GDP).

Source: AIM