Mozambique: Public debt increases by 16.6 billion meticais in Q1

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Mozambique: Public debt increases by 16.6 billion meticais in Q1

7:29 CAT | 12 Jul 2023

FILE - For illustration purposes only. [File photo: Lusa]

Mozambique’s total debt stock stood at 940.6 billion meticais in the first quarter of 2023, a 2% increase on the 2022 fourth quarter total of 16.6 billion meticais.

The Mozambican government in the meantime went further into debt to pay other debts and took out loans to pay public expenditure, particularly operating expenses (salaries and remuneration).

The data are contained in the Public Debt Report for the first quarter of 2022, recently published by the Ministry of Economy and Finance (MEF).

According to the document’s disaggregated data for the period in question, the stock of external public debt stood at US$9.9 billion, of which US$ 5 billion (50%) referred to multilateral creditors, US$4 billion (41%) to bilaterals and the remaining US$900.00 million to sovereign bonds (EMATUM 2032).

Compared to the fourth quarter of 2022, the MEF indicates a slight reduction of US$133.70 million (1.21%), justified by the weak disbursement by some bilateral creditors.

As in the previous period, the Debt Report mentions that the multilateral creditors with the greatest weight in the debt stock remained unchanged, with emphasis on the World Bank (30%), African Development Fund (9%) and MOZAM (9%, related with the so-called ‘hidden debts’), occupying the first three positions. The remaining creditors had percentage values below 6%.

With regard to bilateral creditors, the source indicates that China, Portugal and Japan also maintained their positions in terms of weight, with the debt stock with these countries continuing to represent 16%, 5% and 4%, respectively.

“During the period under review, the total value of external public debt service stood at US$213.23 million, of which US$146.09 million corresponded to the amortization of capital and US$66.59 million to the payment of interest, which represents a reduction of 64% (US$377.28 million) in relation to the fourth quarter of 2022, and a nominal increase of US$71.27 million, corresponding to a variation of 50.2% in relation to the same period,” the quarterly report on public debt reads.

The internal public debt stock in the first quarter of 2023 stood at 306.5 billion meticais (just over US%4 billion), of which 151 million meticais (49%) related to treasury bonds (OTs – financing to the state budget and restructuring and consolidation), 74.4 billion meticais (24%) to treasury bills (BTs) and 82.9 billion meticais (27%) to other components (central bank, restructuring and consolidation and bank financing).

Compared to the fourth quarter of 2022, our source reports that the stock of domestic debt grew by 9%, corresponding to 25.08 billion meticais, driven by the reimbursement or amortization of capital and interest from the central bank and by leasing, as well as the settlement of the amount of 37.5 billion meticais referring to the capital of the external debt paid in error via advance funds.

“During the period under review, the total amount of the internal public debt service stood at 14,053.63 million meticais, of which 3,674.83 million correspond to the amortization of capital and 10,378.80 million meticais to the payment of interest, which represents a reduction of 68% (29,848.87 million meticais) compared to the fourth quarter of 2022,” the report concludes.

Source: Carta de Moçambique