This objective is outlined in the Medium-Term Public Debt Management Strategy 2025-2029, which has selected one of four initially analyzed models that “optimizes the cost and risk of public indebtedness.”
According to the strategy, during the 2025-2029 period, external debt will focus on highly concessional sources. It aims for a gradual increase of external financing from 5% in 2024 to 50% in 2029, corresponding to a decrease in internal financing from 95% in 2024 to a balanced 50% in 2029.
The composition of debt is set to rely on highly concessional loans for external financing, while internal financing will utilize Treasury bonds with longer maturities, reducing reliance on Treasury bills with shorter maturities from 70% in 2024 to 10% in 2029.
The strategy aims to “gradually” replace short-term Treasury bill issuances over the next four years with long-term financial instruments, namely Treasury bonds with maturities exceeding five years.
This approach is intended to mitigate refinancing risks associated with internal debt, manage pressures on state treasury services, and promote the development of the capital market over the medium to long term by facilitating a lower-cost adjustment in financing sources.
The strategy updates a previous plan and notes that internal financing will continue to be sought in marketable forms, with an expected increase in the issuance of longer-term securities. In terms of external mobilization, the government will continue to maximize concessional financing from multilateral financial institutions and bilateral creditors to cover expenses.
Approved by the Council of Ministers and effective December 31, 2025, this strategy aims to meet its cost and risk objectives concerning public debt management. The overarching goal of the 2025-2029 strategy is to fund the budget deficit at the lowest possible cost while maintaining a prudent risk level, as well as to contribute to the development of the capital market.
This update serves as a guiding tool for government decisions regarding public debt options that best optimize associated costs and risks. Mozambique’s public debt increased by 1.5% in the third quarter of 2025, reaching a new high of 1.128 trillion meticais (€15.055 million), as reported this month. The ratio of public debt—both domestic and external—and guaranteed debt was 73% of the Gross Domestic Product (GDP) by the end of September.
Finance Minister Carla Loveira remarked on October 29 that public debt sustainability is “one of the greatest challenges” facing the Mozambican economy, highlighting ongoing “reforms” aimed at sustainable debt management.
