Mozambique’s internal public debt has tripled since 2020, reaching 487.266 billion meticais (6.627 billion euros), now representing nearly 30% of the country’s gross domestic product (GDP), according to warnings from the central bank.
“The domestic public debt continues to deteriorate, negatively affecting the functioning of the financial market,” the Economic Conjuncture and Inflation Outlook report issued today by the Bank of Mozambique states.
The report, consulted by Lusa, notes that the total stock of internally issued public debt in Mozambique — including Treasury Bills (BT), Treasury Bonds (OT), and advances to the state by the central bank — amounted to 155.973 billion meticais (2.121 billion euros) in December 2020, representing 14.7% of GDP at the time.
Since then, according to data presented by the Bank of Mozambique, domestic public debt has continuously increased both in absolute terms and as a percentage of GDP, reaching the current 29.4%.
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The report also warns that “delays in fulfilling obligations associated with internal public debt instruments by the State, particularly OTs, have contributed to reduced appetite for new investments in public securities, as well as the maintenance of rigid interest rates in the interbank money market.”
For BT issuances, the State paid interest rates of 12.07%, 12.16%, and 12.25% for maturities of 91, 182, and 364 days, respectively, remaining practically unchanged in the first quarter of 2026.
In its most recent regular assessment in February 2025, the International Monetary Fund (IMF) again emphasized the “unsustainability” of Mozambique’s public debt. Credits: António Silva/LUSA
“This rigidity in rates fundamentally reflects the perception of high fiscal risk by commercial banks,” the report notes.
Additionally, the central bank highlights that between January and March 2026, the State conducted OT exchange auctions for three-year maturities, with the weighted average interest rate set at 13.50%, identical to the previous period.
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Mozambique has carried out successive internal debt exchange operations, which the credit rating agency Standard & Poor’s (S&P) classified as a selective default in its latest rating assessment of the country, published on March 27.
The domestic issuance rating remains at SD (selective default) due to payment delays and internal debt exchanges considered default operations by the agency.
At the end of 2025, Mozambique had accumulated almost 4.66 billion meticais (63.2 million euros) in overdue internal public debt payments due to treasury constraints, previously reported by Lusa.
“The accumulation of these arrears resulted mainly from revenue collection constraints in a context of economic slowdown and pressure on Treasury liquidity,” a Ministry of Finance report on Mozambique’s public debt evolution in 2025 states.
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The report also explains that within “liability management operations,” five Treasury Bond exchange auctions were conducted in 2025 for longer-term domestic issuances maturing that year. “The exchange auctions carried out in March, May, September, and December 2025 eased debt service pressure by 30.64 billion meticais (415.3 million euros), extending maturities and reducing risks.”
In its most recent regular assessment in February 2025, the International Monetary Fund (IMF) again emphasized the “unsustainability” of Mozambique’s public debt.
“Mozambique’s external debt is assessed as highly at risk of default, while total debt is considered critical. The debt is currently regarded as unsustainable, mainly due to the political infeasibility of a comprehensive adjustment that could potentially safeguard debt sustainability,” the IMF stated in that assessment.
