Mozambican politician Venâncio Mondlane has criticized the government’s recent decision to fully repay its debt to the International Monetary Fund (IMF), saying it is not a reason to “celebrate” and warning that the move should instead raise concerns about hidden fiscal risks.
“This is not something so positive that we should be celebrating. On the contrary, we should be worried, because this may involve a hidden debt whose real impact we will only understand later,” Mondlane said at a press conference in Maputo.
Last week, Mozambique’s Ministry of Finance confirmed it had made an “early and full repayment” of about €630 million to the IMF, clearing loans contracted under the Poverty Reduction and Growth Trust (PRGT). The government said it used international reserves to complete the payment.
Mondlane questioned whether parliament had been properly informed or involved in the decision, arguing that such a large transaction could significantly affect fiscal projections and macroeconomic indicators set out in the state budget.
Read more about this topic: Mozambique’s IMF debt payment seen as “sign of desperation”
He also called for an extraordinary parliamentary session to debate the issue, saying it was unclear whether lawmakers had assessed the implications of the repayment.
The former presidential candidate argued that repaying the IMF was not urgent, noting that the fund’s loans typically carry relatively low interest rates compared to other forms of debt. He suggested that Mozambique should instead prioritize reducing more costly domestic obligations.
“We always talk about external debt, but the worst debt the government has is domestic debt — what it owes to companies, VAT reimbursements, suppliers, and banks, which are already stretched,” he said.
Mondlane added that easing pressure on local banks could help them finance youth entrepreneurship and economic development projects.
Read more about this topic: Mozambique: IMF debt cleared using international reserves
Mozambique’s President Daniel Chapo, however, described the repayment decision as “bold” and a sign of fiscal responsibility, saying it reflects the country’s commitment to strengthening its financial credibility by using its reserves.
The government has also expressed interest in negotiating a new IMF support programme, discussions that have been ongoing since 2025.
Business leaders in Mozambique have welcomed the repayment as a step that strengthens international confidence, while warning that macroeconomic stability must be supported by consistent domestic reforms to ensure sustainable and inclusive growth.
