The Mozambican Minister of Finance, Carla Loveira, stated today that the early and full repayment of a 630 million euro debt to the International Monetary Fund (IMF) reflects a prudent management strategy aimed at restoring international market confidence.
Speaking before Parliament, the minister emphasized that settling this obligation ahead of schedule reinforces Mozambique’s reputation as a credible partner and sends a clear message about the country’s commitment to debt transparency and sustainability.
Loveira argued that this move should improve the nation’s sovereign risk profile, potentially leading to better external financing conditions and increased investor interest in the medium term.
The Ministry of Finance confirmed that the payment, totaling approximately 698.5 million dollars, was finalized on March 23. This transaction liquidated various financing facilities contracted between 2019 and 2022, including the Rapid Credit Facility and the Extended Credit Facility.
Read more about this topic: Mozambique’s IMF debt payment seen as “sign of desperation”
To complete the repayment, the government utilized its Net International Reserves, which are foreign currency assets typically reserved for import payments. Loveira described the decision as a strategic economic policy tool intended to normalize the macroeconomic climate and reposition Mozambique on a trajectory of recovery.
Beyond the immediate financial impact, the minister explained that the move was necessary to address technical complexities in the state accounts. Previous agreements had resulted in a duplication of the debt record in both the General State Account and the central bank’s balance sheet.
By repaying the IMF, the government aimed to reduce the exposure of the Bank of Mozambique and alleviate pressure on total external debt, which is projected to represent 40.81% of the GDP by December 2025. This operation follows the suspension of a previous IMF program a year ago, with negotiations for a new partnership currently ongoing.
