Despite the currency crisis, treasury fragility, and eroding confidence in institutions, Mozambique enters 2026 with no signs of reforms capable of reversing the course, warns the Center for Public Integrity (CIP).
The director of CIP, Edson Cortez, highlights economic risks, public management limitations, and obstacles to attracting investment at the opening of the new year.
In an interview with E&M, Cortez emphasized that, while no one has a “crystal ball,” the signs point to a difficult year, marked by instability and a lack of reforms.
Mismanagement of Public Accounts Far From Resolved
The recent controversy surrounding the State General Account (CGE) and doubts about the whereabouts of part of the future Sovereign Fund’s resources once again exposed deep weaknesses in public treasury management. According to Cortez, this confirms a historical pattern of lack of transparency and accountability.
He explains that the Administrative Court (TA) has, over the years, fulfilled its role as state auditor, issuing successive reports on the CGE revealing “serious problems” in the management of public funds. Since he began monitoring governance issues, Cortez has always seen the TA expose serious irregularities. However, after the reports are published, “the Public Prosecutor never acts on the matters” and does not investigate responsibilities — even when they are often well-known. This impunity, he says, ultimately weakens the TA. “From then on, there’s nothing it can do.” Cortez considers this a problem that will continue to mark the year ahead, as he sees no signs of change.
Treasury Problems Will Persist
Cortez also addressed the state’s financial fragility, predicting that the lack of liquidity will persist in 2026. He cited difficulties in paying overtime to education and healthcare professionals as a reflection of treasury management failures that will carry over into the current year. The situation is expected to worsen with the exit of international partners, who are prioritizing assistance to other conflicts (Russia-Ukraine and Israel-Palestine), reducing resources available for Mozambique. “If money goes to reconstructing Ukraine or Palestine, it means fewer resources for our country,” Cortez explained.
As a result, another scenario emerges for 2026: the possibility of a new issuance of treasury bonds and domestic public debt (already at unsustainable levels), competing with the credit the private sector needs.
Insecurity Will Continue to Deter Investment
Another critical point highlighted by Cortez concerns business security. He notes that initiatives like the recently launched “Gold Visas” to promote tourism investment are largely “cosmetic” measures in the face of the persistent kidnapping threat. “I don’t believe this initiative will yield any real results. The state still does not deal seriously with kidnappings, a phenomenon that has lasted more than 15 years,” he criticized.
The impact goes beyond physical security: entrepreneurs move their families out of the country, reducing consumption and harming other jobs and services. Cortez explains that even profit reinvestment is affected, as a substantial portion of money will go to supporting entrepreneurs’ families abroad. “In any case, Mozambique loses money,” he stressed.
“I continue to see a government that does not touch structural issues to change the country’s scenario. What hinders development is the combination of political interests and gangsters.”
— Edson Cortez
He also warns that the current environment attracts groups interested solely in money laundering, risking Mozambique’s return to the Financial Action Task Force (FATF) grey list.
Currency Crisis with No End in Sight
Cortez admits pessimism regarding the findings of a CIP study. “After our investigation into the causes of foreign currency shortages, we concluded that banks further restricted foreign currency circulation through opaque or non-transparent channels within the banking system, further limiting access to foreign currency for individuals and companies. This is negative for an economy that imports almost everything,” he observed.
Thus, Cortez presents two different scenarios, both risky. First, if the Bank of Mozambique maintains administrative control over exchange rates in 2026, inflation and currency shortages will continue, hindering imports and exports, particularly for businesses. “If the dollar rises, fuel costs increase, and consequently, the prices of all goods and services go up. Even if the South African rand maintains its exchange value, consumers will pay more for transport and products,” he explained.
Second, if the central bank abandons the administrative control of the exchange rate, CIP predicts a sharp depreciation of the metical. This would worsen financial difficulties for poorer families, who make up the majority of the population.
Health Sector Neglected
Cortez also warned about reduced State Budget allocations for the health sector, worsened by the exit of international partners like USAID. He highlighted the negative implications for women, children, and the elderly, the primary users of health services.
The proposed 2026 Economic and Social Plan and State Budget (PESOE) suggests a 5.3% reduction (equivalent to 2,741.5 million meticais) in health sector allocations compared to 2025, in a context of ongoing shortages of medicines, consumables, and medical-surgical materials.
Cortez believes that, with USAID’s exit, the government should have planned to cover the resulting assistance gap. Instead, “we have a budget reflecting reduced resources for health,” he criticized.
2026: What Needs to Change?
Without reforms, Mozambique will continue to face economic, social, and governance challenges. Cortez notes that even when the government has good intentions in certain areas, it is hindered by private interests and internal ‘gangsters’ that block development. “I continue to see a government that does not tackle structural issues to change the country’s scenario. What hampers development is the combination of political interests and gangsters with enough power to stall socioeconomic progress.”
He emphasizes that only firm, transparent, and public-interest-focused political action can change the country’s course, ensuring that resources and policies truly benefit the population. Unfortunately, this is not expected for 2026, he concludes.
Text by Celso Chambisso • Photo: D.R.
