Mozambique’s economic week was defined by fresh signals on the trajectory of public finances, progress across major natural gas projects, and the strengthening of financing mechanisms for businesses. The main developments included the government’s targets to reduce the debt service burden, forecasts for rising gas revenues, new contracts for Rovuma LNG, and the release of additional resources for small and medium-sized enterprises (SMEs).
Debt continues to weigh on public finances
The government plans to reduce the debt service burden to 5.9% of gross domestic product (GDP) by 2029, down from an estimated 7.5% in both 2025 and 2026. According to the Medium-Term Fiscal Framework (CFMP) 2027–29, debt service charges are projected at 5.8% of GDP in 2027 and 2028 before edging up slightly to 5.9% in 2029.
Despite the relative decline, the nominal value allocated to debt servicing is set to rise from €1.4 billion in 2027 to €1.5 billion in 2028 and €1.6 billion in 2029. At the same time, the government projects a reduction in public debt from 72.2% of GDP in 2025 to 67.1% in 2029, through fiscal consolidation, economic growth, and restraint on new borrowing.
INSS under scrutiny over alleged €4.3 million diversion
Public finances also came under pressure following allegations of irregularities at the National Social Security Institute (INSS). The Public Prosecutor’s Office has accused senior officials at the institution, a businessman, and a communications company of involvement in an alleged corruption scheme that reportedly caused losses of approximately €4.3 million to the state. The case involves at least six suspects and relates to the awarding and execution of service contracts.
Gas sector bolsters revenue and investment expectations
Prospects in the energy sector are considerably more favourable. The government forecasts that revenues from liquefied natural gas (LNG) production will reach US$101 million in 2029, up from a projected US$80.1 million in 2027 and US$78.4 million in 2028. The increase is expected to track the entry into production of new projects in the Rovuma Basin in Cabo Delgado.
The anticipated revenue growth is underpinned by progress across the main gas projects. Coral Norte is expected to begin production in 2028, while Mozambique LNG, led by TotalEnergies, is projected to come on stream in the final quarter of 2029. Rovuma LNG, led by ExxonMobil, represents another major investment planned for the Rovuma Basin, with a final investment decision targeted for September.
ExxonMobil awards US$1.1 billion in contracts
In Area 4, ExxonMobil and its partners in the Rovuma LNG project have awarded approximately US$1.1 billion in pre-investment contracts for critical long-lead equipment. The contracts cover subsea production systems, large-diameter valves, and offshore pipelines, among other items, in a move designed to advance preparatory works as the partners approach their final investment decision.
SMEs gain expanded access to financing
The anticipated spillover effects of the gas investment cycle are also reaching the broader business community. The Zambezi Valley Development Agency announced the availability of approximately €5.1 million to finance SMEs in the country’s central and northern regions. Currently, 56 business plans are under review in the third phase of the process, with funding to be preceded by the establishment of commercial relationships between SMEs and larger companies.
The SME financing initiative forms part of a broader strategy to expand domestic businesses’ access to capital. Since 2025, the country has made US$74 million available through two national support mechanisms for micro, small, and medium-sized enterprises, including the Catalytic Fund for Innovation and Demonstration — Conecta Negócios — financed by the World Bank.
Sovereign Fund records first investment returns
As the government seeks to ease debt pressures and grow future extractive sector revenues, the Sovereign Fund has begun to deliver the first results of its investment strategy. In the second quarter, the Fund generated €827,000 in returns, equivalent to a yield of 0.41%, bringing cumulative gains since the start of the year to approximately €1.75 million.
At the end of June, the Sovereign Fund reported a market value of €102.9 million, of which €100.9 million represented capital derived from natural gas revenues. The portfolio was concentrated in dollar-denominated assets, which accounted for approximately 70% of the total, with euro-denominated assets making up the remaining 30%.
Source: Diário Económico
Original article: https://www.diarioeconomico.co.mz/?p=532572
