The economic week was marked by an important financial operation to avoid default on domestic debt, proposals for more active state intervention in economic recovery and significant progress in financing the Mozambique LNG energy project.
Domestic debt swap: A necessary measure but with fiscal risks
The economic week began with the highlight being the decision taken by the government on 11 March regarding the exchange of domestic debt issues worth 3.6 billion meticals (56.6 million dollars). The operation was aimed at avoiding an immediate default and guaranteeing liquidity for the Treasury, although economists such as Dimas Sinoa, interviewed by Diário Económico, have warned of sustainability risks in the medium and long term, due to the high cost of servicing this debt, which currently represents 60 per cent of the total cost of Mozambique’s public debt.
For his part, Osvaldo Alexandre, a specialist in monetary and fiscal economics, warned that this type of measure could have inflationary consequences. ‘If the market becomes overheated, inflation could rise, which would force the Bank of Mozambique to raise interest rates,’ he explained.
State must take a more active role in economic recovery
In the wake of this delicate financial situation, economist Oldemiro Belchior also launched a study this week entitled ‘Strategic Vision for Mozambique’s Economic Recovery 2025-2030’. In the document, Belchior emphasised the need for a more active role for the state in the economy, advocating direct interventions to boost economic recovery.
The economist suggests strengthening strategic sectors such as agriculture, manufacturing, tourism, renewable energies and technological infrastructures, identifying them as fundamental to boosting the country’s recovery from recent economic and social crises.
TotalEnergies secures 13.7 MM$ for Mozambique LNG project
In parallel with the discussions on domestic debt and economic recovery, TotalEnergies also confirmed an important financial breakthrough this week.
Nicolas Cambefort, managing director of the French multinational, announced that the company has already secured 13.7 billion dollars, corresponding to 87 per cent of the total needed to implement the Mozambique LNG Project, in Area 1 of the Rovuma basin. This strategic milestone, reported in the newspaper O País, has had the decisive support of the US Exim Bank, which has reaffirmed significant financing, complementing previous commitments from Asian financial institutions, especially Japanese ones.
Industrial sector faces challenges related to political and financial stability
At the end of the week, the Mozambican Industrial Association (AIMO), through its president Rogério Samo Gudo, drew attention to additional challenges facing the industrial sector, namely related to the recent demonstrations, high interest rates and a shortage of foreign currency.
In an interview with Diário Económico, Gudo stressed that political stability is essential for economic recovery, emphasising that strengthening national industry can make a significant contribution to reactivating the economy and improving people’s living conditions.
Text: Felisberto Ruco
