The Bank of Mozambique (BdM) has once again warned, for the second time this year, that domestic public debt “continues to worsen,” after rising to a total of more than €6.5 billion.
“Domestic public debt continues to worsen, hampering the functioning of the financial market,” the central bank warned in a statement released following the Monetary Policy Committee meeting held Monday (23) in Maputo.
In the same statement, it is noted that domestic public debt, excluding loan agreements, leases, and overdue liabilities, stands at 6.5 billion euros, representing an increase of 166 million euros compared to December 2025.
“Delays in the payment of domestic public debt by the government persist, impacting the weak appetite for government securities and the rigidity of interest rates in the interbank money market,” the final statement notes, reiterating warnings already made at the previous meeting in January.
By the end of 2025, Mozambique had accumulated arrears in domestic public debt service payments of approximately 63.2 million euros due to cash flow difficulties, according to official information.
“The accumulation of these arrears resulted mainly from constraints on revenue collection, against a backdrop of economic slowdown and pressure on the Treasury’s liquidity,” states a report by the Ministry of Finance on the evolution of public debt in 2025.
The document provides no information on the eventual settlement of these amounts, indicating only that approximately 34.1 million euros corresponded to principal and 29.1 million euros to interest. The same report notes that the country ended the last quarter of 2025 with 1.4 billion euros in public debt service expenses.
Additionally, liability management operations, specifically Treasury Bond exchange auctions conducted throughout 2025, helped alleviate pressure on debt service by approximately 415.3 million euros through the extension of maturities and risk reduction.
According to the same data, the stock of public debt maintained a moderate growth trajectory throughout 2025, rising from 14.5 billion euros in the first quarter to 14.8 billion euros in the fourth quarter, representing an increase of 2.16%.
