The country’s sovereign bonds stood out among emerging market securities this week, after President Daniel Chapo expressed confidence in securing a new financing program with the International Monetary Fund (IMF) in early 2026, according to Bloomberg.
Yields on the $900 million bond maturing in 2031 fell by up to 24 basis points, reaching 12.5% — the lowest level since November 18. This movement reduced the spread between Mozambican bonds and U.S. Treasury securities to 1,009 basis points, according to indicative data from JPMorgan Chase & Co. indices.
“The decline in yields was driven by the President’s comments regarding approaching the IMF for funding,” said Maciej Woznica, portfolio manager at Sweden-based Coeli Frontier Markets AB.
In an interview with the agency, Daniel Chapo indicated that, although amounts have not yet been determined, negotiations are expected to start soon. “Only when we begin discussing the program itself will we know the amounts involved,” the head of state noted.
Mozambique currently ranks among the three African countries — along with Senegal and Gabon — whose bonds have spreads above 1,000 basis points, a threshold often associated with high financial risk.
The country faces serious economic constraints, in a context marked by post-election instability that has affected productive activity. Against this backdrop, the government hired New York-based consulting firm Alvarez & Marsal to provide technical assistance in restructuring public debt. By the end of 2024, total public external debt amounted to $9.8 billion.
During the same interview, President Chapo also revealed that administrative procedures are underway to restart the liquefied natural gas (LNG) megaproject led by TotalEnergies, valued at $20 billion.
According to Orson Gard, senior analyst at BMI, a Fitch Solutions division, progress on the LNG project is expected to boost foreign direct investment and increase confidence in the country. He added that IMF support could be decisive for economic stability.
“The return of IMF support will also sustain fiscal consolidation efforts, further strengthening investor positioning towards Mozambique,” he emphasized.
