The Government considers the early repayment of its debt to the International Monetary Fund (IMF) a clear sign of prudent public financial management and a significant step toward restoring external confidence, amid increasing scrutiny from international markets.
According to Lusa, the position was presented this Tuesday in Maputo by the Minister of Finance, Carla Loveira, in Parliament. She emphasized that the full repayment of $698.6 million ahead of schedule demonstrates the country’s ability to responsibly manage its external obligations.
“By settling this obligation ahead of time, the Mozambican State demonstrates prudent management of its external commitments, reinforcing its reputation as a credible partner within the international financial system,” the minister said in response to questions from lawmakers.
According to Loveira, the move sends a clear signal to markets, highlighting the country’s commitment to honoring its obligations and restoring confidence, in a global context marked by heightened scrutiny over transparency and public debt sustainability.
“The reduction in exposure to the IMF is interpreted as a sign of a strengthened external position and greater autonomy in conducting economic policy, which tends to improve the sovereign risk profile,” she added, noting that this credibility boost could, over the medium term, translate into better external financing conditions and increased investor interest.
The payment, confirmed by the Ministry of Finance in April, was carried out on March 23 and fully settled financing contracted under the Poverty Reduction and Growth Trust (PRGT), including rapid credit facilities agreed in 2019 and 2020, as well as the extended credit facility from 2022.
To carry out the operation, the Government used Net International Reserves (foreign currency assets used to ensure external payments, including imports), as part of a broader strategy aimed at macroeconomic normalization and strengthening institutional confidence.
Carla Loveira stressed that the operation was not merely a financial act but a strategic economic policy instrument, with direct impact on external credibility, investment attraction, and the consolidation of macroeconomic stability.
She further explained that, under agreements with the IMF, the Bank of Mozambique provided guarantees for these obligations, resulting in the duplication of debt records in both the State General Account and the central bank’s balance sheet—a situation the Government sought to address through early repayment.
The decision comes amid external financing constraints faced by the country since late 2024 and is part of the Public Debt Management and Sustainability Strategy for 2025–2029, which aims to reduce external exposure and strengthen macroeconomic stability. By December 2025, external debt accounted for 40.81% of Gross Domestic Product.
The operation takes place roughly one year after the suspension of the financing program agreed in 2022 between the IMF and the Mozambican Government, with negotiations currently underway for a new agreement considered key to sustaining the country’s economic stabilization path.
Source: Diário Económico
