Mozambique's external public debt declined 7.5% in the first quarter of 2026, falling to €7.6 billion at end-March from €8.2 billion recorded at the close of 2025.
The reduction, equivalent to approximately €615 million, was driven primarily by the early repayment of an obligation to the International Monetary Fund (IMF), regular debt service payments, and a policy of securing financing under highly concessional terms, according to Lusa.
According to the Quarterly Public Debt Bulletin published by the Ministry of Finance, the operation carried out by the Bank of Mozambique involved the transfer of an IMF obligation from the external debt component to domestic debt. The Ministry clarified that this reclassification reduced the external debt figure without affecting total public debt, as the liability was simply moved to the domestic component.
Domestic debt of the central government moved in the opposite direction, rising 12% from €6.3 billion at end-2025 to €7.1 billion in March. This increase was driven by the Bank of Mozambique's advance to the IMF, valued at €590 million, and by the contracting of new debt with the central bank totalling €152 million.
As a result of these movements, total public and publicly guaranteed debt rose to approximately €15.2 billion, equivalent to 75.2% of gross domestic product (GDP) — an increase of €108 million compared with end-2025.
The bulletin also points to a sharp increase in external debt service payments during the first quarter. Payments totalled €669 million, compared with €101 million in the fourth quarter of 2025, an increase of approximately €568 million.
The Ministry of Finance attributed this surge primarily to the extraordinary IMF repayment that triggered the reclassification of the obligation from external to domestic debt. Of the total paid in the first quarter, approximately €628 million corresponded to principal amortisation and €41 million to interest payments. Amortisations to the IMF accounted for roughly €607 million.
At end-March, multilateral creditors continued to hold the largest share of Mozambique's external debt, accounting for 52% of the total. Bilateral creditors represented 38%, while the MOZAM 2032 sovereign bond corresponded to 10.1% of the external portfolio.
In May, Finance Minister Carla Loveira stated that the full and early repayment of the IMF debt, valued at €602 million, demonstrated the state's capacity to manage its external obligations prudently.
"By settling this obligation ahead of schedule, the Mozambican state demonstrates a capacity for prudent management of its external commitments, reinforcing its reputation as a credible partner in the international financial system," the minister told Parliament.
Source: Diário Económico
Original article: https://www.diarioeconomico.co.mz/2026/08/06/economia/financas/divida-externa-diminuiu-75-no-primeiro-trimestre/
