Fitch Ratings believes Mozambique may move toward restructuring its public debt before securing a new financing programme with the International Monetary Fund (IMF), amid growing pressure on public finances and limited access to external resources.
According to an analysis reported by Ecofin on April 20, Fitch argues that while a new agreement with the IMF could still be reached this year, it will largely depend on prior measures aimed at making the current level of debt—considered high by international creditors—more sustainable.
One of the signals highlighted by Fitch is the government’s recent hiring of financial advisors, interpreted as preparation for a potential restructuring process. According to Gabriel Comolet, an analyst at the agency, this move “suggests that a debt restructuring could occur before an agreement with the IMF.”
Although debt servicing linked to Mozambique’s only eurobond remains manageable in the short term, Fitch warns that liquidity pressures could worsen without external support. The country remains in a constrained financial environment, marked by limited access to foreign capital and strong reliance on the domestic market. In January, the agency reaffirmed Mozambique’s credit rating at “CCC,” reflecting weaknesses in short-term financing and higher budget deficits compared to peer economies. Public debt is projected to reach around 91% of GDP in 2025, weighing on growth prospects.
In an effort to strengthen its negotiating position, Mozambique recently fully repaid its debt to the IMF, with a $630 million payment made at the end of March 2026. However, while positive from a reputational standpoint, this step does not resolve the structural constraints of public finances.
In the medium to long term, expectations remain tied to liquefied natural gas (LNG) projects led by TotalEnergies. The resumption of operations in 2025, after years of suspension due to instability in the north of the country, has renewed investor optimism. Production is expected between 2029 and 2030 and is seen as the main driver of future revenues.
This outlook is already reflected in market performance: Mozambique’s eurobond maturing in 2031 has shown strong appreciation, ranking among the best-performing securities in emerging markets.
Until gas revenues materialize, Mozambique will need to focus on strengthening the credibility of its fiscal trajectory with creditors. A critical moment is expected in 2028, when eurobond principal repayments begin, making an orderly restructuring potentially key to preserving macroeconomic stability and restoring sustainable access to external financing.
Source: Diário Económico
