The interest rates demanded by investors to trade Mozambique’s public debt rose to their highest level since 2023 after the government signaled its intention to restructure the debt, Bloomberg reported. This situation highlights concerns about the country’s ability to meet its financial obligations.
According to Bloomberg, the $900 million in debt securities maturing in 2031 fell 3.6 cents to 72.98 cents, the lowest level since June 2023. This movement reflects investors’ low confidence in the stability of Mozambique’s public debt.
Last week, the government stated that it intends to restructure the public debt and restore credibility in international markets by hiring U.S. consultants from Alvarez & Marsal, hoping for “tangible and measurable benefits.”
The Ministry of Finance indicated in a statement on April 2 that, with this consultancy, it projects a “significant reduction in debt service” through strategic negotiations and restructurings. The estimated savings are expected to far exceed the cost of the consultancy, in addition to improving the risk profile of the debt portfolio.
The government statement also notes that the consultancy will create “fiscal space that will allow the government to increase investment in priority sectors such as health, education, and infrastructure,” thereby restoring credibility with the markets and strengthening the institutional capacity of the Ministry of Finance.
According to Bloomberg, citing analyst Leo Morawiecki of Abrdn Investments, Mozambique had an external debt of 8.3 billion euros at the end of 2025. The expert added that the restructuring could serve to extend the debt’s maturity, given that gas revenues are not expected to materialize until 2031.
The government emphasized that the hiring of Alvarez & Marsal stems from the pressure that the debt exerts on public spending. The firm will help address the “technical and exceptional complexity of Mozambique’s debt challenges” by developing a restructuring plan aligned with short- and medium-term fiscal consolidation.
The stock of domestically issued public debt has tripled since 2020, reaching 6.6 billion euros, nearly 30% of the Gross Domestic Product. Alvarez & Marsal, headquartered in New York with a global presence, specializes in turnaround and performance improvement, having worked on cases such as Lehman Brothers, the U.S. bank that went bankrupt during the 2008 financial crisis, and Warnaco, a textile and apparel company in financial distress, helping both to restructure their operations and debt.
