The Mozambican state closed the third quarter with a public debt stock of 971.7 billion meticais, an increase of 5.1% compared to the end of 2022, according to the economic and social balance report on the implementation of the State Budget from January to September 2023.
This increase “was largely influenced by the evolution of the domestic debt, in a context of relative stabilization of the external debt”.
In the document, the Ministry of Economy and Finance (MEF) states that external debt remained practically unchanged until September, at 643.4 billion meticais, while domestic debt grew by 16% compared to December, reaching 328.2 billion meticais at the end of September.
“Measures are being implemented to reduce the cost of contracting new loans, while at the same time improving measures to manage the portfolio of existing loans,” says the MEF report, adding that they focus on “strengthening the rigour of the criteria for selecting and prioritizing projects to be financed using concessional credits and maximizing the use of multilateral and bilateral financing windows in the form of donations.”
When it comes to contracting internal financing, the document also states that “the government has been giving priority to extending the maturity of the debt and reducing the interest rate in line with the current Public Debt Management strategy with the entry of institutional investors (Pension Funds and Insurance Companies)”.
In general, the Executive assumes in the report that “with a view to improving public debt management processes, a procedures manual is being drawn up which should document the operational flow for all stages of planning, contracting, managing and monitoring the debt portfolio”.