Mozambique's Finance Minister, Carla Louveira, said on Thursday, 1 October, that the country should take on debt only to finance investments that generate economic and social returns, and not to cover consumption expenditure — a position she outlined as public debt stock already stands at 78% of gross domestic product.
"We must not contract debt to finance consumption, but rather investment that generates economic and social returns," Louveira said at the opening of the second Coordinating Council of the Ministry of Finance, held in Beira, Sofala province.
Presenting the country's macro-financial framework, the minister said prudent debt management remains one of the government's priorities at a time when the debt burden remains elevated.
"Debt service absorbs almost 30% of state revenue," Louveira stressed, noting that this level of expenditure narrows the fiscal space available to fund other areas of development.
Against this backdrop, the minister called for greater fiscal discipline and the consolidation of gains achieved in public finances in recent years. "We must preserve macroeconomic stability and ensure the sustainability of public finances," she said.
Louveira also emphasised the importance of transparency and integrity in the management of public resources, arguing that expenditure quality and institutional trust are critical to fiscal sustainability.
"Transparency, integrity and sound management of public resources must continue to guide our actions," she declared, adding that the government is strengthening oversight mechanisms and measures to prevent economic crimes.
The minister also highlighted the approval of the Supplier Debt Payment Strategy, which forms part of broader efforts to improve the relationship between the public and private sectors. "We need to restore the confidence of economic agents and ensure greater predictability in payments to suppliers," she said.
According to Louveira, greater predictability in payments could help improve the business environment and reinforce the state's financial credibility. Among the remaining priorities she outlined are the modernisation of financial administration, improvements in domestic revenue collection, and the strengthening of public expenditure control systems.
Despite the challenges posed by the high debt burden and the international environment, the minister argued that a combination of economic growth, increased domestic revenue mobilisation, and greater fiscal discipline should help consolidate the country's macro-financial stability. She also called for deeper financial governance reforms and stronger oversight mechanisms to improve public administration efficiency.
Source: Diário Económico
Original article: https://www.diarioeconomico.co.mz/2026/10/01/economia/governo-defende-contraccao-de-divida-apenas-para-investimentos-com-retorno/
