Mozambique’s public debt-to-GDP ratio has almost halved since 2016, to 76 per cent, but remains above the sustainability limit set for low-income countries, according to a government report.
‘Despite this improvement, the country still has debt ratios above the recommended sustainability thresholds (60 per cent of GDP) for low-income countries,’ reads a government report on fiscal risks for 2025, consulted on Friday 13 by Lusa.
According to the document, from the Ministry of Economy and Finance, the public debt ratio, including contingent liabilities, fell from 81.8 per cent of Gross Domestic Product (GDP) in 2022 to 76 per cent of GDP in 2023, a decrease of 5.8 percentage points in one year.
In nominal terms, Mozambique’s public debt stock totalled 14,467 million dollars (13,063 million euros) at the end of 2022, rising to 15,202 million dollars (13,727 million euros) in 2023, an increase absorbed in this case by higher GDP growth.
‘This reduction reflects the improvement in nominal GDP in relation to the ‘stock’ of total debt in 2023,’ he explains.
In 2016, this ratio reached 123.6 per cent of GDP, the document adds.
‘During the period under review, there was a downward trend in the trajectory of external debt and an upward behaviour of domestic debt,’ it adds.
It also states that ‘although external debt represents a greater proportion of GDP than domestic debt’, domestic debt servicing in 2025 will continue ‘to have a greater weight, with around 65 per cent of debt servicing’, which corresponds to 90.3 billion meticals (1,276 million euros).
‘The risk of refinancing domestic debt persists, evidenced by the growing concentration of maturities in the short term,’ the document points out, emphasising that the average maturity of domestic debt fell from 9.3 to 8.2 years, from 2022 to 2023, “while debt maturing within a year increased from 15% to 15.9%”.
‘2025 is expected to be critical, due to the considerable volume of bonds (OT) coming due, increasing the pressure on the public budget,’ the document warns.
It adds that ‘vulnerability on total debt burdens decreased in 2023’ and that the proportion of public debt subject to changes in interest rates ‘decreased from 35.4 per cent in 2022 to 33.4 per cent in 2023’.
‘Providing greater stability to the debt service,’ he concludes, recognising that on the other hand the debt contracted at a fixed interest rate increased from 77.3% in 2022 to 83.3% in 2023.
Lusa
