On Tuesday, April 7, the British consulting firm Oxford Economics stated that Mozambique’s repayment of its debt to the International Monetary Fund (IMF) is “a sign of desperation” due to the need for external financial aid, adding that it is “a bold attempt” to secure financing.
“Paying off the debt early and in full is normally considered a financially responsible measure, and as such, it would be easy to interpret Mozambique’s latest move as a sign of fiscal prudence; however, it is more accurate to reinterpret the country’s actions as a sign of desperation,” wrote the analysts cited in a document released by Lusa.
According to the agency, Mozambique’s recent payment is a bold attempt to secure more credit from the IMF, noting that it expects the new loan agreement to be finalized in the second quarter of 2026. “A new loan will raise the country’s public debt to a projected 125% of Gross Domestic Product (GDP), before the delayed effects of fiscal consolidation reduce it in the medium term,” it warned.
According to Oxford Economics, “there is a certain irony in Mozambique’s recent debt repayment to the IMF,” noting that the country faces considerable fiscal and external pressures due to a massive public debt burden and an overvalued currency.
The Ministry of Finance confirmed on Thursday, April 2, that it had made a “full and early repayment” of $701.4 million to the International Monetary Fund, settling loans taken out under the Poverty Reduction and Growth Trust (PRGT).
In a statement, the government noted that the IMF’s PRGT is a window that provides concessional financing to countries like Mozambique, which face fiscal and balance-of-payments pressures.
Diário Económico clarified this week that recent IMF data indicate the outstanding loan balance fell from 514.04 million Special Drawing Rights (SDR) at the end of February to zero as of March 27, following repayments of the same amount and no new disbursements during the period. In practical terms, the payment amounts to $701.4 million.
According to the government’s statement, the loans repaid by the state correspond to financing disbursed by the IMF under the PRGT for the 2019 Rapid Credit Facility, for the 2020 Rapid Credit Facility, and for the 2022 Extended Credit Facility, emphasizing that “these programs had all expired and no additional financing was expected.”
“The government therefore decided to repay the country’s obligations to the IMF. The early repayment allows for the preservation of the central bank’s balance sheet and its ability to consolidate macroeconomic stability,” he noted.
