The President of the Republic, Daniel Chapo, on Thursday, April 9, described the decision to fully and prematurely repay $701.4 million to the International Monetary Fund (IMF) as “courageous,” stating that it demonstrates Mozambique’s “responsibility.”
According to a Lusa report, Chapo confirmed that the “early” and “full” repayment was made using international reserves, during his speech at the opening of the fifth ordinary session of the Central Committee of the Mozambique Liberation Front (Frelimo, the ruling party), which he leads.
“This courageous decision should be seen from a positive and strategic perspective, as a clear signal of Mozambique’s macroeconomic responsibility and its commitment to strengthening international stability. And because, equally, the dignity of a people has no price,” said the President.
“For this reason, we will continue to adopt measures that stimulate domestic production and attract more investment, promoting a more favorable business environment and an increasingly competitive economy,” he added, emphasizing the Government’s intention to move forward with a new IMF support program, which has been under negotiation since 2025.
“We reaffirm our willingness to strengthen our strategic partnership with the IMF and other bilateral and multilateral partners, on a mutually beneficial basis and with mutual respect between the parties,” Chapo stressed.
Net International Reserves (NIR) rose sharply in February to a new record of $4.2 billion, before the Government used them in March to settle the IMF debt.
These reserves — foreign currency needed to import goods and services — had fallen by 1% in September last year, according to data from a statistical report by the Bank of Mozambique, reaching $3.9 billion, the same level recorded in October, following the previous peak of $4 billion in August.
From December to January this year, reserves increased by nearly 1%, according to historical data in the report, ensuring more than four months of import cover for goods and services, and rose again in February to a new high.
On Tuesday (7), the Minister of Finance, Carla Loveira, assured that the decision to repay the IMF debt does not compromise state institutions. “We paid the debt service we have with the IMF using the country’s NIR.”
The Ministry of Finance confirmed on Thursday (2) that it carried out a “full and early amortization” of $701.4 million to the IMF, settling financing contracted under the Poverty Reduction and Growth Trust (PRGT).
Loveira explained that the funds used for the full and early repayment of $701.4 million to the IMF “are financial resources that the country already holds” and that there is no need for a “budget revision for this purpose.” According to the minister, there is no risk of compromising the functioning of state institutions with this repayment, “since it was not carried out using the State budget.”
The Ministry of Finance reiterated on Thursday (2) that it had made a “full and early amortization” of $701.4 million to the IMF, settling financing contracted under the PRGT.
In a statement, the institution said it had carried out the “early repayment of all of Mozambique’s obligations” related to the IMF’s PRGT program, totaling $698.5 million.
Mozambican business leaders consider that the full settlement of the country’s debt to the IMF helps strengthen the confidence of external partners and creates conditions for deeper economic and financial cooperation. However, they warn that macroeconomic stability must be accompanied by “consistent domestic measures that promote inclusive and sustainable growth.”
Source: Diário Económico
