The accumulated value of the Mozambican State Enterprise Sector (SEE) debt fell 1.5 per cent in the second quarter compared to the previous one, to 40.8 billion meticais, according to the Ministry of Economy and Finance (MEF) report on public debt.
From 31 March to 30 June, according to the document, in absolute terms, the accumulated value (‘stock’) of the debt of almost two dozen Mozambican public companies, or those in which the state has a stake, fell by 646 million meticais.
“This variation is the result of both the stagnation of the external direct debt ‘stock’ and the 2.75 per cent slowdown in the domestic direct debt ‘stock’,” explains the MEF report, adding that there was also “compliance with debt servicing” and the “adoption of the measure of contracting new financing only when it proves essential”.
The report also points out that the total stock of public and guaranteed debt at the end of the second quarter of 2023 grew, in absolute terms, by 313.91 million dollars, to almost 15.7 billion dollars at the end of June.
Against this backdrop, the Mozambican government previously identified natural disasters, public debt above sustainability limits, inflation and the performance of the ESS, namely three companies, as the main fiscal risks in 2024.
Meanwhile, the Fiscal Risks Report (RRF), produced by the Ministry of Finance’s Risk Management department and reported last September by Lusa, states that the public debt ratio, including contingent liabilities, has fallen from 109% of Gross Domestic Product (GDP) in 2021 to 82% in 2022, representing a reduction of 26.8 percentage points. This document presents the main sources of fiscal risks and mitigation measures, “in order to reduce the exposure of public finances to unexpected events”.
Even so, the report points out that “the country continues to have debt ratios above the sustainability thresholds recommended for low-income countries”.
However, exposure to the ESS is another of the risks identified for 2024 by the RRF, which emphasises that this risk “improved considerably” in 2022, reflected in the reduction in the debt stock from 22% of GDP in 2021 to 4% of GDP.
The RRF also warns that the airline LAM, oil distributor Petromoc and telecoms operator Tmcel “continue to deserve greater attention from the state, due to their fragile financial situation”.
In addition, the RRF identified other risks that were not classified as high, but which “could possibly impact on public finances” next year, namely economic growth, the performance of the financial sector, pension payments and the results of Public-Private Partnerships.
“The economy is expected to continue to perform well in the medium term, with average economic growth of 5.4 per cent. However, risks and uncertainties prevail and could result in an underestimation of revenues by an average of 0.9 per cent of GDP,” concludes the RRF.
