The country’s public debt has increased from $12.37 billion in 2019 to $12.97 billion in 2020. With about $1.95 billion, China is the country that currently has the most money to receive from Mozambique.
The increase in Mozambique’s public debt from 2019 to 2020 is mainly explained by the IMF’s disbursement of $308.9 million for the country to cope with covid-19 and the worsening of domestic debt by $305.9 million.
According to the Annual Public Debt Report, quoted by the newspaper “O País”, released on the website of the Ministry of Economy and Finance, Mozambique’s public debt remains unsustainable and the country continues to be in the condition of over-indebtedness.
“Preliminary estimates point to a slight deterioration of the sustainability ratios in 2020,” the document states. This situation increasingly complicates access to low-cost financing for the country on the international market.
Although the internationally recommended limit of public debt in relation to GDP is 30%, estimates indicate that Mozambique had more than double, i.e. 62.7%, meaning that the country has weak debt support capacity.
Of the total public debt in 2020, $10.1 billion was contracted outside the country and $2.8 billion within the country, an 11% increase from 2019. Last year, 92% of the debt had variable interest rates and only 8% fixed.
Among the entities that lent money to the country, six hold 75% of the amount, they are: World Bank (29%), African Development Bank (9%), China (19%), Ematum creditors (9%), now public debt, Portugal (5%) and Japan (4%).
