Mozambique has placed almost 35.1 billion meticals in Treasury Bonds (OT) this year, and could issue another 1.5 billion meticals, but it hasn’t held any auctions since September.
According to data from the Mozambique Stock Exchange (BVM) to which Lusa had access this Thursday, November 30, the last debt auction took place on September 19, with the placement of 3.5 billion meticals. The country also placed another 6.1 billion meticals in a single OT issue, also through the stock exchange, on October 10, but in this case only with direct subscription by Specialized Treasury Bond Operators (OEOT).
In this way, Mozambique reached 96% of the limit stipulated for 2023, after making several monthly issues until September.
According to decree 14/2023, issued by the Ministry of Economy and Finance (MEF) on January 18, the issuance of OT – public debt issued with longer maturities – for this year provides for an overall limit of 36.6 billion meticals, preferably in two monthly issues, until December 5.
In addition, BVM data indicates that 15 issues have already been made – including reopenings of scheduled issues – in 2023, with maturities of up to ten years and interest ranging from 16% to 19%, thus reaching almost 96% of the legal limit for OT debt for this year.
The amounts raised in each operation ranged from 475 million meticals on August 8 to the 5.9 billion meticals raised in the operation held on March 7, through auctions, and the direct placement held on September 19.
However, a few days ago, the Minister of the Economy and Finance, Max Tonela, admitted in Parliament that new public debt securities could be issued in order to rationalize domestic debt and guarantee its sustainability.
At stake, he explained, is the government’s approval, in June 2022, of the Medium-Term Strategy for Public Debt Management for the period 2022-25, providing for “a set of measures to rationalize domestic indebtedness”.
“To make these measures viable, reforms are being considered to create efficient channels for non-bank creditors to participate in the market and to broaden the range of market participants, also introducing the segment of institutional investors with a natural preference for long-term assets, such as pension funds and insurance companies,” he pointed out.
“Among the key reforms to this end are the rationalization and diversification of the methods of issuing Treasury Bonds, including the introduction of new public debt securities products,” he also listed.
