The International Monetary Fund plans to send a mission to Mozambique in the coming months, as the Southern African nation seeks support to stabilise its finances amid rising debt and tightening funding conditions.
The visit comes as Mozambique faces mounting fiscal pressures, with public debt climbing and traditional financing sources increasingly constrained.
An IMF spokesperson said the planned trip to Maputo would allow staff to assess recent economic developments and government policy responses, as discussions continue over a potential new programme.
Mozambique’s previous IMF arrangement ended prematurely in April 2025, and authorities have since been in talks with the Fund on a fresh package to help shore up the country’s finances.
Further discussions are expected during the IMF and World Bank Spring Meetings in Washington next month, where policymakers will seek to advance negotiations.
More Read
Investor concerns over Mozambique’s debt sustainability have intensified in recent weeks.
Data from JPMorgan shows the country’s sovereign spread — the premium investors demand to hold its hard-currency debt over U.S. Treasuries — has widened to around 1,300 basis points, a level typically associated with severe financial distress.
The country’s debt challenges have deep roots, dating back to the Mozambique hidden debt scandal, which severely damaged investor confidence and limited access to international capital markets.
More Read
Since then, efforts to stabilise public finances have been complicated by delays in major liquefied natural gas projects, which were expected to boost exports, government revenues and overall economic growth.
A recent debt report from the finance ministry highlights the growing strain on public finances.
Total public debt rose by 6.8 percent in 2025 to 474 billion meticais (about $7.5 billion), reflecting continued borrowing needs amid weak revenue growth and limited external financing.
At the same time, reliance on domestic financing has increased sharply.
Central bank advances — short-term loans extended to the government to cover budget shortfalls — surged by more than 170 percent over the year, reaching 49.6 billion meticais, or about 10.5 percent of domestic debt.
Economists say such a rise in central bank financing is often a sign that conventional funding channels are under stress.
More Read
The IMF has previously warned that domestic banks, which are the primary buyers of government debt, may be reaching their limits in terms of appetite for additional lending to the state.
Meanwhile, net external financing has turned negative, indicating that outflows — including debt repayments — now exceed new inflows.
Analysts note that similar patterns in other African economies have preceded broader debt restructurings.
In Ghana, heavy reliance on central bank financing contributed to a full-scale debt overhaul, while Nigeria has converted large volumes of such lending into longer-term bonds to ease repayment pressures.
Mozambique now faces a narrowing set of policy options as it seeks to stabilise its finances without undermining economic recovery.
Securing IMF support could help unlock additional funding from other development partners and restore investor confidence, but would likely come with conditions aimed at strengthening fiscal discipline and improving transparency.
For now, the planned IMF visit signals a critical juncture for Mozambique’s economic policy, as authorities work to contain rising debt levels and rebuild access to sustainable sources of financing.
The outcome of upcoming discussions will be closely watched by investors and development partners alike, given the country’s fragile fiscal position and its reliance on external support to navigate growing economic challenges.
1 message remaining.Start a free Plus trial to keep the conversation going
