Africa-Press – Mozambique. Mozambique’s debt servicing costs will grow by 18% in 2024, to more than 116.631 billion meticais (€1.712 billion), according to Mozambican government figures to which Lusa had access on Monday.
According to the documents supporting the proposal for the Economic and Social Plan and State Budget (PESOE) for 2024, under discussion in parliament, to which Lusa had access today, the cost of servicing Mozambique’s debt – interest payments and principl – is estimated to be equivalent next year to 7.6% of the estimated Gross Domestic Product (GDP).
For this year, the government’s forecast for the cost of servicing the debt is 98.817 billion meticais (€1.451 billion), equivalent to 7.5% of the GDP expected for 2023. The previous year, the cost of servicing the debt was 72,363 million meticais (€1.063 billion), equivalent to 6.1% of GDP.
“The acceleration in capital amortisation is related to the framework of the External Debt Restructuring Agreement, with maturities to be verified in 2024. In addition, a change in the external debt interest rate is expected for bonds maturing in 2024,” reads the document.
As a result, more than half of the cost of servicing Mozambique’s public debt next year will be capital repayments, amounting to 60.915 billion meticais (€894.7 million) and 55.716 billion meticais (€818.4 million) in interest payments, of which 41.430 billion meticais (€608.5 million) relates to domestically issued debt, through bonds and treasury bills.
The governor of the Bank of Mozambique recognised this month “the strong pressure on public spending” in the country “in a context of weak revenue collection and limited sources of external financing”, which “is contributing to an increase in fiscal risk and domestic indebtedness”.
“The increase in spending stems above all from the implementation of the wage reform and spending related to the electoral cycle,” he warned on 1 November.
By way of “example”, he pointed out that the domestic public debt, which in 2022 stood at 275 billion meticais (€4.080 billion), “increased by around 19% in the last 10 months” of this year, to 327 billion meticais (€4.852 billion).
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