What You Need to Know
Mozambique’s Finance Minister Carla Loveira announced the full repayment of a €630 million debt to the IMF using net international reserves. This strategic move, made without altering the state budget, reflects the country’s strong financial position, with reserves reaching a record $4.152 billion. The Confederation of Economic Associations hailed this as a sign of macroeconomic responsibility and
Africa-Press – Mozambique. Mozambique’s Finance Minister Carla Loveira said on Tuesday that the government paid the total €630 million debt to the International Monetary Fund (IMF) with net international reserves without compromising state institutions.
“We paid our debt service to the IMF using the country’s net international reserves, which are available at international financial institutions,” she said.
She spoke in Maputo during celebrations for Mozambican Women’s Day, a national holiday. She explained that the resources used for the full €630 million early repayment were financial positions the country held, meaning no budget changes were necessary.
She said there was no risk to state institutions because the government did not use the state budget for the payment. Lusa reported on 12 March that Mozambique’s international liquid reserves grew in January to a new record of $4.152 billion (€3.595 billion), according to Bank of Mozambique statistical data.
These reserves, which are foreign currency needed to import goods and services, rose 1% in September to $3.937 billion (€3.409 billion) and again in October, after reaching a previous peak of $4.035 billion (€3.494 billion) in August. From December to January, reserves rose by almost 1% more, ensuring more than three months of import needs for goods and services.
Mozambique’s Confederation of Economic Associations (CTA) said on Friday that the debt settlement is a “significant sign” of macroeconomic responsibility and international credibility. The confederation also asked for attention to “large domestic debts”.
The Finance Ministry confirmed on Thursday that it had made a full and early repayment of €630 million to the IMF. The ministry said it had settled loans contracted under the Poverty Reduction and Growth Trust (PRGT), which provides low-interest financial support to low-income countries.
In a statement, the ministry said it made early reimbursements of all the country’s obligations under the PRGT program, totalling almost $699 million (€630 million).
Business leaders believe that settling the total debt builds partner confidence and creates conditions to deepen economic and financial cooperation. However, they warned that macroeconomic stability requires “consistent internal measures that promote inclusive and sustainable growth.”
Mozambique has faced significant economic challenges in recent years, including high levels of debt and reliance on international financial institutions. The government’s decision to repay its IMF debt using international reserves is a strategic move aimed at enhancing its credibility and financial stability. This repayment is part of broader efforts to manage the country’s economic obligations while ensuring that essential state functions remain unaffected. The use of reserves for debt repayment indicates a careful approach to fiscal management, reflecting the government’s commitment to maintaining macroeconomic stability and fostering international partnerships.
