{"id":98753,"date":"2026-03-25T16:44:04","date_gmt":"2026-03-25T16:44:04","guid":{"rendered":"https:\/\/www.africa-press.net\/mozambique\/all-news\/world-bank-flags-unsustainable-public-debt"},"modified":"2026-03-25T17:31:40","modified_gmt":"2026-03-25T17:31:40","slug":"world-bank-flags-unsustainable-public-debt","status":"publish","type":"post","link":"https:\/\/www.africa-press.net\/mozambique\/all-news\/world-bank-flags-unsustainable-public-debt","title":{"rendered":"World Bank Flags \u2018Unsustainable\u2019 Public Debt"},"content":{"rendered":"
\n

What You Need to Know<\/h4>\n

The World Bank has issued a stark warning regarding Mozambique’s public debt, labeling it as ‘unsustainable’ and highlighting significant arrears. The latest report indicates that public debt reached 91.4% of GDP by the end of 2024, with ongoing fiscal pressures exacerbating the situation. The Bank emphasizes the urgent need for fiscal reforms to address these challenges.<\/p>\n<\/div>\n

Africa-Press – Mozambique. <\/strong> <\/span>The World Bank today warned of a worsening of Mozambique\u2019s public debt, deemed \u201cunsustainable\u201d and with arrears amounting to 1.3% of GDP at the end of 2025, according to a report on the Mozambican economy.<\/p>\n

In the Mozambique Economic Update report, released today under the title \u201cFrom Fragility to Stability \u2013 Why Fiscal Reforms Cannot Wait<\/b>\u201d, the World Bank states that \u201cPublic debt is assessed as being in distress and deemed unsustainable\u201d.<\/p>\n

It notes that total public and publicly guaranteed debt stabilised at 91.4% of GDP at the end of 2024, but adds: \u201cThe recent World Bank\u2013IMF Debt Sustainability Analysis, published in February 2026, classifies Mozambique\u2019s overall public debt as \u2018in debt distress\u2019 and \u2018unsustainable\u2019. This marks a deterioration from the previous DSA, published in June 2024, largely because of growing fiscal pressures that have not been adequately addressed.\u201d<\/p>\n

It further states that public debt is in distress \u201cdue to debt service arrears, amounting to 1.3% of GDP as of December 2025\u201d.<\/p>\n

\u201cDebt is deemed to be unsustainable under current policies, since debt will continue to grow rapidly from already very high levels,\u201d the report warns, adding that the Government \u201chas increased its reliance on central bank financing and failed to repay principal owed to the central bank in 2024 and 2025\u201d.<\/p>\n

Financing from the Bank of Mozambique to the State, according to the report, reached \u201c6% of GDP in December 2025, up from 1.5% in December 2023\u201d.<\/p>\n

The report also notes that the issuance of domestic debt \u201chas been dominated by short-term instruments, with an average interest rate of around 12.6%\u201d. Although it represented about 29% of total public debt at the end of 2024, domestic debt accounted for around 76% of interest payments, the document adds.<\/p>\n

\u201cDomestic investors\u2019 appetite for Treasury bonds has declined due to increased perception of sovereign risk and delays in debt servicing. In 2025, Treasury bonds were issued mainly to refinance maturing securities,\u201d the World Bank explains.<\/p>\n

It also highlights the growing risk of domestic debt, which \u201cremains a central vulnerability, given its short maturity, concentration risks, and the fact that a large share of this debt was issued to finance recurrent expenditure at interest rates significantly above real GDP growth\u201d.<\/p>\n

The World Bank insists that \u201carrears and defaults in debt servicing are significant\u201d, that weak fiscal management has led to rising public debt, and that \u201cliquidity constraints are worsening, as evidenced by the Government\u2019s difficulties in issuing bonds in 2025 and the accumulation of arrears\u201d to suppliers and creditors.<\/p>\n

\u201cDomestic debt has increased sharply, with high costs and short maturities, creating repayment pressures as early as 2026,\u201d it adds.<\/p>\n

The Bank of Mozambique also warned again this week, for the second time this year, that domestic public debt \u201ccontinues to worsen\u201d, having risen to a stock exceeding \u20ac6,570 million.<\/p>\n

\u201cDomestic public debt continues to worsen, constraining the functioning of the financial market,\u201d the central bank warned in a statement following the meeting of its Monetary Policy Committee (CPMO), held on Monday in Maputo.<\/p>\n

In the same central bank statement, it was noted that domestic public debt, excluding loan and lease contracts and arrears, stood at 487,300 million meticais (\u20ac6,573 million), an increase of 12,300 million meticais (\u20ac166 million) compared with December 2025.<\/p>\n

\u201cDelays in the payment of domestic public debt by the State persist, affecting the weak demand for public securities and the rigidity of interest rates in the interbank money market,\u201d the CPMO said in its final communique\u0301, having already issued similar warnings at its previous meeting in January.<\/p>\n

Mozambique has faced significant economic challenges in recent years, particularly regarding its public debt management. The country’s reliance on external financing and domestic debt has led to increasing fiscal pressures, which have been compounded by weak economic growth and rising interest rates. Historical mismanagement and external shocks have further strained the economy, necessitating urgent reforms to stabilize public finances and restore investor confidence. The World Bank’s latest report underscores the critical need for Mozambique to implement effective fiscal policies to avert a deeper economic crisis.<\/p>\n

Find more news and analyses on Mozambique<\/span> on the Africa Press<\/span> website<\/p>\n","protected":false},"excerpt":{"rendered":"

What You Need to Know The World Bank has issued a stark warning regarding Mozambique’s public debt, labeling it as ‘unsustainable’ and highlighting significant arrears. The latest report indicates that public debt reached 91.4% of GDP by the end of 2024, with ongoing fiscal pressures exacerbating the situation. The Bank emphasizes the urgent need for […]<\/p>\n","protected":false},"author":84,"featured_media":98752,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2,5],"tags":[8437,8436,283,4025,422],"class_list":["post-98753","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-all-news","category-economy","tag-economic-update","tag-fiscal-reforms","tag-mozambique","tag-public-debt","tag-world-bank"],"yoast_head":"\nWorld Bank Flags \u2018Unsustainable\u2019 Public Debt - Mozambique<\/title>\n<meta name=\"description\" content=\"The World Bank warns Mozambique's public debt is unsustainable, with rising arrears and fiscal pressures highlighted in a new\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.africa-press.net\/mozambique\/all-news\/world-bank-flags-unsustainable-public-debt\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"World Bank Flags \u2018Unsustainable\u2019 Public Debt\" \/>\n<meta property=\"og:description\" content=\"The World Bank warns Mozambique's public debt is unsustainable, with rising arrears and fiscal pressures highlighted in a new\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.africa-press.net\/mozambique\/all-news\/world-bank-flags-unsustainable-public-debt\" \/>\n<meta property=\"og:site_name\" content=\"Mozambique\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/AfricaPressTunisiaa\" \/>\n<meta property=\"article:published_time\" content=\"2026-03-25T16:44:04+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2026-03-25T17:31:40+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/static.africa-press.net\/mozambique\/sites\/64\/2026\/03\/sm_1774459689.350284.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"720\" \/>\n\t<meta property=\"og:image:height\" content=\"505\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"cfeditoren\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"cfeditoren\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"4 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\/\/www.africa-press.net\/mozambique\/all-news\/world-bank-flags-unsustainable-public-debt#article\",\"isPartOf\":{\"@id\":\"https:\/\/www.africa-press.net\/mozambique\/all-news\/world-bank-flags-unsustainable-public-debt\"},\"author\":{\"name\":\"cfeditoren\",\"@id\":\"https:\/\/www.africa-press.net\/mozambique\/#\/schema\/person\/068c7ab4e9634ae78ec5d54ec46598bb\"},\"headline\":\"World Bank Flags \u2018Unsustainable\u2019 Public Debt\",\"datePublished\":\"2026-03-25T16:44:04+00:00\",\"dateModified\":\"2026-03-25T17:31:40+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\/\/www.africa-press.net\/mozambique\/all-news\/world-bank-flags-unsustainable-public-debt\"},\"wordCount\":731,\"commentCount\":0,\"image\":{\"@id\":\"https:\/\/www.africa-press.net\/mozambique\/all-news\/world-bank-flags-unsustainable-public-debt#primaryimage\"},\"thumbnailUrl\":\"https:\/\/static.africa-press.net\/mozambique\/sites\/64\/2026\/03\/sm_1774459689.350284.jpg\",\"keywords\":[\"economic update\",\"fiscal reforms\",\"Mozambique\",\"public debt\",\"World Bank\"],\"articleSection\":[\"all news\",\"economy\"],\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"CommentAction\",\"name\":\"Comment\",\"target\":[\"https:\/\/www.africa-press.net\/mozambique\/all-news\/world-bank-flags-unsustainable-public-debt#respond\"]}]},{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.africa-press.net\/mozambique\/all-news\/world-bank-flags-unsustainable-public-debt\",\"url\":\"https:\/\/www.africa-press.net\/mozambique\/all-news\/world-bank-flags-unsustainable-public-debt\",\"name\":\"World Bank Flags \u2018Unsustainable\u2019 Public Debt - 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