Mozambique: Central bank credit to the State rises 52% in six months

According to the central bank’s accounts for the first half of this year, loans and advances to the government rose from 137.7479 billion meticais (€1.860 billion) at the end of 2025 to 209.500 billion meticais (€2.828 billion) at the end of June 2026, up 71.7455 billion meticais (€968 million), or 52%, over the six-month period. According to the explanatory notes, the total includes advances granted under Article 18 of the Bank of Mozambique’s Organic Law, which provides that the central bank “may annually grant the State interest-free credit in the form of a current account denominated in national currency”, up to a limit of 10% of ordinary State Budget revenue collected in the penultimate fiscal year. However, the credit “must be repaid by the last day of the financial year in which it was granted”.

Failing that, the outstanding balance becomes subject to interest at the central bank’s rediscount rate. Of the total 209.500 billion meticais (€2.828 billion) in loans and advances to the State, 145.4359 billion meticais (€1.963 billion) relates to financing granted under that legal mechanism, while 64.0575 billion meticais (€865 million) relates to other loans and advances to the State. The accounts for the first half of 2026 also show that, at the end of June, loans and advances to the government accounted for around 92.6% of the central bank’s other financial assets, which totalled 226.245 billion meticais (€3.055 billion).

In addition to this direct exposure to the State, the central bank’s portfolio of financial assets measured at amortised cost totalled 426.3398 billion meticais (€5.757 billion) at the end of June and consisted mainly of Treasury Bills and other government securities. The two exposures combined – loans to the government and holdings of government securities – totalled 635.833 billion meticais (€8.585 billion) at the end of the first half. The central bank also held 159.245 billion meticais (€2.149 billion) in special-issue Treasury Bills, which, according to the report, “were issued by the State in favour of the Bank of Mozambique” under the Organic Law.

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The explanatory notes add that, since 2008, these securities have had a one-year maturity, automatic renewal and an annual interest rate of 5.3%. On the liabilities side, the item ‘Treasury Bills issued in the name of the State and other monetary instruments’ totalled 497.2315 billion meticais (€6.714 billion), down from 530.9388 billion meticais (€7.169 billion) recorded at the end of 2025. Within that category, Treasury Bills used for monetary policy operations amounted to 185.9675 billion meticais (€2.513 billion), while 164.4572 billion meticais (€2.222 billion) was linked to State financing.

The Bank of Mozambique’s total assets reached 992.7317 billion meticais (€13.4 billion) at the end of June, approaching the one trillion meticais mark. During the same period, the central bank posted a net profit of 4.1862 billion meticais (€56.5 million), after recording a loss of 5.869 billion meticais (€79.1 million) in the first half of 2025. The return to profit was driven mainly by gains from foreign exchange and gold operations.

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