The gas-rich south-eastern African country is in talks with the IMF on a new facility to stabilize the economy, curb its reliance on natural resources and restore investor confidence, Chapo said in a Bloomberg Television interview. He said a deal could follow a regular IMF mission in March. “What we want at this moment is to conclude the agreement with the IMF and then move on to the aspect you are mentioning, namely the renegotiation of the debt with international partners,” Chapo said.
“We want to establish trust first.” Asked if any debt talks would include changes to the terms of Mozambique’s $900 million bond due 2031, Chapo replied: “Not at the moment. We will consider all of this after closing this package, which I call the package for stimulating the country’s macroeconomic situation.” The bond currently trades with a yield of around 14%, suggesting some traders think it will be restructured. Mozambique’s last IMF program effectively ended in early 2025, when the government opted not to proceed with the remaining reviews under its three-year Extended Credit Facility.
China holds about 14% of Mozambique’s external public debt, which totalled around $9.8 billion at the end of 2024. Mozambique’s economy grew by 1.1% last year, according to the World Bank — an estimate that may prove optimistic given that output shrank for the first three quarters of 2025. The lender sees growth in 2026 at 2.8%, it said this week.
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Last year, the government hired New York-based Alvarez & Marsal to advise it on debt restructuring. The IMF in November warned of Mozambique’s “acute” financing challenges, and called for urgent fiscal consolidation and greater exchange rate flexibility. The metical has hardly moved against the dollar since mid-2021, and there was a reported foreign-exchange backlog exceeding $700 million by October, according to S&P Global.
Allowing for currency depreciation could fan inflation for the economy that relies on imports for goods from fuel to food, raising risks to a fragile social situation since deadly post-election protests subsided about a year ago. The 49-year-old Chapo said Mozambique’s economy is set to improve after the country exited the Financial Action Task Force’s so-called grey list last year, along with decisions by TotalEnergies SE and Exxon Mobil Corp. to restart liquefied natural gas projects. The developments will only start contributing significantly to the state’s coffers in the next decade.
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