Trending 
The International Monetary Fund (IMF) has announced plans to dispatch a delegation to Mozambique in June to negotiate a new financial support programme.
This move comes as the Southern African nation grapples with a contracting economy, which shrank by 0.5% in 2025, and a debt-to-GDP ratio reaching a staggering 91%.
During recent spring meetings, IMF officials held productive discussions with Mozambican authorities regarding the economic fallout from the Middle East war and the urgent need for a framework to restore fiscal stability.
Mozambique’s financial situation has reached critical levels, with its sovereign debt currently trading at a distressed 1,185 basis points over U.S. Treasuries.
The country’s economic struggles are compounded by the legacy of a 2016 hidden-debt scandal and significant delays in major liquefied natural gas projects that were intended to bolster state revenue.
To address these challenges, the government recently enlisted the consulting firm Alvarez & Marsal to provide strategic advice on debt management as central bank lending to the state continues to surge.
A successful agreement with the IMF will depend on the government’s commitment to substantial structural reforms.
The Fund has emphasised the necessity of swift fiscal consolidation and increased exchange rate flexibility to ease financial pressures while protecting vulnerable populations.
Furthermore, the IMF is calling for urgent improvements in governance and reforms designed to encourage growth driven by the private sector, aimed at restoring investor confidence and stabilising the national economy.
