Mozambique Seeks Debt Relief After China Deal

Mozambique announced on Wednesday that it will pursue additional debt relief negotiations after securing a debt rescheduling agreement with China earlier in the week.

The finance ministry aims to ease immediate pressure on public finances without resorting to a full debt overhaul.

Outlining the government’s approach, the ministry stated: “Mozambique is prioritising negotiated solutions aimed at improving the repayment profile and reducing pressure on government finances, while seeking, as far as possible, to avoid a comprehensive debt restructuring.”

The government plans to meet with bilateral creditors to convert debt into direct investments.

China remains Mozambique’s largest bilateral creditor, holding about $1.28 billion—nearly 15 per cent of the country’s total external debt—as of late June.

Although authorities disclosed Monday’s agreement allowing adjusted payment schedules, they did not reveal the exact amount of debt covered.

Economic pressure on the Southern African nation stems from a 2016 hidden-debt scandal that disrupted investor confidence, alongside delays to major natural gas projects intended to generate export revenue.

To stabilise its fiscal outlook, the finance ministry confirmed Wednesday that Mozambique requires an additional $528 million in external funding to complement a prospective International Monetary Fund programme.

Following the announcement, Mozambique’s international bonds rose slightly by 0.3 cents to trade at 91.614 cents on the dollar, according to Tradeweb data.