Interest charges on Mozambique's debt grew 12% in 2024, compared to the previous year, to 57.608 billion meticais (857.4 million euros), according to official data to which Lusa had access today.
According to the same data, this amount compares with the 49,929 million meticais (743 million euros) that the State spent on the so-called debt burden in 2023. The interest payment component of the domestic debt alone grew 13% in 2024, to more than 45,691 million meticais (680 million euros), while on interest on the external debt the State spent almost 11,395 million meticais (177.6 million euros), up 9.5% in the space of a year.
Lusa reported this week that Mozambique's public debt stock exceeded one trillion meticais (15.8 billion euros) in 2024, an increase of 9% in one year.
According to information on budget execution, the Mozambican state's debt grew from January to December to almost 1.069 billion (million million) meticais.
The domestic debt stock alone reached more than 407,085 million meticais (6,139 million euros) on December 31, while the external debt stock exceeded 636,548 million meticais (9,600 million euros).
According to the document, external debt registered an increase of 1.4% in 2024, "mainly due to the adjustment of data associated with the migration to the new debt management system", known as "MERIDIAN".
"On the other hand, domestic debt increased by 21.8%, mainly due to the issuance of short-term debt through Treasury Bills, worth 46,162.9 million meticais [696.2 million euros], and within the scope of the Credit Facility with the central bank, worth 28,100 million meticais [423.8 million euros]", reads the document.
The Mozambican Ministry of Economy and Finance's 2023 public debt report warned in April last year about the pace of growth in domestic debt, which, if maintained, threatens the process of reversing its unsustainability.
"If domestic debt continues to grow at the current rate over the next five years, the distribution of the 'stock' could balance out at 50% domestic/50% foreign by 2029, with a portfolio dominated by purely commercial instruments, a scenario that would compromise the possibilities of reversing the debt's unsustainability in this generation," the document said.
As interest rates on Treasury Bills (BT, short maturities) and Treasury Operations (OT, longer maturities) "have increased, the cost of domestic financing has driven a continuous upward adjustment in the weighted average interest rate on the government's loan portfolio."
The rate went from "5% in 2021 to 5.8% in 2022 and now 6.5% in 2023, totaling a cumulative increase of 150 basis points in two years", says the report, which also warns that the "refinancing risk, reflected in the growing concentration of maturities" of public debt "in the short term, represents the greatest vulnerability".
No comments:
Post a Comment