On October 1, the Bank of Mozambique (BdM) has raised concerns about the increasing pressure from the country’s domestic debt, which has surged by 90.3 billion meticais ($1.4 billion) this year, bringing the total to 402.7 billion meticais ($6.2 billion).
“Pressure on domestic public debt remains high,” the central bank stated, noting that this figure excludes loan and lease contracts as well as overdue liabilities. The BdM issued this warning in a report following the ordinary meeting of the Monetary Policy Committee (CPMO) on September 30. Despite the growing debt, the bank noted that international reserves remain at healthy levels, sufficient to cover over five months of imports of goods and services.
Last week, the Mozambique Stock Exchange (BVM) reported that the country successfully issued 609 million meticais ($9.4 million) in Treasury Bonds, maturing in five years. The issuance took place on September 24, with specialized operators in Treasury Bonds submitting proposals. The offer-to-demand ratio reached 22.51%, with total proposals amounting to 1.2 billion meticais.
This issuance represents the 10th series of Treasury Bonds for 2024, targeted at direct subscription by specialized operators, with an authorized ceiling of up to 5.3 billion meticais. The nominal interest rate is fixed at 15% for the first four semi-annual payments, transitioning to a variable rate for the remaining six payments.
As of May 28, the domestic debt represented 23.7% of the national GDP, primarily composed of Treasury Bills, with a stock of 99.8 billion meticais, Treasury Bonds at 169 billion meticais, and 95.3 billion meticais in advances from the Bank of Mozambique.