Good afternoon. Mozambique needs more affordable, long-term credit. Commercial interest rates put investment beyond the reach of many businesses, banks prefer lending to the government and agriculture receives little of the finance required to become more productive. A development bank could help address that failure.
The government’s proposed method of financing it nevertheless demands scrutiny. The state intends to allocate $100m - approximately MZN6.4bn - to the Development Bank of Mozambique every year for five years. Those contributions would provide the bank’s entire stated capital of MZN32bn, or about $500m.
That is a substantial new claim on a budget already struggling to pay suppliers, service public debt and maintain essential services. Revenue reached only 95% of the government’s target during the first half of this year. Public-sector salaries and debt payments are expected to consume almost all tax revenue in 2027. Every metical transferred to the bank must therefore come from additional revenue, reduced spending elsewhere or more borrowing.
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President Daniel Chapo has said that income from the extractive sector will help finance the institution. Unless particular revenues are legally reserved for it, however, “mining-funded” and “budget-funded” describe the same money in different ways. Mining taxes and royalties enter the Treasury and already have competing uses, from public services and infrastructure to transfers for producing communities and the Sovereign Wealth Fund. Assigning them to the bank does not remove the cost; it decides which other demand will go unmet.
The proposed involvement of the National Social Security Institute raises a separate concern. Technical coordinator João Macaringue has said that INSS will not be a shareholder in the bank, but that deposits from the institute will be subject to a ceiling of 25% of its investment portfolio. His explanation also appeared to describe such deposits as compulsory. The government should clarify the precise requirement, along with the interest, maturity, withdrawal conditions and guarantees attached to the money.
