There is “nothing to stop” Mozambique’s new government seeking to negotiate with external creditors, though the finance minister’s recent comments about debt restructuring were primarily focused on domestic debt, her spokesman told Zitamar News on Monday.
Carla Louveira, the new head of Mozambique’s Ministry of Finance which has been split off from the Ministry of Economy by incoming president Daniel Chapo, told reporters after taking office on Saturday that “deep work to restructure our debt” was needed, in order to be able to honour debt repayments and meet the needs of the state budget. Louveira reported that the government lost MZN14bn ($221m) in revenue due to demonstrations sparked by the disputed election results in December alone, and that there was a revenue shortfall of MZN42bn over the whole year.
Mozambique’s dollar-denominated bonds fell in value on international markets after her comments were reported, according to Bloomberg and Reuters, who said it fell more than 2 cents to 81.5 cents on the dollar on Saturday. Those so-called eurobonds, which represent the only commercial debt that Mozambique has ever issued internationally, are themselves the result of two restructures of bonds issued by state-owned tuna fishing company Ematum in 2013. The finance minister who signed the state guarantees on those bonds, Manuel Chang, was last week sentenced to eight-and-a-half years in jail in the US over his role in the corruption surrounding the deal.
Louveira’s spokesman told Zitamar on Monday that “the principal focus” of the minister’s desire to restructure was domestic debt, which stood at MZN396bn ($6.2bn) in September 2024, according to the latest figures from the finance ministry. But, he added, “there is nothing to stop negotiations on the foreign debt as well.”
In 2023, the interest Mozambique pays on its eurobonds went up from from 5% to 9% per year, raising the interest to be paid on the $900m principal from $45m a year to $81m. In 2028, Mozambique will also start repaying $250m per year of the principal.