The accumulated debt of the Mozambican State Enterprise Sector (SEE) fell by 1.5% in the second quarter, compared to the previous one, to 40.8 billion meticais, according to a government report.

In absolute terms, the accumulated value ('stock') of the debt of almost two dozen Mozambican public companies, or those in which the state has a stake, fell by 646 million meticais between March 31 and June 30, according to the Ministry of Economy and Finance's report on public debt.

"This variation is the result of both the stagnation in the stock of external direct debt and the slowdown in the stock of domestic direct debt by 2.75%," the report explains, adding that there was also "compliance with debt servicing" and the "adoption of the measure of contracting new financing only when it proves essential".

The report also points out that the total stock of public and guaranteed debt at the end of the second quarter of 2023 grew, in absolute terms, by 313.91 million dollars, to almost 15,706 million dollars at the end of June.

The Mozambican government has previously identified natural disasters, public debt above sustainability limits, inflation and the performance of the State Business Sector (SEE), namely three companies, as the main fiscal risks in 2024.

The Fiscal Risks Report (RRF), produced by the Ministry of Finance's Risk Management Department and reported last September by Lusa, states that the public debt ratio, including contingent liabilities, will fall from 109% of Gross Domestic Product (GDP) in 2021 to 82% in 2022, representing a reduction of 26.8 percentage points.

"However, the country still has debt ratios above the sustainability thresholds recommended for low-income countries," the report points out, with Mozambique's "main fiscal risks" for next year.

"Although the public debt/GDP ratio is decreasing, exchange and interest rates are the main fiscal risk factors for the increase in public debt service, which could compromise the primary balance," it reads.

Exposure to the ESS is another of the risks identified for 2024 by the RRF, which stresses, however, that this risk "improved considerably" in 2022, reflected in the reduction in the debt stock from 22% of GDP in 2021 to 4% of GDP. (Lusa)