Mozambique's domestic debt doubled from 2020 to July 2024, to almost 400 billion meticais, according to financial rating agency S&P Global Ratings, which cites data from the Central Bank.

The agency points out that on January 1, 2020 the debt stood at 187.2 billion meticais; on January 1, 2021 it was 218.8 billion meticais; on January 1, 2022 it was 275.1 billion meticais, on January 1, 2023 it grew to 312.3 billion meticais; and on July 1 it was set at 377.9 billion meticais.

This growth in domestic debt is justified by the fact that the country had recourse to the national currency to cover the unanticipated budget deficit. But also fact of not having obtained financing in foreign currency since 2016.

In the same vein, the implementation of the Single Wage Scale (TSU), to simplify the payroll in an attempt to reduce the overload. "It had the opposite effect, prompting warnings from the IMF"

"Mozambique has already delayed payments on some debts since the beginning of last year, and the rating agency assesses the government's credit position as CCC+ - deeply in bad territory - for bonds in local and foreign currency," reads the publication of the Bloomberg.

On the other hand, the International Monetary Fund (IMF) forecasts that total domestic public debt will rise to 97.5% of gross domestic product this year.

This is one of the highest rates in the region and effectively prevents the government from taking on foreign debt without concessional under its program with the Washington-based lender. For every dollar the government collects in taxes, 20 cents goes to servicing the debt, according to the IMF, writes the source.

The government is also facing increasing spending pressures as the October 9th general elections draw closer.