The International Monetary Fund (IMF) estimates that Mozambique's debt to international creditors will reach 133.6% of Gross Domestic Product (GDP) this year, and with that, it becomes the country with the third highest debt-to-GDP ratio in Sub-Saharan Africa.

According to sources advancing the information citing Bloomberg, Mozambique has waived the restructuring of its only $900 million Eurobond, despite delays to the start of liquefied natural gas exploration.

To a question from Bloomberg, the Ministry of Economy and Finance assured that "the macro-fiscal assumptions that underpinned the renegotiation of the Eurobonds with the creditor committee remain unchanged."

"There is no reason to anticipate the scenario" of having to restructure the dollar bonds, which have already undergone two restructurings since 2016," he concluded.

Due to armed violence in Cabo Delgado province in April, TotalEnergies suspended work on the $20 billion project, Africa's largest private investment to date.

In March 2024 the Eurobond coupons will rise from the current 5% to 9%, in line with a restructuring of Total starting natural gas production that same year.

Still, Mozambique's debt continues to grow. The Government projects the budget deficit at 13.5% of GDP next year, an increase of 4.4 percentage points over this year's target. Although the largest source of funding will come from grants, the Government also plans to solicit $183 million in the foreign market and 53.1 million meticais from domestic lenders, according to the Ministry.

As to whether the country is considering borrowing from the IMF, the Finance Ministry has not responded, sources said.