The domestic debt capacity is exhausted, having reached 99.8% of its capacity, the spokesman for the Council of Ministers, Filimão Suazi, said recently (08.08.2023) after the 28th Session of the Executive.

At the time, he said that in order to meet the country's financial needs, the government would resort to the usual strategies, namely raising revenue.

However, the Center for Public Integrity (CIP) believes that there are alternatives to meet the need for finances in the next six months: external financing; an amending budget; the use of revenues from gas exports - which are around 40 million dollars, about "1.4% of annual spending on wages and salaries" -; reducing spending and increasing revenues; access to more donations; or refinancing the domestic debt.

According to the non-governmental organization (NGO), the incapacity for domestic debt is essentially due to spending above the legal limit and inefficiency in domestic debt management.

"Operating expenditure, which includes salaries and wages and expenditure on the purchase of goods and services, in addition to showing an upward trend of around 56% from 2018 to 2022 (from 184 billion to 285 billion MT), also shows levels of deviation between what is foreseen in the budget law and what is executed," writes the NGO.

With regard to management, the CIP says that the government's strategy has been to take on debt in order to pay off debt, which is "a fiscal risk due to its unsustainability in the medium term".

"The composition of the debt shows that short-term debt levels had an upward trend in 2023. After reaching around 69.87 billion MT in December 2022, in the first half of 2023 this increased to 74.42 billion MT," indicated CIP.