Full payment of debt to IMF is aimed at restoring Mozambique’s credibility

Maputo, 6 May (AIM) – Mozambican Minister of Finance, Carla Louveira, has announced that the government’s early full payment of the outstanding debt of 515.04 million Special Drawing Rights (equivalent to 630.1 million US dollars) to the International Monetary Fund (IMF) is aimed at restoring the country’s credibility in the international market.

According to the minister, who was answering questions on Wednesday from deputies in the country’s parliament, the Assembly of the Republic, the fact that Mozambique is no longer in arrears to the IMF may help the government’s efforts to obtain further loans from the Fund.

“By settling this obligation ahead of schedule, the country demonstrates a capacity for prudent management of its external commitments, reinforcing its reputation as a credible partner in the international financial system. This decision sends a clear message to the markets and means that Mozambique honors its commitments”, she said.

“The country is committed to restoring confidence in a global context that is increasingly demanding in terms of transparency and debt sustainability”, she added.

The minister believes that the country’s repayment of debt to the IMF must be regarded as a sign of strengthening the external position and greater autonomy in conducting economic policy, “which tends to improve the sovereign risk profile.”

The country’s outstanding debt stood at 515.04 SDRs, but fell to zero by the end of March. Mozambique is the only country in this situation among 85 countries listed.

“The payment was completed on March 23, settling the advances under the Rapid Credit Facility agreed in 2019, the Rapid Credit Facility agreed in 2020, and the Extended Credit Facility agreed in 2022. The government used Net International Reserves (NIR), assets in foreign currency used to pay for imports”, she said.

This decision, she explained, is part of a broader strategy of macroeconomic normalization to strengthen institutional confidence “at a time when markets value consistent signs of commitment to structural reforms.”

“This was a strategic economic policy instrument, with a direct impact on external credibility, investment attraction, and the consolidation of macroeconomic stability”, the minister said.

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