Mozambique Fully Repays Debt to the IMF

by | 8 April 2026 | Other

GNV News, April 8, 2026

It was revealed that on March 27, 2026, Mozambique fully repaid its debt to the International Monetary Fund (IMF), amounting to the equivalent of about 701.4 million US dollars. The debt to the IMF had been borrowed in connection with the cyclone that caused massive damage in the country in 2019, the outbreak of COVID-19 in 2020, and the support borrowed in 2022 aimed at economic recovery. Mozambique had been scheduled to repay these liabilities over time until 2029, but this time the country paid everything off early.

For debtor countries, various issues with IMF lending have been pointed out. While Mozambique has now drawn a line under its IMF debt, its domestic debt has increased significantly and continues to put pressure on the country’s public finances. Lack of employment, poverty, and poor management of expenditures are major problems in the country, hindering domestic development and delaying fiscal reconstruction.

In 2016, the “hidden debt scandal,” a major factor behind the ongoing fiscal difficulties, came to light and exposed corruption involving the Mozambican government. In this case, a foreign shipbuilding company paid bribes to both foreign banks and the Mozambican government, secretly encouraging the government to borrow from banks and pushing it to purchase unnecessary coastal defense equipment and fishing vessels. Mozambique borrowed 2 billion US dollars at the time, but it is estimated that the economic crisis triggered by this scandal caused the country losses of between 11 and 15 billion US dollars.

Following this scandal, the credibility not only of Mozambique but of African countries as a whole was shaken, making it more difficult to obtain loans from the IMF and other foreign sources and driving up the cost of repayment. As a result, African countries have been forced to cut spending on education and healthcare, which in turn is hindering domestic growth.

By contrast, the Mozambican government is taking an optimistic view. It is expecting revenue from one of the world’s largest deposits of liquefied natural gas located in the Rovuma Basin in the north of the country, but tackling corruption and ensuring transparency through proper management of public finances will be indispensable for future growth.

Learn more about Mozambique → “A Crisis of Democracy?: Mozambique’s 2023 Local Elections”
Learn more about the IMF → “The World Bank and the International Monetary Fund: Fueling Poverty?”