GNV News – April 8, 2026

On March 27, 2026, it was revealed that Mozambique had fully repaid its debt to the International Monetary Fund (IMF), amounting to approximately 701.4 million US dollars. The debt to the IMF had been borrowed as assistance in response to the devastating cyclone that struck the country in 2019, the COVID-19 pandemic in 2020, and for economic recovery measures in 2022. Mozambique had originally planned to repay these debts by 2029, but this time it paid them off ahead of schedule in full.

For debtor countries, various problems with IMF lending have been pointed out. While Mozambique has now closed the chapter on 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 expenditure management are major issues in the country, hindering domestic development and delaying fiscal reconstruction.

A major factor behind the ongoing fiscal difficulties is the “hidden debt scandal” that came to light in 2016, exposing corruption in Mozambique. In this scandal, 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 the resulting economic crisis is estimated to have caused losses of 11–15 billion US dollars to the country.

In the aftermath of this scandal, not only Mozambique but African countries as a whole saw their credibility shaken, making it more difficult to receive loans from the IMF and other external sources, and raising the cost of repayment. As a result, African countries have been forced to cut spending on education and healthcare, which in turn has hindered domestic growth.

In contrast, the Mozambican government has expressed an optimistic outlook. It is counting on revenue from one of the world’s largest deposits of liquefied natural gas in the Rovuma Basin in the country’s north, but measures against corruption and transparency through sound 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?”

Ministry of Finance in the capital Maputo (2014) (Photo: Rick McCharles / Wikimedia Commons [CC BY 2.0])