Maputo — The Mozambican government announced on Tuesday that it will not be contracting any further domestic debt for the rest of this year.

Briefing reporters at the end of the weekly session of the Council of Ministers (Cabinet), the government spokesperson, Deputy Justice Minister Filimao Suaze, said domestic indebtedness has already reached 99.8 per cent of the figure forecast for the entire year, "and so there is no room for contracting any further domestic debt'.

Nonetheless, Suaze said that, despite "adverse factors', the internal macro-economic situation is stable, and the government will seek other ways to finance its operations.

But if it can no longer issue domestic debt (in the form of Treasury bills and bonds), the government will clearly have to rely on tax revenue to cover its expenditure (notably the public sector wage bill) until the end of the year.

The Bank of Mozambique has repeatedly warned against the government's reliance on sharp rises in public debt. That concern is shared by the International Monetary Fund (IMF), which warned that Mozambique's ratio of public debt to Gross Domestic Product could rise from 76.1 per cent in 2022 to 102.8 per cent in 2023, and reach 103.1 per cent in 2024.

Suaze presented a summary of implementation so far of the 2023 Economic and Social Plan and State Budget (PESOE). He said that, of the 117 indicators in the plan, 73.5 per cent had shown a positive performance (which means that over a quarter of the indicators showed negative performance).

The State had collected revenue so far this year of 146.7 billion meticais (about 2.3 billion dollars, at the current exchange rate), which is 41.1 per cent of the annual plan.

Public expenditure was about 196 billion meticais, or about 41.4 per cent of the annual target.