The International Monetary Fund (IMF) has publicly addressed the challenging financial situation facing Mozambique, noting the increasing difficulties in securing financing. The Executive Board of the IMF expressed that the Mozambican government's vulnerability stems from both domestic and foreign debt, which is exacerbated by delays in servicing these debts. As a result, the reliance on government bonds held by national banks has stalled, leading to negative net external financing. This scenario places the country in a precarious financial state as it navigates through its fiscal deficits.

During a recent visit by an IMF team to Mozambique, it was reported that despite the stringent funding conditions, there is a forecasted decrease in the fiscal deficit for 2025, predicting a reduction to 4.5% of the Gross Domestic Product (GDP). This marks an improvement from the expected 6.2% for 2024. The anticipated decrease in fiscal deficits is attributed to a significant cut in government expenditure on goods, services, and capital projects. However, primary fiscal deficits are projected to stay around 2% of GDP, indicating that while there may be temporary relief, long-term fiscal challenges persist for the government.

The implications of these findings suggest that Mozambique must reassess its financial strategies to improve its sustainability and address the underlying issues related to debt management. The lack of new loans from the IMF may prompt the country to explore alternative financing options and policies that can foster economic stability and growth, while simultaneously meeting the weighty demands of debt repayment and fiscal responsibility.