Mozambique has initiated talks with China to restructure its $1.4 billion debt, amid mounting financial pressures and a fragile political climate. President Daniel Chapo confirmed the move during an international development finance conference in Seville, Spain, citing the need to ease fiscal burdens and ensure debt sustainability.
President Chapo noted that China is Mozambique’s largest bilateral creditor and emphasized that rescheduling or even cancellation of the debt is not an unrealistic prospect. He added that discussions would be held on a partnership basis and reaffirmed his country’s commitment to honoring international obligations.
Mozambique’s total external public debt reached $9.8 billion by the end of 2024, with Chinese loans accounting for 14 percent of that amount. The debt service costs have placed significant strain on public finances, prompting the government to pursue support from strategic partners.
President Chapo also revealed that his administration is in talks with the International Monetary Fund (IMF) to establish a new financial support program. He explained that Mozambique had exited a previous IMF agreement, which was incompatible with the new government’s policies, but expressed hope for a new deal in the coming months.
Mozambique may soon join other African nations such as Ghana, Zambia, and Ethiopia, which have all sought debt restructuring in recent years due to rising borrowing costs and budget constraints. Analysts say the move could have both economic and geopolitical implications, as China’s lending and influence in Africa continue to draw global attention.