The International Monetary Fund plans to send a mission to Mozambique in June to move forward with talks on a potential new loan programme, an IMF spokesperson said. The visit is intended to build on constructive exchanges held during the Spring Meetings, where the parties discussed the economic impact of the Middle East war and options for Fund support going forward.
The IMF representative said discussions will continue in the months ahead as both sides work through the details. Mozambique is confronting significant fiscal and financial strains, reflected in sharply widened sovereign spreads and a shrinking economy.
Market indicators point to acute investor concern: according to JPMorgan data, Mozambique’s sovereign bond spread over U.S. Treasuries stood at a distressed 1,185 basis points. Official and multilateral data indicate the economy contracted by an estimated 0.5% in 2025, based on central bank and IMF figures, and public debt was estimated by the Fund at 91% of GDP in February.
Policy makers have taken steps to address the debt situation. In October, the government authorised hiring consulting firm Alvarez & Marsal to advise on its debt, a move tied to efforts to restore market confidence and manage liabilities. Mozambique’s debt difficulties trace back to a hidden-debt scandal in 2016 that undermined investor trust and restricted access to external funding.
Compounding budgetary pressure, delays to major gas projects that had been expected to expand exports and government revenue have worsened the fiscal outlook. Domestic financing from the central bank has also risen sharply: official data show central bank loans to the government jumped 176.1% to 49.6 billion meticais.
Mozambique’s previous IMF support programme ended early in April 2025. Negotiations on a successor arrangement remain contingent on the authorities implementing substantial policy reforms. The IMF spokesperson outlined key priorities for a new agreement, stating that swift fiscal consolidation - while protecting vulnerable populations - and greater exchange rate flexibility are needed to ease financial pressures and restore stability.
"Structural reforms to improve governance and foster private sector-led growth are also needed urgently," the IMF spokesperson said.
The exchange rate cited in official communications is $1 = 63.3000 meticais.
As talks continue, the IMF mission scheduled for June will be a focal point for clarifying the conditionality and sequencing of reforms required to underpin any new programme. The discussions will test the authorities' ability to balance consolidation with social protection and to pursue governance measures that encourage private investment and reduce reliance on central bank financing.