Mozambique plans to spend 35 billion meticais (US$577.15 million) servicing public debt next year, 3.4% of gross domestic product (GDP), and more the state budget allocation for health, which in 2019, will  receive 27.9 billion meticais. Servicing domestic and foreign debt will consume an unprecedented 15% of all the revenue that the state expects to collect. “Debt service is expected to reach around 35 billion meticais in 2019, which represents 3.4% of GDP, an increase of 0.1 percentage point when compared to 2018” notes the Draft State Budget document of justification that the Executive has submitted for scrutiny in the Assembly of the Republic, and which does not include the resumption of commercial debt or illegal debt repayments, negotiations on which are not yet concluded. The document, which A Verdade has seen, also notes that “of the amount predicted, 24 billion meticais are for the payment of domestic interest rates and 11 billion meticais for external, equivalent to 2.4% and 1.1 % of GDP respectively”.

The largest portion of this figure, US$4.5 billion, corresponds to bilateral debt with China, Portugal, France, Brazil, Japan, Russia, India, Iraq, Libya, South Korea, Denmark, Kuwait , Angola, Saudi Arabia, Bulgaria, Poland, Romania, Yugoslavia, Belgium, Austria and Spain. Public debt service is ten times the amount allocated for social protection in Mozambique This is followed by multilateral debts amounting to US$4.1 billion in 2017, to institutions such as the World Bank,  International Fund for Agricultural Development (IFAD)  the African Development Bank (AfDB), the OPEC Fund, the Arab Bank for Economic Development in Africa (BADEA), the Inter-American Development Bank (IDB), Nordic Development Fund (NDF) and the Development Bank of Southern Africa (DBSA). Mozambique’s third-largest debt category comprises sovereign guarantees issued in favour of Proindicus, EMATUM, MAM, EDM, the Road Fund and other state-owned companies.

Domestic public debt has also grown exponentially and closed the year 2017 at more than US$1.8 billion. Public debt servicing costs, which at the end of 2017 amounted to US$12.7 billion, represent almost ten times more than the allocation for all social protection programmes in Mozambique, which in 2019 will receive only 3.9 billion meticais.

Public debt service in fact exceeds the allocation for the entire health sector (27.9 billion meticais) and agriculture and rural development (29.1 billion meticais). - A Verdade