IMF urges Mozambique to implement fiscal reforms as debt risks mount

The International Monetary Fund issued a warning today, February 17, 2026, that Mozambique MZ must implement ambitious fiscal consolidation to address worsening debt dynamics, delays in debt servicing, and limited external financing. Following its annual review, the fund emphasized that rising interest payments are threatening to widen fiscal deficits and undermine debt sustainability, creating immediate financing concerns for the national economy.

The fiscal pressure is exacerbated by the fact that Domestic banks (Mozambique), which act as the primary buyers of government debt, have reached their lending limits. Furthermore, net external financing has turned negative, leaving the Government of Mozambique with significantly constrained options for funding. These conditions have placed a heavy burden on the Ministry of Finance (Mozambique) and the Bank of Mozambique as they attempt to manage the country's fiscal trajectory.