As Mozambique began to suffer financing constraints in the international market and cut off support from programmatic partners as part of the hidden debt findings, domestic debt began to grow sharply. Over the period 2016 to 2021, the internal debt increased from MZN 87,709.6 million to MZN 227,451.8 million, representing a growth of 159.3%. The growth in internal debt results from a greater issuance of Treasury Bills (TBi) and Treasury Bonds (TBo), which reached a growth of 390.1% and 378.5% respectively.
The biggest problem in the growth of domestic debt has to do with the accumulation of outstanding balances, resulting from the difference between disbursements (receivable) and repayments (payable). By the end of 2021, these balances totalled about MZN 131,653.5 million, corresponding to 57.9% of the stock of domestic debt.
The accumulation of these balances constitutes a risk to the sustainability and management of public debt insofar as these balances could force the government to: (1) accumulate large sums of money to meet the concentration of repayments; and/or (2) contract new debt to meet debt repayments; and/or (3) issue new debt (TBi and TBo) to substitute maturing debt.
