Sunday, February 9, 2025

Mozambique: Protests, LNG Delays Push Debt Crisis to Breaking Point

Mozambique’s financial crisis is escalating as the country’s debt restructuring looms, raising concerns for its 35 million citizens. The government’s struggle to stabilize its economy is compounded by political unrest and delayed gas projects.

Mozambique’s public debt fell slightly to 93.7% of GDP in 2023, down from 100.3% the year before. However, the International Monetary Fund (IMF) still classifies the nation as being at high risk of debt distress. External debt-to-GDP improved marginally to 66.2%, but delays in liquefied natural gas (LNG) development have hampered efforts to reduce external debt servicing costs.

New Finance Minister Carla Louveira disclosed that the government lost 42 billion metical ($664 million) in revenue during October’s violent protests over disputed presidential election results. “The government has no choice but to restructure domestic and foreign debts to stabilize finances,” Louveira told Bloomberg.

Political Turmoil Hits State Revenues

October’s protests, which left over 300 people dead, erupted after opposition leader Venancio Mondlane accused the ruling Frelimo party of electoral fraud. Despite President Daniel Chapo’s recent inauguration and his pledge to restore stability, Mondlane has urged supporters to continue demonstrations.

READ MORE: Motivation and Not Manipulation: A Necessity for Effective People Management Strategy

The unrest has not only disrupted Mozambique’s economy but also delayed critical infrastructure projects. The government faces mounting pressure to clear external debt arrears, which totaled $1.2 billion by the end of 2023, according to IMF data.

Chapo’s administration must balance fiscal discipline with improving welfare and ensuring political stability.

Gas Projects Delayed, Hope Deferred

Mozambique’s vast gas fields, potentially worth billions in export revenue, remain underdeveloped due to an ongoing Islamist insurgency in the north. The delays mean the government must wait longer to benefit from LNG exports that could alleviate debt servicing pressures.

Hot this week

UN Commits $2.5 Billion to Fight Hunger and Malnutrition in Nigeria

The United Nations World Food Programme (WFP) has announced...

Lagos Bolt Drivers Protest 50% Fare Cut, Call Move “Unfair”

Drivers using the ride-hailing platform Bolt are planning a...

FG Approves ₦4.8bn for HIV Treatment, Protect Nigerians from Trump-Era Healthcare Cuts

The Nigerian government has approved ₦4.8 billion to ensure...

Aging Infrastructure Drives NPA’s 15% Hike in Port Charges

Nigeria’s maritime industry is set for a shift as...

Electricity Bills to Soar as FG Plans to Cut Subsidies, Consumers Kick

Nigerians are set to face a steep rise in...

Proposed 31 New States Could Add Strain to Nigeria’s Fragile Economy – Mike Ozekhome

The Nigerian House of Representatives' proposal to create 31...

Sam Nujoma, Namibia’s Founding Father, Dies at 95

Sam Nujoma, Namibia’s Founding Father, Dies at 95 Namibia is...

Tinubu’s Authority Challenged as GAC Backs Obasa’s Removal in Lagos

President Bola Tinubu’s long-standing dominance over Lagos politics is...

Trump Freezes Aid to South Africa Over Land Seizure Law

In a dramatic policy shift, President Donald Trump has...

Energy Independence: How Dangote Group Generates 1,540 MW for Its Operations

The Dangote Group, led by billionaire industrialist Aliko Dangote,...

Aging Infrastructure Drives NPA’s 15% Hike in Port Charges

Nigeria’s maritime industry is set for a shift as...

We Will Not Be Bullied’: Ramaphosa Responds to U.S. Criticism on Land Reform

South African President Cyril Ramaphosa has vowed that his...

Related Articles

Popular Categories