The Mozambican State has announced the issue of up to 227 million meticais in Treasury Bonds, starting on 19 August. This operation marks the first reopening of the ninth series of Treasury Bonds of 2024, initially launched on 6 August. The issue will be made through the Mozambique Stock Exchange (BVM) and is open to direct subscription by Specialised Operators.
The new issue carries a fixed nominal interest rate of 15.00% for the first four half-yearly payments, which will become variable for the last six payments. The Bonds have a maturity of five years, providing a long-term investment opportunity. In the previous issue, on 6 August, the Mozambican Government placed 125 million meticais in Treasury Bonds, with demand exceeding supply by more than five times, showing a high level of interest from investors.
However, the amount raised fell below the planned maximum of 238 million meticais. This increase in domestic debt issuance comes in a context in which Mozambique’s domestic public debt reached 364,251 million meticais by May 2024, representing 23.7% of GDP. The increase in domestic debt, accompanied by rising interest rates, is generating concerns about the country’s long-term financial sustainability.
The Ministry of Economy and Finance has warned of the risks associated with the rapid growth in domestic borrowing, which, if not kept under control, could undermine efforts to stabilise the Mozambican economy.
