Maputo, Sept. 26, 2025 (Lusa) - The Mozambican government estimates a fiscal deficit of over 6% of Gross Domestic Product (GDP) by 2026, with priorities including "controlling the payroll" and "stabilising the state's debt burden."
"Ensuring a balance between the importance of consolidating public accounts in order to stabilise debt indicators, freeing up budgetary space to meet productive investment needs. But also, this consolidation effort must not neglect the need to create conditions from the point of view of allocating resources for investment, to allow the economy to continue to grow," the Secretary of State for the Treasury and Budget said on Friday.
Amílcar Tivane presented the prospects of the proposed Economic and Social Plan and State Budget (PESOE) for 2026 to the partners at the Central Development Observatory in Maputo, recognising that international shocks and geopolitics condition Mozambique's forecasts.
"In order to meet these challenges, we will continue to work on rationalising expenditure, and two cornerstones of this process are controlling the payroll and stabilising debt burdens," he explained, while also recognising that expenditure represents a "critical area" of next year's PESOE.
"For 2026 we have planned a budget with expenditure of around 32% of GDP, state revenues of around 28% of GDP and a fiscal deficit of around 6% of GDP," said the Secretary of State, guaranteeing that donations, domestic and foreign debt will finance the difference, but with "greater restraint, to minimise risk".
For this year, the government previously forecast a deficit of 5.6% of GDP.
In today's speech, Amílcar Tivane also explained that the budgetary policy objectives for 2026 "will continue to revolve around the need to strengthen fiscal credibility and transparency", as well as "implementing or accelerating a series of reforms to boost revenue collection"
"And here we are considering the revision of the IRPC and IRPS [corporate and personal income tax] codes, the tax benefits code, the revision of which is already underway, and also the taxation of income in the digital space," he pointed out.
As far as public debt management is concerned, he said, the strategy will "continue to favour portfolio management", through "passive management operations, debt swaps and, at the limit, reducing the volume of public debt financing", to "create conditions for the country's risk premium indicators to improve".
On the other hand, he stressed the need to generate primary surpluses to ensure that public debt stabilises, allowing for a "fiscal framework with sufficient flexibility to meet spending pressures, arising not only from the need to cushion external shocks, but also social spending, productive investment, as well as administrative challenges".
The net financing of Mozambican state spending with short-maturity Treasury Bills totalled 17.7 billion meticais (€238.1 million) by June, bringing the total indebtedness to €14.4 billion.
According to the Ministry of Finance's budget execution figures for January to June, Treasury Bills totalling almost 134,064 million meticais (€1.801 billion) were issued.
'The growth in domestic debt is justified by the poor performance of revenue and the lack of disbursements of external resources (donations and credits), forcing the government to resort to issuing Treasury Bills and other short-term loans to finance the Treasury deficit to ensure the execution of the PESOE [Budget],' the document states, adding that the public debt stock on 30 June totalled 1.072 trillion meticais (€14.4 billion).
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