According to the report on public debt in 2023, the State's expenditure on servicing external debt last year was divided between 487.72 million dollars (456 million euros) for amortizations and 166.48 million dollars (155.6 million euros) in interest.

The total external debt service in 2023, amortized capital and interest, was the highest in the history available in the report, compared to 545.7 million dollars (510.1 million euros) in 2022 (+19.9%), 517.4 million dollars (483.6 million euros) in 2021, 475.2 million dollars in 2020 (444.2 million euros) and 321 million dollars (300 million euros) in 2019.

"Similar to the previous fiscal year, the net movement of foreign exchange in public debt operations was once again negative, that is, the Government paid more to creditors (in capital and interest) than it received (in new disbursements). This is due to the fact that a large part of the portfolio projects have already closed their respective disbursement periods (having entered the full repayment phase), at a time when the current policy of restricting external debt is conditioning the entry of new projects into the Government's credit portfolio", reads the document.

The report adds that the flow of external debt movements in 2023 "also reflects the effect of the incorporation into the debt service of the payment made following the multilateral out-of-court agreement reached between the Mozambican State and a group of 14 creditor entities of the extinct Proindicus", in the case of the hidden debts on trial in London, involving ten foreign financial institutions and four domestic commercial banks.

"Under the aforementioned agreement, and subject to the respective approval by the Council of Ministers and subsequent verification of legality (legal opinion of the PGR and approval of the Administrative Court), the State proceeded to pay the amount of 46.36 million dollars [43.4 million euros) in favor of the ten foreign institutions targeted", it reads.

The costs of servicing all of Mozambique's debt -- including domestic debt -- will increase by 18% in 2024, to more than 116,631 billion meticais (1,702 billion euros), according to previous data from the Mozambican government.

According to the supporting documents for the Economic and Social Plan and State Budget (PESOE) for 2024, the cost of servicing Mozambique's debt -- payment of interest and repayment of capital -- is estimated to be equivalent to 7.6% of the Gross Domestic Product (GDP) estimated for this year.

"The acceleration in the amortization of the capital is related to the framework of the External Debt Restructuring Agreement, with maturities to be verified in 2024. Additionally, a change in the interest rate on external debt is expected, for bonds maturing in 2024, reads the document.

Thus, more than half of the cost of servicing Mozambique's public debt this year will be for capital amortization, in the amount of 60,915 billion meticais (889 million euros), and 55,716 billion meticais (813.2 million euros) for interest payments, of which 41,430 billion meticais (604.7 million euros) relate to the debt issued internally, through Treasury bonds and bills.

The governor of the Bank of Mozambique acknowledged in November "the strong pressure on the country's public expenditure", "in a context of weak revenue collection and limited sources of external financing", which "is contributing to the increase in fiscal risk and internal indebtedness".

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