Moody’s stabilizes Mozambique view

Moody's Investors Service said it changed the outlook of the government of Mozambique to stable from positive and affirmed its long-term issuer and senior unsecured debt ratings at Caa2.

“The change of outlook reflects Moody's expectation that Mozambique will continue to face fiscal pressures and liquidity challenges amid institutional capacity constraints over the near to medium term, potentially leading to additional delays in debt repayments, as it will take time for ongoing reform efforts to strengthen the country's debt and cash management capacity.

“Fiscal pressures will persist in the context of the public remuneration reform, security challenges in the north of the country and upcoming elections, while government liquidity risk will remain elevated given the challenging maturity profile of domestic debt. Mozambique has very limited fiscal space to respond to shocks, including climate-related events, which can exert further pressure on debt service capacity,” Moody’s said in a statement.

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