The payment of the debt of Namibia and Mozambique does not hide the difficulties that the two countries are going through.
Mozambique and Namibia have followed in the footsteps of Ghana and Nigeria, which during 2025 repaid $1.4 billion and $3.4 billion of debt, respectively. In the Ghanaian case, in the form of Eurobonds and in the Nigerian case, repaying a loan from the International Monetary Fund (IMF) granted in 2020 to mitigate the impacts of the pandemic. Maputo and Windhoek have also repaid their debts with the international financial entity, the first of more than 700 million dollars and the second of 23. In addition, the Namibian Government has completed the payment of Eurobonds that matured last October for a value of 750 million dollars.
Eurobonds are bonds issued by private investors in a currency other than the country that issues them. In general, they are loans in dollars that are granted outside the United States. They are characterized by having very high interest rates for African countries, often even between 10 and 15%, as investors consider them to be high-risk loans. For example, the Democratic Republic of the Congo entered the Eurobond market for the first time this year, offering a rate of 8.75% for five years and 9.50% for ten years (see MN 723, p. 13).
The loans granted by the IMF are different. Their interest rates are much lower, but, in exchange, they are conditional on countries applying a series of economic measures that, very often, include cuts in social spending. This implies exhaustive control of the countries’ internal accounts by the international organization, which is often perceived as an attack on sovereignty.
The differences between Mozambique and Namibia
With the repayment made at the end of March by the Government of Daniel Chapo, Mozambique has canceled all the debt it had with the international organization, as well as the mission that the IMF had planned in the country at the end of August. However, forecasts indicate that foreign currency reserves, which had reached 4.5 billion dollars, almost the highest in their history, will be reduced to 3.5 billion. This is especially relevant at a time when the situation of global instability is causing the rise in prices of oil, fertilizers and other goods that a country like Mozambique is forced to import and which, in general, are paid in dollars. In fact, last May increases of up to 45% for diesel and 12% for gasoline were announced, with the impacts that said increase has on the fragile economy of the southern country.
Mozambique’s economic situation is at a critical point. Despite having complied with the payment to the IMF, Mozambique has a debt of close to 1 billion dollars in Eurobonds and next September it has to face an interest payment. The anticipated difficulties in fulfilling these commitments have raised alarm bells, which is why Chapo’s Government is already studying a possible debt restructuring, which could even involve the reconversion of said debt from dollars to renminbis (Chinese yuan). Analysts consider that the payment to the IMF seeks to increase Mozambique’s credibility in international markets, since rating agencies have worsened the country’s rating, going from CC to CCC, and have even warned of a possible default situation.
The Namibian case is different from the Mozambican one. In October of last year, with the payment of the aforementioned 750 million dollars, the country considerably reduced the debt it had acquired in 2015 through the issuance of Eurobonds. This payment also affected the international currency reserves of the Bank of Namibia, which were estimated at just under 3 billion dollars by the end of 2025. A few months later, at the end of April of this year, Namibia announced the full payment of the debt it still had with the IMF, of 23 million dollars. For analyst Chinedu Okafor of Business Insider Africa, “The overall context of Namibia’s debt reduction reflects a determined fiscal consolidation effort aimed at improving macroeconomic stability and reducing dependence on external financing.”
However, the case of Namibia is particular and its economic policy depends on third countries. Its currency, the Namibian dollar, is pegged to the South African rand, which guarantees a 1:1 conversion rate with the South African currency and greater stability of its currency, but implies a loss of monetary sovereignty. It is a situation that has many similarities with what happens between the CFA franc and the euro.
Future prospects
The future perspectives facing both countries are different. The case of Mozambique is more critical, since the country’s bet is to rely on income from gas exploitation in the north of the country. However, the situation of violence in the province of Cabo Delgado (see MN 722, pp. 34-39) adds more uncertainty to this possibility. Sam Jones, a researcher at the United Nations University, however, proposes two other possible routes in an article to The Conversation. On the one hand, “the restoration of non-extractive growth must be a priority”, with measures that would include the depreciation of the metical, the acceptance of higher inflation, the development of a more efficient fiscal framework, the containment of the wage bill, re-engagement with the IMF and a credible and viable medium-term growth strategy. On the other hand, the researcher maintains that a third way would be that of “forced correction”, where the country would be forced to “a large-scale adjustment.”
In the case of Namibia, analysts argue that recent debt payments should improve the country’s risk profile with investors and rating agencies. However, the medium The Voice of Africa, points out that this amortization entails at least two risks: the implications of such a pronounced fall in international currency reserves in such a short time and that the loans that national banks and investors could grant would be at higher interest rates or with shorter maturities.
Although Mozambique and Namibia have been the latest African states to demonstrate that they can meet debt payments, the underlying issue remains the perpetuation of a global financial model that forces these countries to delicate balances to meet their financial commitments. The solution, therefore, is not only the payment of the debt, but deeper structural measures that include the development of stronger and more efficient tax agencies, more sustainable financing models and a restructuring of productive and industrial models.
