The government of Mozambique has enlisted global advisory firm Alvarez & Marsal (A&M) to provide technical assistance on public debt management, the country announced on April 2, 2026. The engagement comes as the southern African nation grapples with mounting external debt, currency pressure, and the lingering economic fallout from a disputed 2 billion US dollar secret loan scandal that came to light in 2016.
Alvarez & Marsal, known internationally for its restructuring and forensic accounting work, will reportedly assist Mozambique Ministry of Finance in conducting a comprehensive review of public liabilities, improving transparency, and developing a sustainable debt strategy. The firm will work alongside the International Monetary Fund, which has been engaged with Mozambique on a reform programme since 2022.
A Tumultuous Debt History
Mozambique public finances were severely destabilised when it emerged that the government had guaranteed hidden loans — contracted by state-owned companies ProIndicus and EMATUM — without parliamentary approval. The revelation triggered a collapse in donor support, a sharp depreciation of the metical currency, and a wave of defaults that paralysed economic growth.
Despite significant natural gas discoveries in the Rovuma Basin — among the largest offshore gas reserves in the world — Mozambique has struggled to convert its resource wealth into broad-based economic development. Corruption, insurgency in the northern Cabo Delgado province, and global commodity price fluctuations have all contributed to fiscal instability.
Foreign Investment Uncertainty
The hiring of a firm with international credibility is partly intended to reassure foreign investors and multilateral lenders. Mozambique is counting on offshore natural gas projects led by TotalEnergies and ExxonMobil to generate future revenues that can service its debt. However, the Cabo Delgado insurgency — which forced the withdrawal of TotalEnergies from its 20 billion US dollar liquefied natural gas project in 2021 — continues to deter full-scale investment.
The government finance ministry said the engagement with A&M reflects its commitment to "sound public financial management and transparency." The IMF, in its most recent assessment, praised Mozambique efforts to strengthen revenue collection but warned that debt sustainability remained a significant risk, particularly if gas revenues are delayed further.
Impact on Ordinary Mozambicans
While international finance teams and creditors watch the situation closely, ordinary Mozambicans are feeling the strain of inflation and currency weakness. Food prices have risen sharply over the past 18 months, and the government has struggled to fund essential public services including healthcare and education.
International NGO Oxfam warned that Mozambique risks repeating the debt spiral of the 2010s unless structural reforms are implemented urgently. "Mozambique cannot afford another lost decade," the organisation said in a statement. "Accountability, transparency, and inclusive growth are not optional — they are essential."
Source: Reuters