Mozambique’s government will only begin negotiating with creditors on debt restructuring after securing an agreement with the International Monetary Fund, President Daniel Chapo said in a Bloomberg Television interview.

The president outlined a phased approach, saying the immediate priority is a new IMF program designed to stabilise the economy, reduce dependence on natural resources, and restore investor confidence. “What we want at this moment is to conclude the agreement with the IMF and then move on to the aspect you are mentioning, namely the renegotiation of the debt with international partners,” Chapo said. “We want to establish trust first.”

Mozambique’s economy grew by 1.1 percent last year, according to World Bank estimates, despite output shrinking during the first three quarters of 2025. The lender expects expansion of 2.8 percent in 2026.

Chapo highlighted that the country’s economic prospects have improved following its removal from the Financial Action Task Force’s gray list and the restart of liquefied natural gas projects by TotalEnergies SE and Exxon Mobil Corp. However, he noted that significant contributions to state revenues from these projects are expected only in the next decade.

The president addressed questions about the 900 million US dollars bond due 2031, which currently trades with a yield near 12.6 percent. “Not at the moment. We will consider all of this after closing this package, which I call the package for stimulating the country’s macroeconomic situation,” he said.

Financial strains remain acute. S&P Global reported a foreign-exchange backlog exceeding 700 million US dollars by October, while the metical has barely moved against the dollar since mid-2021. Allowing for currency depreciation could increase inflation in an economy heavily reliant on imports, from fuel to food, raising risks to social stability in the wake of last year’s post-election unrest.

Mozambique’s external public debt stood at roughly 9.8 billion US dollars at the end of 2024, with China holding about 14 percent. Last year, the government retained New York-based Alvarez & Marsal to advise on debt restructuring. The IMF, which warned in November of “acute” financing challenges, has repeatedly urged fiscal consolidation and greater flexibility in the exchange rate, along with cuts to the wage bill.

Liquidity pressures have affected government operations. Earlier this week, authorities announced a partial payment of a bonus, effectively a 13th monthly salary for public workers, following Prime Minister Maria Benvinda Levi’s warning of funding constraints.

Chapo emphasised that any IMF program should strengthen Mozambique’s credibility in international markets and lower borrowing costs, while prioritising tangible improvements for citizens. “All of this will help ensure that Mozambique can position itself in the best possible way for its growth,” he said. “We really need this growth to be reflected in development. And this development has to do with the lives of the people.”

Mozambique’s last IMF program ended in early 2025 when the government chose not to proceed with remaining reviews under the three-year Extended Credit Facility.