Mozambique Weighs China Debt Relief Amid Economic Unrest

Mozambique is considering requesting debt restructuring or forgiveness from China, its largest bilateral creditor, for $1.4 billion owed amid severe fiscal challenges following violent unrest after disputed October elections. The country's economy contracted for two consecutive quarters, with public revenues severely impacted by protests that caused widespread damage to businesses and infrastructure. President Daniel Chapo emphasized that any debt relief would be sought within the framework of existing agreements, reflecting Mozambique's commitment to honoring its obligations. China holds about 14% of Mozambique's external public debt, which totals approximately $9.8 billion, and negotiations have not yet started. This move would align Mozambique with other African nations like Ghana, Zambia, and Ethiopia, which are also seeking to restructure debts due to rising borrowing costs and strained public finances. The debt burden is further exacerbated by global interest rate hikes, currency depreciation, and ongoing internal security and climate challenges.