Finance Minister Carla Louveira said the funds will back key development priorities as the country grapples with mounting fiscal pressures.

The announcement comes as the International Monetary Fund (IMF) continues to warn about Mozambique’s deteriorating debt dynamics and rising fiscal vulnerabilities. Earlier this year, the IMF declined further support due to concerns over public debt and governance, raising questions about the country’s financial trajectory.

Speaking to Channel Africa on Tuesday, Policy and Research Advisor Helio Guiliche said the financing package should not be seen purely as a victory, despite government enthusiasm. “Mozambique’s situation is not ideal. The terms of both internal and external debt are really bad,” he said. “Personally, I do not think this is something to celebrate unless the terms are different from previous loans. Loans disguised as foreign aid can push the country further into stagnation.”

Guiliche expressed scepticism about concessional financing, warning that decades of reliance on external loans have failed to generate sustainable economic transformation. “Since independence, IMF and World Bank loans have contributed to the collapse of the industrial base. Today, Mozambique imports even basic goods. Fiscal and monetary policies have not delivered development,” he said.

He linked these risks to broader political uncertainty, arguing that weak governance, corruption and lack of transparency could undermine the impact of the new funding. “Sustainability is one of the biggest worries. The country does not enjoy strong international credibility due to hidden debts and high corruption,” he said.

If used responsibly, however, the funds could help stabilise an economy still recovering from debt distress, climate shocks and conflict‑related disruptions. Guiliche said agriculture, infrastructure and fisheries should be prioritised due to their capacity to generate revenue, create jobs and support long‑term diversification.

He added that Mozambique urgently needs policies that reduce its dependence on natural resources, strengthen food security and harness its youthful population. “Diversification is key. The country must shift from a resource‑dependent model to one that produces enough to sustain itself,” he said.