Maputo, Aug. 4, 2025 (Lusa) - The rating agency Fitch recognises that the suspension of US aid to Mozambique by USAID also had an impact on the foreign currency shortage felt in the country, representing 3% of Mozambique's GDP.
“Foreign currency shortages increased in 2025, partly due to the decline in external disbursements to the government and the suspension of USAID,” Fitch wrote in in its latest rating assessment of the country, stressing that the US agency disbursed US$586 million (€505 million) in aid to Mozambique in 2024, mainly for projects related to health and education, "equivalent to 3% of Gross Domestic Product (GDP)".
The new US administration, led by Donald Trump, suspended the activities of the United States Agency for International Development (USAID) earlier this year. USAID was founded in 1961 with the aim of providing international humanitarian support, with significant funding in the health sector in Mozambique. On 1 July, the definitive closure of the agency was announced.
At least 2,500 jobs were lost in Mozambique with the cut in US foreign aid through USAID, according to July data from the Mozambican government, which admitted that this was "a problem" for the economy.
“The last meeting I had with the group that was created from the organisations that work and benefited from the funding, they spoke of around 2,500 [jobs],” said the Minister of Labour, Gender and Social Action, Ivete Alane, adding that there is no “official estimate”.
In its August assessment, which maintained the CCC rating assigned in February - the last level before Financial Default for Mozambique , Fitch also admits that the increase in April of the mandatory conversion of export revenues into local currency from 30% to 50% “will alleviate part of the foreign exchange shortage”, as well as the new programme expected with the International Monetary Fund (IMF) by the end of the year.
Fitch also considers that Mozambique's reserves are “stable”, but that “risks remain”. It predicts that Mozambique’s international reserves will “remain broadly stable” at US$3.5 billion (€3.02 billion) in 2025.
The Bank of Mozambique is adopting measures to increase “fluidity” in the foreign exchange market, trying to redistribute the volume of foreign exchange available, Governor Rogério Zandamela said on 31 July.
“These measures are nothing more than adjusting here, taking certain resources from here, putting them there and monitoring them better,” the governor said at a press conference in Maputo at the end of the Monetary Policy Committee (CPMO) meeting, which is held every two months.
“An increase in liquidity in the foreign exchange market is expected. With a view to boosting sales to the public, the Bank of Mozambique recently reduced the daily limits on foreign currency held by banks. This measure complements the decision to increase the minimum conversion rate for export revenues from 30% to 50%, which means greater availability and access to foreign currency," the governor added, commenting on the conclusions of the meeting.
Responding to journalists, taking into account the concerns of businesspeople about the lack of access to foreign currency, particularly to guarantee imports, Zandamela pointed out that “there was a need to adjust certain segments of liquidity”.
“I repeat, this is very important. One thing is the aggregate distribution of liquidity, if it exists as a whole in our system, and another thing is whether it is adequately distributed among the various segments of the country, among exporters, among importers, among investors.”
The Confederation of Economic Associations (CTA) of Mozambique, the country's largest business association, warned on 18 February that the lack of foreign exchange in the market was affecting operations, especially in the health, aviation, fuel and food import sectors.
PVJ/AYLS // AYLS
Lusa
