Mozambique cuts bilateral debt by $37.2M as wood exports rise and China trade dips

Bilateral debt reduction in the second quarter

Mozambique reduced its debt obligations to its three largest bilateral creditors by $37.2 million (€31.8 million) during the second quarter of 2026. Official public debt bulletin figures indicate that the total bilateral debt held by China, Japan, and Portugal declined from $2,100 million (€1,795 million) in March 2026 to $2,063 million (€1,763 million) in June 2026. The country's overall external debt stock fell over the same three-month span from $8,918 million (€7,628 million) to $8,851 million (€7,571 million), representing a total reduction of $67 million (€57.3 million). The Ministry of Economy and Finance reported that this contraction was driven by scheduled reimbursements of maturing loans during the period.

Creditor exposure and debt repayments

Portugal registered the largest bilateral debt reduction, with Mozambique lowering its exposure to Lisbon by 5.4%, or $21.78 million (€18.6 million). This reduced the Portuguese debt stock from $405.84 million (€347.1 million) in March 2026 to $384.06 million (€328.5 million) by the end of June 2026. In comparison, debt owed to China fell by $8.84 million (€7.6 million) to $1,284 million (€1,098 million), while liabilities to Japan decreased by $6.57 million (€5.6 million) to $395 million (€338 million). Across all bilateral lenders, Mozambique amortized $59.2 million (€50.7 million) in capital during the second quarter, including $21.78 million to Portugal, $8.83 million to China, and $7.88 million to Japan. China remains Mozambique's largest bilateral creditor, representing 14.5% of the country's entire external debt.

Divergent Lusophone trade with China

Macau Forum data compiled from Chinese customs authorities showed broader trade between Portuguese-speaking countries and China reaching $175.7 billion (€156.7 billion) between January and August 2026. While overall trade grew 21.8% year-on-year, individual member states recorded sharply contrasting performances. Brazil remained the dominant supplier with exports climbing 25.1% to $90.9 billion (€81 billion), Angola increased shipments by 9.8% to $11.5 billion (€10.2 billion), and Portugal saw goods exports grow 1.1% to $1.97 billion (€1.75 billion). In contrast, Mozambique saw its exports to the Chinese market fall 19.3% to $883.6 million (€787.8 million) during the eight-month period, while São Tomé and Príncipe experienced an 89.5% decline. Portuguese-speaking nations imported $69.9 billion (€62.3 billion) in Chinese products over the same period, leaving China with a $35.9 billion (€32 billion) trade deficit with the bloc.

Structural shifts in processed wood exports

Despite lower overall shipments to China across the first eight months, Mozambique experienced a 311% increase in processed wood exports during the first half of 2026. Government execution data showed exported volume reaching 24,648 cubic meters between January and June, up from 5,995 cubic meters in the first half of 2025. This expansion was driven almost entirely by the introduction of wood veneers, which totaled 22,460 cubic meters after registering zero exports during the same period in 2025. Other export categories included 683 cubic meters of plywood and 150 cubic meters of logs. Traditional product categories declined, with boards dropping 80% to 1,119 cubic meters, furniture parts declining 62% to 128 cubic meters, and planks falling 10% to 108 cubic meters. Primary export destinations for the processed wood included China, Mauritius, Vietnam, and South Africa.