Impact of debt unsustainability on budget allocation in social sectors in Mozambique (2006–2026)

Abstract

The article critically examines the influence of growing public debt on the distribution of budgetary resources allocated to social sectors in Mozambique between 2006 and 2026, linking the analysis of public finances with development imperatives. A mixed-methods approach is used, combining a review of strategic and regulatory documents with an analysis of time series constructed from official data to assess how the expansion of debt and the increase in the costs associated with its servicing restrict the state's fiscal margin. The results indicate a structural reconfiguration of public expenditure since 2015, marked by increasing budgetary rigidity and the absorption of resources by financial obligations, despite relatively stable total expenditure relative to gross domestic product. In this context, social sectors become particularly vulnerable to fiscal adjustments, experiencing relative reductions and uneven impacts. Agriculture and Water show persistent fragility and greater exposure to budgetary constraints, while Education and Health maintain greater institutional continuity, though they have not recovered their previous share of the budget. It can be concluded that the deterioration of debt sustainability acts as a structural factor in the displacement of resources, weakening the redistributive function of the State and compromising investments that are essential for human development and the reduction of regional inequalities, highlighting the need for policies that reconcile prudent debt management with the safeguarding of social financing.