Mozambique’s dollar-denominated bond dropped for the third consecutive day on Wednesday, according to Tradeweb data, as concerns over potential public unrest following a disputed election continue to grow.
The country’s only eurobond, set to mature in 2031, fell by 0.54 cents to 84.92 cents on the dollar, extending its losses to over two cents since Friday. Final results from Mozambique’s October 9 national election are expected this week, but opposition leaders allege widespread vote rigging.
The situation escalated on Saturday when gunmen killed an opposition lawyer and a party official in Maputo, prompting police to respond with teargas and gunfire during protests at the site of the killings.
Kevin Daly, a portfolio manager at abrdn, noted that the bond has been hit by the election-related violence, while rising U.S. Treasury yields have also led to a broader selloff in Sub-Saharan African bonds.Ma
Jamie Fallon, an economist at Tellimer, warned that the funerals of the slain opposition figures, set for Wednesday, could trigger further protests.
Mozambique is already under economic strain, with high borrowing costs and insecurity affecting its liquefied natural gas production, a major revenue source. The country’s debt is nearly equal to its annual GDP.
Last week, S&P Global Ratings downgraded Mozambique’s long-term local currency credit rating from “CCC+” to “CCC,” citing the heightened risk of missed payments or a potential distressed debt exchange.
