New governor of Bank of Mozambique tasked to contain economic challenges

 

Dinis Navalha, Bank of Mozambique new governor

The Guardian

The President of the Republic, Daniel Chapo, swore in the new leadership of the Bank of Mozambique on Wednesday, led by the new Governor, Felisberto Dinis Navalha, challenging the central bank to...

combine the preservation of financial stability with a greater contribution to the country’s economic transformation.

During the swearing-in ceremony, Chapo said monetary and financial stability should not be confused with immobility, advocating action by the Central Bank capable of generating confidence, stimulating investment and facilitating the financing of productive activity.

The Head of State identified strengthening the banking system and bringing the Bank of Mozambique closer to the so-called real economy as priorities, with greater attention to the needs of producers, businesses, young people and women.

“We do not want stability through immobility. We want stability that generates confidence, stimulates investment, finances production, creates jobs and accompanies the country’s economic transformation,” he said.

For Chapo, the national financial system must evolve towards a more modern, inclusive and development-oriented model, capable of responding to economic challenges and helping to create opportunities.

On the same occasion, the President acknowledged the work carried out by outgoing Governor Rogério Zandamela, thanking him for his service to the country during his time at the helm of the Bank of Mozambique.

To the new administration, Chapo set out guidance based on three pillars: preserving the gains achieved, correcting what needs to be corrected, and modernising what needs to be modernised.

The arrival of Felisberto Dinis Navalha therefore marks a new cycle in the leadership of the Bank of Mozambique, at a time when the Government is seeking to strengthen the link between macroeconomic stability, production financing and economic growth.

The President of the Republic argued that the central bank should play an increasingly important role in laying the foundations for Mozambique’s Economic Independence.

Earlier, President Chapo revoked the appointment of Waldemar Fernando de Sousa as governor of the Bank of Mozambique, less than 24 hours after announcing him for the position.

The Presidency said the decision was taken because of “supervening issues”, but did not provide details about what prompted the reversal.

De Sousa's appointment was announced on Monday, August 31, with his inauguration initially scheduled for Tuesday. The ceremony was subsequently postponed before the Presidency cancelled the appointment altogether.

According to the World Bank, Mozambique enters the second half of 2026 with an economy recovering from a contraction, but still under significant fiscal, debt, foreign-exchange and security pressures.

Mozambique’s economy is entering 2026 at a delicate stage, with the country seeking to recover from a contraction in economic activity while facing persistent fiscal, debt and foreign-exchange pressures.

The economy contracted by an estimated 0.5 percent in 2025, reflecting the effects of post-election unrest, financing constraints and shortages of foreign currency.

Growth is expected to return in 2026, although forecasts remain modest, with projections ranging from below one percent to about three percent depending on the institution and assumptions used.

Inflation, which remained relatively subdued at the end of 2025, is expected to come under renewed pressure in 2026, particularly from food-supply disruptions, higher transport costs and movements in international fuel prices.

The Bank of Mozambique has already eased monetary policy significantly in response to earlier declines in inflation and weak economic activity.

The fiscal position remains one of Mozambique’s major vulnerabilities. Although the government reduced its fiscal deficit in 2025, limited access to external financing has increased reliance on domestic borrowing.

Rising debt-servicing costs, public-sector wages and other recurrent expenditures are expected to continue putting pressure on government finances in 2026, potentially limiting resources available for infrastructure and social spending.

Foreign-exchange shortages are also weighing on businesses and investment. Mozambique maintains a relatively strong reserve position, but the external accounts remain heavily influenced by large imports linked to major liquefied natural gas projects. The resulting current-account deficit is expected to remain substantial as investment in the gas sector gathers pace.