Mozambique: State Institute denies misuse of €24.2M funds earmarked for Covid fight
Lusa (File photo) / A view of Maputo city
Economists António Francisco and João Mosca believe that the Ministry of Economy and Finance’s narrative that the national economy is showing good signs of recovery is false. Mosca says that the cost of living in the country remains problematic, while Francisco points up the country’s fall in an international index of economic freedom.
Taking stock of the economic performance of the first quarter of 2017, the Ministry of Economy and Finance reports an economic recovery based on evidence that, spurred by the unrestricted truce, the national currency is recovering against the US dollar, and that the annual tax target of more than 180 billion meticais has already been twenty percent achieved, according to National Director Rogério Nkomo.
“The cessation of the military hostilities gave indications of a new dynamics, a new recovery of the economy in the first quarter,” Nkomo said. “This recovery has created conditions for the achievement of the 2017 fiscal policy goals.”
However, economist João Mosca says that, considering the high cost of living in the country, this idea is false.
“Some aspects may be recovering. It may be that, with the end of the conflict, transport is circulating more freely, goods are selling faster, costs can fall, people are already going to the farming fields. But in economic terms I do not think there is any improvement, because the debt continues, the budget deficit continues, the balance of payments deficit continues, inflation remains very high, product prices, food prices continue to rise, people find it more difficult to live with the resources they have, the wages and incomes from the different types of business they do. Their companies are closing, unemployment is rising, so after all of this saying that the economy is recovering it is more of a lie than a half-truth,” said João Mosca.
Index of Economic Freedom ranking drops
Economist António Francisco from Mozambique’s Institute of Economic and Social Studies agrees, adding that Mozambique is sliding in economic freedom rankings.
“There has recently been an international index of economic freedom, in which Mozambique has regressed to the level of ‘repressed environment’, very difficult. I do not think that there is any reason for people to say that there is an investment environment. On the contrary, Mozambique has been [rated as] ‘junk’ all this time, meaning that it is a very speculative environment, and this has not changed.
“What is happening is that some institutions facing these difficulties are finding solutions so that people continue to have a life despite the country’s bankruptcy. There is life after bankruptcy. The country cannot simply close and neither can society, and I think that this is the reason why it is said that there is a recovery of sorts,” Francisco said.
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