Mozambique: New record for port of Beira - AIM
DW (File photo) / Central Bank headquarters in Maputo
The Mozambican government yesterday dismissed fears that using domestic debt to fund the state budget could undermine credit in the economy, arguing that the private sector has its own financing mechanisms.
“I think there is nothing to fear. There are processes. The government has its mechanisms and procedures, the private sector has its mechanisms and procedures,” spokeswoman Ana Comoana told a press conference following an extraordinary meeting of the Council of Ministers held in Maputo yesterday.
The Mozambican cabinet yesterday approved the proposal of the State Budget (OE) of 2018, which reveals that the part of the deficit supplied by domestic credit corresponds to 2.3 percent of gross domestic product (GDP).
International and Mozambican entities have warned of the risk that the country’s authorities would increasingly resort to issuing treasury bills to finance state activities as a result of the suspension of donor aid following the disclosure in April last year of the so-called hidden debts.
Also Read: Mozambique government approves draft state budget of EUR 5.1 billion for 2018
According to Comoana, the 2018 State Budget plan provides for the deficit to be funded by external credit to the value of 5.4 percent of GDP, and external donations equivalent to 2.6 percent of GDP.
The document foresees spending of 374.3 billion meticais (EUR 5.1 billion) against revenues of 222.860 billion meticais (EUR 3.05 billion).
The draft State Budget for 2018 reflects an increase in expenditure compared to the 2017 figure of 272.3 billion meticais (EUR 3.1 billion).
Also Read: Mozambican government forecasts economic growth of 5.3% in 2017
“There will be a deficit of 77.009 billion meticais (EUR 1.056 million), corresponding to 9.7 percent of GDP, against 10.7 percent of GDP in 2017,” the cabinet spokeswoman said.
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