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Lusa (File photo)
The Mozambique State Budget proposal for 2018 provides for increased funding for priority sectors, but the United Nations Children’s Fund (UNICEF) raises doubts in an analysis that Lusa has had access to.
The State Budget proposal foresees that the sectors that require the most attention will receive 147.3 billion meticais (EUR 2,032 million) in 2018, a record amount, the UNICEF acknowledges.
The areas concerned are education, health, infrastructure, agriculture and rural development, judicial system, transport and communications, social action and employment, to which the 2017 State Budget allocated 144.5 billion meticais (EUR 1,994 million).
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In this group, education has the largest share in 2018 with 52.3 billion meticais (8 percent more than in 2017), followed by the infrastructure sector with 40.9 billion (10 percent more than this year) and with 26.6 billion meticais (26 percent more than in 2017).
However, despite the overall record value of 147.3 million meticais, UNICEF said that once “inflation and depreciated metical” are taken into account “the purchasing power of this envelope is far from the historical record”.
On the other hand, “the percentage of the budget allocated to priority sectors in 2018 is lower than in 2017,” declining from 53 to 49 percent, the analysis notes, while the proportion dedicated to other sectors increases from 24 to 28 percent. Debt service remains at 23 percent, as in 2017.
“The government has a goal of allocating at least 60 percent of the resources to the priority sectors, but if we take into account the entire budget, in 2018 they are expected to get below 50 percent,” UNICEF warns.
The analysis indicates a number of issues lacking clarity, including why new teacher recruitment “accounts for only a quarter of previous years”, given that the government has already recognised the need to “improve the pupil-teacher ratio in primary education “.
UNICEF also notes the cuts in support for 2018 and asks “what subsidies remain to protect the most vulnerable segment of society and what subsidies will be cut?”
Revenue estimates also raise questions.
The government projects a 20 percent increase in fiscal revenue for 2018, “but offers few details on how it will be generated”, the analysis notes, recalling statements by the governor of the Bank of Mozambique, Rogério Zandamela, that he had little confidence in the country’s capacity to increase that.
“How does the government expect to increase revenues by 20 percent when GDP is expected to increase only 5 percent?” The country expects substantial collection of capital gains tax in 2018, but UNICEF is concerned, fearing that inability to raise revenue will result in cuts in priority sectors.
The UNICEF analysis was delivered to the government, and it is expected that the State Budget proposal for 2018 will be discussed by the end of next week in parliament.
The Ministry of Economy and Finance of Mozambique said on Monday that education, health and infrastructure continued to be a priority, as was combating poverty and inequality.
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Speaking to Lusa on the sidelines of a conference on poverty and inequality, the director of the Department of Economic and Financial Studies in the ministry, Vasco Nhabinde, said that the government would continue to direct the largest portion of the state budget to the basic social areas.
“Most of the resources go to the education and health sectors, areas that we think should receive greater attention from the government,” he said.
The 2018 State Budget provides for a total expenditure of 303 billion meticais (about four billion Euros).
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