Mozambique: Significant drop in external resources expected after 2025

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Mozambique: Significant drop in external resources expected after 2025

7:27 CAT | 24 Jun 2024

FILE - For illustration purposes only [File photo: TVM]

Mozambique’s government predicts a sharp drop in access to external resources in the period 2025 to 2027, equivalent to only 4.9% of Gross Domestic Product (GDP) next year, compared to the 9% expected for 2024.

“The projection of the international situation continues to require a cautious approach to disbursements of external resources for the 2025-2027 period,” acknowledged the Medium-Term Fiscal Scenario (MTFS) for that period, approved this month by the cabinet and to which Lusa had access on Friday.

External resources “take the form of credits and donations”. In the case of donations, they are made through “direct budget support, project financing and sectoral common funds”, the document explains.

This year, the Mozambican government expects to receive external resources totalling 137.993 million meticais (€2.014 billion), of which 107.867 million meticais (€1.575 billion) in donations. However, the document estimates a drop to 79,591 million meticais (€1.162 billion) in 2025, rising to almost 81,109 million meticais (€1.184 billion) the following year and to 84,667 million meticais (€1.236 billion) in 2027.

In 2023, these external resources allocated to Mozambique totalled almost 82,357 million meticais (€1.202 billion), according to the CFMP.

The Medium-Term Fiscal Scenario was drawn up by the government to ” translate strategic development objectives into realistic and sustainable financial projections” and provide “a solid basis for decision-making and the efficient allocation of resources.”

“By projecting public revenue and expenditure for the next three years, financial challenges and investment opportunities can be identified that will help guide effective policies and the efficient allocation of resources,” the document states.

The government estimates that, with measures on the tax revenue side and on the operating expenditure side, it will generate gains of 8,683 million meticais (€126.8 million) in 2025, which will rise to 16,735 million meticais (€244.4 million) the following year and to 21,617 million meticais (€315.6 million) in 2027.

Source: Lusa