Mozambique: Post-election unrest reduced 2024 state revenue by €536M – draft budget text

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Mozambique: Post-election unrest reduced 2024 state revenue by €536M – draft budget text

7:00 CAT | 12 May 2025

FILE - For illustration purposes only. [File photo: Lusa]

The instability that followed the 9 October general elections in Mozambique reduced state revenue by €536 million, according to government figures in this year’s budget proposal.

“The fourth quarter of 2024 was characterised by social and political instability following the legislative and presidential elections, which culminated in the destruction of public and private infrastructure, the deprivation of people of access to essential basic services and their jobs, looting of public and private property, among others,” reads the proposal for the Economic and Social Plan and State Budget (PESOE) 2025, which was debated in parliament on Friday.

It adds that “the implications have been damaging for the economy”, causing “immediate negative repercussions on national and foreign direct investment, job creation, price stability and the social well-being of the population.”

It also recalls that the economic growth forecast for 2024 was 5.5%, as set out in the PESOE approved for last year, “however, only 1.85% was achieved, with the mining industry, commerce and services, the manufacturing industry, hotels and restaurants, and agricultural transport being the most penalised.

“The reduction in state revenue by almost 38.7 billion meticais [€536 million] has jeopardised the performance of spending on economic and social infrastructure and other basic services for the country’s economic development,” the document also points out.

For 2025, the government forecasts growth in gross domestic product of 2.9%, revised downwards from the pre-election estimate of 5%. The public sector budget deficit, at 8.2% of GDP, is below the previous projection of 8.4%, and is at least lower than in the years since 2020, which peaked in 2023 at 13.4% of GDP.

Former presidential candidate Venâncio Mondlane, who does not recognise the official results of the 9 October general elections that handed victory to his rival Daniel Chapo of the governing Frelimo party, who was sworn in as Mozambique’s fifth president in January, has since 21 October called protests that in five months have led to almost 400 deaths in clashes with the police, according to data from civil society organisations.

However, on 23 March, Mondlane and Chapo met for the first time and made a joint commitment to stop the violence in the country.

State spending has been functioning on the basis of emergency twelfths since the beginning of the year, following the general elections, despite Chapo having been sworn in on 15 January and forming the government a few days later.

The draft law on the PESOE for 2025 is to be debated in plenary from Friday morning and is guaranteed approval by Frelimo’s renewed parliamentary majority.

“The central objective of PESOE 2025 is to create the foundations for Mozambique’s economic independence in the medium and long term, through policy measures aimed at promoting the diversification of sources of economic growth and increasing its resilience in the face of cyclical shocks, job creation, the modernisation of the economy’s infrastructural base, the efficient management of natural resources and the improvement of income distribution patterns,” the document reads.

State revenue for the whole year should amount to more than 385.871 billion meticais (€5.347 billion), equivalent to 25% of GDP, and total expenditure to 512.749 billion meticais (€7.107 billion), or 33.2% of GDP, resulting in a budget deficit of 8.2%.

Source: Lusa