Investment accounts for less than 20% of Mozambique’s 2025 budget expenditure

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Investment accounts for less than 20% of Mozambique’s 2025 budget expenditure

4:15 CAT | 14 May 2025

File photo: Lusa

Mozambique will spend less than 20% of total expenditure on investment, corresponding to 6.4% of the gross domestic product (GDP), according to data from the budget proposal approved on Saturday in the Assembly of the Republic.

According to data compiled today by Lusa from the proposed Economic and Social Plan and State Budget (PESOE) for 2025, the expected investment expenditure amounts to 98,776 million meticais (€1,360 million), equivalent to 19.3% of the total public expenditure for this year, of almost 512,749 million meticais (€7,107 million).

Even so, this is a higher amount than that achieved in recent years, namely 69,996 million meticais (€966 million) in investment expenditure in 2023 and 96,418 million meticais (€1,330 million ) in 2024, in this case reaching only 59.3% of the target for the entire year.

The largest share of state expenditure this year continues to be on its operations, 68.5% of the total, with financial operations representing 12.2%.

According to the budget proposal, the first prepared by the executive led by Daniel Chapo, who was sworn in as the fifth Mozambican president last January, domestic financing of investment expenditure, such as public works, is equivalent to 1.6% of GDP, around 24,092 million meticais (€330 million ), 1.4 percentage points less than in 2024, “due to limited domestic resources”, with the remainder financed by external resources.

“However, the Government will continue to mobilise additional resources, both domestic and foreign, with a view to promoting the country’s socio-economic development”, the document states.

The PESOE forecasts GDP growth of 2.9% for 2025, an average annual inflation rate of 7%, exports of goods worth US$8,431 million (€7,379 million) and Gross International Reserves of US$3,442 million (€3,045 million), equivalent to 4.7 months of coverage for imports of goods and services, excluding megaprojects.

The government’s revenue for the whole year is expected to amount to more than 385,871 million meticais (€5,347 million), equivalent to 25% of GDP, and total expenditure to 512,749 million meticais (€7,107 million), corresponding to 33.2% of GDP, generating a budget deficit of 8.2%.

Source: Lusa