Cabo Delgado: Terrorism has put “extraordinary pressure” on accounts – FinMin

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Cabo Delgado: Terrorism has put “extraordinary pressure” on accounts – FinMin

3:27 CAT | 17 Oct 2022

Image: Noticias

Mozambican Economy Minister Max Tonela has told Lusa that terrorism in Cabo Delgado has put extraordinary pressure on the state’s accounts, but argued that the “issues of national defence are issues of sovereignty”, and will therefore always be a priority.

Speaking to Lusa in Washington on the sidelines of the annual meetings of the International Monetary Fund (IMF), Tonela said that the attacks in Cabo Delgado province in northern Mozambique were in the spotlight in the meetings he held in the US capital, with the aim of mobilising resources.

“We took this opportunity to interact with the cooperation partners, mainly multilateral, but also bilateral – the World Bank and the Fund (IMF) among them. And in the discussions about the development issues of Mozambique, we also touched on the challenges that the Government has to deal with in regard to humanitarian assistance, to deal with resources’ mobilisation to assist the communities which were displaced, but also for the whole programme of reconstruction and accelerated development of Cabo Delgado,” he said.

According to the minister, the conflict in Cabo Delgado, “has been putting extraordinary pressure on the country’s accounts”, so he was seeking to “work with partners to mobilise resources to train the National Defence Forces to be able to better deal with this situation, but also equipment issues”.

Regarding the type of international support received so far, Tonela said it had been “multiform” ranging from training and capacity-building in the Defence and Security forces by bilateral partners such as the United States, the European Union, African countries and the United Kingdom, as well as funding from the European Union for the acquisition of equipment “which has already been received in part by the country”.

Cabo Delgado province is rich in natural gas but has been terrorised since 2017 by armed violence, with some attacks claimed by the extremist group Islamic State.

The insurgency has led to a military response since a year ago with support from Rwanda and the Southern African Development Community (SADC), liberating districts near gas projects. However, new waves of violence have emerged in the south of the region and in neighbouring Nampula province.

Asked about the impact that the war is having on Mozambique’s deficit, the head of the Economy and Finance ministry stressed that “issues of national defence are issues of sovereignty and will have to be prioritised”.

“Our perspective is to create conditions to eliminate this evil, but also, at the same time, promote development and create better harmony, and the whole package of reforms that we have been implementing responds to this framework of challenges,” Tonela said.

The minister pointed out that the financial support received from international institutions, such as the IMF and the World Bank, is not aimed at defence, but rather for development purposes, especially in social sectors, such as education, health, increase of social protection for families and development of infrastructure, among others.

“But we are also implementing an Economic Stability programme with the objective of expanding the State’s fiscal space, and there we have reforms planned in the VAT code and the customs tariff, among others. We are also working to ensure greater efficiency in expenditure, to reverse the trend of public debt – both internal and external – and also with the creation of this fiscal space we can, with our own resources and with the mobilised resources, meet the challenges of capacity building,” he said.

As for the intense week he spent in Washington, Max Tonela said the meetings with the IMF and World Bank had been “very fruitful,” as were the parallel discussions he held “with other investors interested in Mozambique”.

“It was very positive because it made it possible to have very frank, diversified discussions with various partners, with a view to finding solutions to the country’s challenges in terms, above all, of funding, both for private and public projects, but also to follow up on mobilising resources for the implementation of the reform programme, with a view to creating greater sustainability and acceleration in the development of our economy,” he noted.

In that sense, it was possible to “open doors for us to obtain additional resources and there are technical discussions which will begin as a result of the understandings we reached”, Tonela announced.

Source: Lusa