Government’s debt with suppliers of goods will be paid off this year

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Government’s debt with suppliers of goods will be paid off this year

2:45 CAT | 19 Aug 2019

in file CoM

Between 2007 and 2017, the Mozambican government ran up debts to suppliers of goods and services of 29.7 trillion meticais, of which the executive has to date only paid 19.5 trillion.

Payment of these arrears started in November last year, the government in the first phase prioritising debts of up to 60 million meticais to small and medium-sized enterprises (SMEs).

This measure has been welcomed by the Confederation of Economic Associations of Mozambique (CTA), representing the business class, as easing the accounts of SMEs, often suppliers with less financial muscle, but with greater economic and social impact.

Debts accumulated between 2007 and 2016 stood at 29.7 billion meticais, but the executive committed to repaying only about 19.5 billion, allegedly because the remainder fell short on a number of administrative procedures.

Speaking exclusively to ‘O País’, Ministry of Economy and Finance (MEF) spokesman Rogério Nkomo said the payment process would be completed by the end of this year.

“I cannot indicate the amount, but much of the debt has already been paid and we anticipate that by the end of the year we will have the completed process. But the important thing is to confirm its validity,” he said.

On prospects for settling the remaining debt, Nkomo would only say that the process was still being analysed.

It should be noted that the non-payment of invoices to suppliers affected the companies’ treasury, not allowing their competitiveness, including the fulfilment of their own obligations towards banks, suppliers and others.

The survey of unpaid commitments and expenditures at the level of all public institutions shows that 25,953.57 million meticais outstanding (corresponding to 88%) was contracted at the central government level and 3,812.21 million meticais (12%) at provincial level.

In order to curb and prevent the accumulation of backlogs of expenditure and to reinforce budget transparency, the government is highlighting two measures, namely full compliance with Decree 5/2016 of 8 March – Public Works Contract Regulation, Supply of Goods and Provision of Services to the State and reinforcement of the audits of the Inspectorate of Finance, ensuring compliance with current regulations and accountability in case of deviation.

By Edson Arante

Source: O País