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The European Union (EU) says that conditions are not yet in place for resuming its direct support for the Mozambican State Budget. For some analysts, resumption depends on prudent management of public finances and improvement of accountability mechanisms on public debt .
“There will be no resumption of budget support or new direct money to the Government”, guaranteed the EU representative in Maputo, António Sanchez-Benedito, quoted by the newspaper O País.
The diplomat added that this will only happen when Maputo enters into an agreement with the International Monetary Fund (IMF),for a program that includes transparency and good financial management.
Economist João Mosca says that “these are the aspects that are lacking in governance in Mozambique because there is no transparency in the management of public revenues and debt”.
“There is an absence of contract transparency, there is an excessive indebtedness of the State and it is not known why this remains so, in addition to the absence of public spending limits, in order to maintain good budgetary stability”, considers that economist.
It should be noted that the Centre for Public Integrity (CIP) had warned of the risk of unwise management of public finances by the Government, given the persistent lack of accountability for public debt management.
According to CIP, the limits for indebtedness and issuance of guarantees are defined without any plausible justification, with the NGO emphasising that the limit for 2020 is 19.4 billion meticais, “and there is no justification why it was set at this level “.
“There is a persistent lack of accountability on public debt management, a scenario similar to that of 2013 and 2014,the years in which the so-called hidden debts were contracted”, says CIP.
Mozambique’s international partners, including the EU, stopped direct budget support in 2016, following the disclosure of the so-called hidden debts.
For economist António Francisco, this decision by the partners left the country in a complicated situation, mainly because it has no productive capacity.
Meanwhile, the Government minimises the situation and considers the EU “an important partner that is involved in different development actions in Mozambique, including Renamo’s demilitarisation process.
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