Mozambique: Export revenues from manufacturing industry increased 15.6% in Q2
The Human Rights League of Mozambique (LMDH) said yesterday that the suspension of international aid to the country, following the discovery of the so-called hidden debts, will result in cuts and the deterioration of social services.
“Given the suspension of disbursements to the state budget by the programmatic partners, associated with the existing deficit and already-rampant inflation, cuts are inevitable and the cost will fall on the social sectors, undermining rights to access to health, education, adequate food and more,” LMDH president Alice Mabota told a press conference in Maputo.
By contracting debts outside the government accounts, Mabota continued, the Mozambican government has deliberately and criminally violated the State Budget Law, to no clear purpose.
“The government of the day has seriously injured the noble principle of budgeting exercise, which should guide the implementation of the state budget, which is the universal principle that all revenue and expenditure of the economic and financial year in question should be contained in the state budget,” Mabota said.
Mabota accused the Mozambican government of arrogance and of ignoring parliament by clandestinely guaranteeing borrowing.
The revelation of loans guaranteed by the Government, contracted between 2013 and 2014, led the International Monetary Fund (IMF) to suspend the second tranche of funding to Mozambique and a mission to Maputo.
The group of state budget donors has already notified the Mozambican government of its decision to suspend payments, and the United States announced on Monday that would review US$400 million annual financing to Mozambique following the discovery of hidden debt in Mozambique’s public accounts.
“In light of the current situation and our responsibility to the American taxpayers who provide these funds, we will also review our assistance, in particular any assistance to the central government,” said the US embassy.
The Government of Mozambique acknowledged at the end of April the existence of clandestine debts totalling US$1.4 billion (EUR 1.25 billion), which it justified on national security grounds.
On Wednesday, the Mozambican President compared the hidden debts with malaria, saying it was now necessary “to disinfect the house” in order to regain donor confidence.
Including the recently disclosed loans, Mozambique’s public debt now stands at US$11.66 billion (EUR10.1 billion), of which US$9,890 million (EUR8.6 billion) is external. This represents over 70 percent of gross domestic product, up from 2012 figures of 42 percent.
Leave a Reply
Be the First to Comment!
You must be logged in to post a comment.
You must be logged in to post a comment.