Mozambique: Covid-19 costing the state at least 21 billion meticais – AIM report

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Mozambique: Covid-19 costing the state at least 21 billion meticais – AIM report

6:00 CAT | 29 Sep 2020

Photo: Miramar

Mozambican Finance Minister Adriano Maleiane announced on Monday that the state has lost revenue of at least 21 billion meticais (about 291 million US dollars, at current exchange rates) because of the impact of the Covid-19 pandemic.

“Covid-19 is causing very serious problems for the economy, because there are sectors which have ceased to produce”, said Maleiane. “We began the year with a projection for growth in the Gross Domestic Product of four per cent, but then we dropped it to 2.5 per cent, and the latest forecasts are that the GDP will shrink by between 0.8 and 1.2 per cent. It’s possible that the economy will fall a bit further”.

Hence, by the end of this month, the government intends to submit to the country’s parliament, the Assembly of the Republic, an amended budget for this year, in order to avoid a collapse in priority development areas.

“Naturally, when there is a fall in revenue there is always a need to arrange the priorities so that the major objectives are not economically affected – that is, so that there is only a minimum negative effect on what we planned for health, education and other areas”, said the Minister.

Maleiane was speaking during an audience he gave to the Assembly’s Plan and Budget Commission, which is monitoring implementation of the Economic and Social Plan for 2020 and of the government’s five year programme for 2020-2024.

He said the amended budget seeks to correct the existing budget deficit, and to adjust the budgetary law to current reality as well as to confer the greatest possible transparency to the government’s activities.

“The only thing we can do is go to parliament to undertake the correction”, stressed Maleiane. “The budget has to be corrected because the revenue is going to fall”.

The chairperson of the Plan and Budget Commission, Antonio Niquice, recognized the negative effects of Covid-19 on the economy, and declared that it is the job of the Finance Ministry to undertake the necessary fiscal measures and other efforts regarding planning and budgeting.

“We are aware that with the advent of the Covid-19 pandemic, various sectors of the state will have to be reinvented”, he said. “We have a budget which is about 84 per cent dependent on internal revenues. So, in accordance with the parameters already established, the Assembly will receive the amended Economic and Social Plan and the respective State Budget, and the document will be give the due treatment”.

Source: AIM