Mozambique: €358M ‘immediate’ revenue losses from pandemic – finmin

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Mozambique: €358M ‘immediate’ revenue losses from pandemic – finmin

3:04 CAT | 15 Apr 2020

Photo: O País

Mozambique’s Minister of Economy and Finance, Adriano Maleiane, said on Wednesday that the country had “immediately” lost revenues of 26.4 billion meticais (€358.2 million) from the budget as a result of the Covid-19 pandemic.

“We immediately lost 26.4 billion meticais in revenue, and we need to find another solution for this loss,” said Maleiane.

The minister, presenting the draft Economic and Social Plan and State Budget for 2020 to parliament, was referring to the impact of the new coronavirus on the public accounts.

The government’s draft Economic and Social Plan and State Budget for 2020 foresee growth in gross domestic product this year of 2.2%, down from the previous forecast of 4.0%, and revenues of 235.5 billion meticais, down from the previously projected 261 billion, the minister added.

Total expenditure is seen at just over 345.3 billion meticais.

The government’s initial growth forecasts had suggested GDP growth of as much as 4.8%.

In Mozambique, the new coronavirus is hitting restaurants and related activities hard, with the sector expected to be flat this year, while extractive industries are forecast to grow by only 1.5%, against an initial projection of 4.0%.

Maleiane said that agriculture would also be hard hit, but did not quantify the impact.

Despite the budget restrictions imposed by the new coronavirus, the government would maintain its commitment to allocating more resources to social policy, he said.

In this regard, the draft Economic and Social Plan and State Budget foresees 20% of spending going to the education sector, 15% to health and 10% to agriculture.

The executive is also to prioritise the defence and security forces, the justice sector and decentralisation with regards to public expenditure.

Both documents project an annual inflation rate for this year of 6.6%, and foresee a budget deficit of 109.7 billion meticais, to be funded by debt and aid.

The value of goods exported by Mozambique this year is expected to reach US$4.4 billion (€4 billion euros) while net foreign exchange reserves are expected to exceed US$3.2 billion, enough to pay for 5.8 months of imports.

The debate on the documents ends tomorrow, Thursday, when the vote is to take place. The ruling Frelimo party has a majority of seats in parliament.

The number of officially registered cases of infection by the new coronavirus in Mozambique has risen from 21 to 28, the Ministry of Health announced on Tuesday.

The number of deaths caused by Covid-19 in Africa now exceeds 800, with more than 15,000 cases of infection registered across 52 countries, according to the latest figures.

The coronavirus responsible for the Covid-19 pandemic has so far caused more than 124,000 deaths world-wide and infected almost two million people in 193 countries and territories.

Of those infected, some 413,500 are deemed to have fully recovered.

Source: Lusa