Mozambique and Angola are the PALOP countries most at risk of debt restructuring - analyst
The government of Mozambique expects to reduce the state budget deficit from 10.7 percent (in 2017) to 9.7 percent (in 2018) of the gross domestic product, leaving open the issue of external financing agreements, Council of Ministers spokeswoman announced at the end of an extraordinary meeting on Thursday.
The State Budget (OE) for 2018 forecasts an expenditure of 300.7 billion meticais (and not of 374 billion meticais as Lusa reported on Thursday) and revenues of 222.8 billion, that is, one the deficit of 77 billion meticais (Euro 1 million).
The executive expects to cover this difference with internal credit corresponding to 2.3 percent of GDP, external credit equal to 5.4 percent of GDP and external donations amounting to 2.6 percent of GDP.
The group of 14 traditional donors from Mozambique – which includes Portugal and the European Union – the designated G14, focused on direct support to the State Budget, froze aid in 2016 following the hidden debt scandal.
Asked where the external donations would come from, Ana Comoana said, without specifying, that they may originate from “traditional donors or others with whom Mozambique enters into agreements”.
“To say now whether it were this or that would be talking about a legally non-existent agreement. I would rather not comment on the agreements that might be concluded with this or that partner,” she said.
The spokesperson added that Mozambique “counts on all partners”, said that even G14 donors “have been funding some projects, especially at the social level” in the context of bilateral sectoral support, and dialogue for the recovery of more support “points to a good outcome”.
“All the statements have been unanimous in recognising the great work by the government, the private sector and the general population in reversing the impact of the debt and the international context,” she concluded.
Improving revenue collection, containing public spending and reforming the business sector are the key phrases of the Frelimo government’s 2018 State Budget to be put to the Assembly of the Republic in the next few days.
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