Mozambique: Government forecasts 9.6 billion meticais spending on displaced people in 2021

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Mozambique: Government forecasts 9.6 billion meticais spending on displaced people in 2021

2:20 CAT | 18 Nov 2020

Photo: O Pais

The amount is almost double this year’s allocation for assistance to the internally displaced in Cabo Delgado. In addition to conflicts in both the north and centre of the country, Covid-19 is putting pressure on the 2021 state budget proposal.

The Minister of Economy and Finance Adriano Maleiane was in parliament on Monday, presenting the 2021 State Budget proposal.

The two aspects which most influence the budget proposal are the conflicts in Cabo Delgado and in the centre of the country, and Covid-19.

Just to provide an insight, while expenditure on the displaced victims of the insurgency this year stands at around 5.6 billion meticais, in 2021 it will rise to 9.6 billion meticais [around US$130 million, at current exchange rates].

“The state is working towards supporting these families of five to 10 people. The INAS [National Institute of Social Action] is working towards this. That is why we are saying that the budget for 2021 to support internally displaced persons (IDPs) will be 9 billion meticais,” Minister Maleiane revealed.

The minister added that the state was currently supporting about 580,000 families, and that the number of people in need of state support had increased because of Covid-19. There are over 800,000 (families) for which a solution needs to be found.

Still in the wake of the impact of military conflicts and Covid-19, expenditure projected for the defence sector throughout the whole of 2020 was spent in just six months, and Covid-19 had forced the government to use unanticipated funds for this purpose.

The conflicts in Cabo Delgado and in the centre of the country and Covid-19 have also put strong pressure on the revision of the 2020 budget, and determined that the country’s growth be revised downwards from 2.2% (the initial forecast) to 0.8%.

Nevertheless, there are good prospects for economic growth in 2021. Gross domestic product is expected to grow by 2.1%, inflation to stand at 5%, and exports to reach 3.7 billion meticais with Net International Reserves standing at 3.2 billion meticais.

Minister Maleiane said that, by then, we would know how to live with Covid-19 without bringing the economy to a standstill.

“Covid-19 will not disappear, but at least we will have a vaccine in 2021, and we will have to learn to live with the disease and not stay at home as we are doing today,” he said.

Minister Maleiane conceded however, that there was some risk of delay in the roll-out of the Covid-19 vaccine, but said that the focus on agriculture (which should result in greater production) and the broadening of the revenue base would be among the sources of growth in the national economy.

2012 State Budget

State expenditure in 2021 is expected to stand at 368.5 billion meticais [around 5.2 billion, at current exchange rates], an increase of 23.2 billion meticais compared to 2020.

“Of the amount foreseen for state expenses, 238.2 billion meticais corresponds to operating expenses, 83.7 billion to investment expenses and 46.5 billion to state financial operations,” the Executive State Budget proposal to which O País has had access reads.

In the same proposal, new hirings are foreseen for priority areas such as education, health and agriculture: 17,180 new employees are expected to be hired, at a cost of 2.7 billion meticais. [around US$365.8 million at current exchange rate ].

By José João

Source: O País