Mozambique: Indirect state administration – Non-viable institutions will be terminated or merged

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Mozambique: Indirect state administration – Non-viable institutions will be terminated or merged

11:37 CAT | 12 Mar 2025

File photo: Noticias

Institutions of indirect state administration, such as institutes and public funds, that are unable to generate sufficient revenue to support their own operation may be extinguished or merged, to alleviate pressure on the state budget.

Work is currently underway to gather information relevant to the financial sustainability of institutions with a view to identifying those that are facing difficulties generating revenue to sustain their activities.

The exercise is being carried out by the Ministry of Finance, with the expectation that there will soon be a basis for implementing reforms.

The measure essentially aims to relieve pressure on the state budget, allowing the resources that are now channelled towards the operation of these institutions to be applied in essential areas. According to an official letter signed on February 26 by the permanent secretary of the Ministry of Finance, Domingos Lambo, to which ‘Notícias’ has had access, an opening was also created for the presentation of proposals for the merger and extinction of non-viable institutions for the purpose of their integration into the direct administration of the state.

During the formation of his government, President Daniel Chapo called for the adoption of spending containment policies with a view to directing more money to priority areas. The need for reforms to alleviate spending, especially those related to some companies in the state business sector, is being considered, in a context of pressure on public accounts, with the aggravating factor of the existence of a significant budget deficit.

It was in this sense that in 2018 it was decided to merge the companies Telecomunicações de Moçambique (TDM) and Moçambique Celular (mCel), which were facing treasury and sustainability problems, thus creating Moçambique Telecom, Sociedade Anónima (Tmcel).

In the same vein, in 2021 the executive also extinguished the company Correios de Moçambique and dissolved the Mozambican Mining Exploration Company.

Source: Noticias