Mozambique: Parliament approves amending budget as impact of pandemic felt

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Mozambique: Parliament approves amending budget as impact of pandemic felt

2:05 CAT | 11 Nov 2020

Image: DW

Mozambique’s parliament on Tuesday approved an amending state budget for this year that increases spending on the country’s defence and security forces and the fight against Covid-19, even as it reduces the official forecast for economic growth to 0.8%, from the previous from 2.2%.

The bill was approved with 171 votes in favour of the 184 members for the governing Frelimo party, with 35 votes against from the main opposition party, Renamo, and another three against from the third-largest party, the MDM.

“The proposed revision aims at incorporating the financial impact of the pandemic in the State Budget, taking into account the National Preparedness and Response Plan for Covid-19 that the country is implementing, which aims at minimising the impact of the disease in the economic and social sphere,” reads a document supporting the amending budget.

The bill “also aims to incorporate the additional expenditure for defence and security forces arising from instability in some areas of Cabo Delgado and the central region of the country,” it adds.

An amending budget was needed corrected because state revenues are seen falling from the originally foreseen 235,590 million meticais (€2.7 billion) to 214,141 billion meticais, while “public expenditure should grow from 345,381 billion meticais to 374,096 billion meticais”.

The deficit is now set to swell to 17.9% of gross domestic product, or 7.1 percentage points more than foreseen in the state budget approved in April – with two thirds of the shortfall expected to be covered by foreign and domestic borrowing and the rest by donations and balances carried forward of capital gains.

“The proposal aims to incorporate additional domestic financing by increasing the use of capital gains balances and domestic credit, as well as external resources resulting from aid partners’ commitments to support the prevention and combating of Covid-19,” the amending budget document adds.

Mozambique has so far reported 13,892 cases of the novel coronavirus that causes Covid-19, with 84% of patients already deemed to have recovered, and 99 deaths associated with the disease.

In Cabo Delgado province, in the north of Mozambique, an armed insurgency that began in 2017 and intensified this year has meanwhile claimed between 1,000 and 2,000 lives and displaced 435,000 people.

The Islamic State group has claimed responsibility for some attacks since last year, but how the insurgency began is still under debate. The region is the site to the largest private investment currently underway in Africa: around $25 billion, for the extraction and liquefaction of natural gas for export.

In the centre of the country, in the provinces of Sofala and Manica, the self-styled Renamo Military Junta, a dissident group of members of the main opposition party, is accused of carrying out armed attacks on buses and private vehicles on some stretches of highway that have claimed at least 30 lives.

The group is contesting the legitimacy of the Peace and National Reconciliation Agreement signed by the government and Renamo in 2019, and also opposes the current Renamo leadership.

Source: Lusa