Mozambique state budget foresees EUR227 million in foreign debt interest repayments in 2017

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Mozambique state budget foresees EUR227 million in foreign debt interest repayments in 2017

2:46 CAT | 08 Dec 2016

Mozambique’s 2017 state budget, presented yesterday by the government to parliament, provides for the payment of 18 billion meticais (EUR227 million) in interest on external debt.

To this is to be added 8.9 billion meticais (EUR112 million euros) in interest payments on domestic debt, raising debt burden 1.2 percentage points to 3.4 percent of gross domestic product.

The bill submitted to parliament makes no mention of the EUR2.2 billion so-called hidden debts that Armando Guebuza’s government contracted between 2013 and 2014.

The 2017 state budget provides for expenditure of more than 272 billion meticais (EUR3.5 billion) and a budget deficit of 10.7 percent of GDP.

The government assumes that external loans will cover the largest share of this deficit, with a contribution equivalent to 6.3 percent of GDP, followed by domestic credit, with 2.6 percent of GDP, and donations making up 1.7 percent of GDP.

“The budgetary framework for 2017 shows an increase in the availability of financial resources through the increase in state revenue from 68 to 68.4 percent in proportion to total resources,” the document presented yesterday by Minister of Economy and Finance Adriano Maleiane reads.

The government forecasts economic growth in the order of 5.5 percent, compared with the 3.9 percent estimated this year, and projects an inflation rate of 15.5 percent against 18 percent this year.

Of the total expenditure foreseen, more than 156 billion meticais (about EUR 2 billion), or about 19.5 percent of GDP, will be channelled into the functioning of the state, and around 80.4 billion meticais (over EUR 1 billion), corresponding to 10 percent of GDP, into investment.

Expenditure on manpower will absorb the largest share of operating expenditure (49.4 percent), followed by expenditure on goods and services, at 3.4 percent of GDP.

The 2017 state budget notes that both operating and investment costs are down from 2016, reflecting the austerity approach in state finances.

Source: Lusa