Mozambique to subsidise public transport passengers

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Mozambique to subsidise public transport passengers

2:06 CAT | 01 Jul 2022

File photo: DW

The Mozambican government will grant a subsidy to passengers on urban public transport in the country for a period of six months, with a view to mitigating the impact of the global increase in fuel prices, a source in the executive told Lusa on Thursday.

According to the same source, the measure was revealed by the President of the Republic, Filipe Nyusi, in response to questions raised by businesspeople from the centre of the country at a meeting in the city of Beira.

The global inflationary pressure generated by the war in Ukraine, at a time when companies are trying to recover after the restrictions caused by the Covid-19 pandemic, were part of the Beira discussion.

The allocation of the subsidy to passengers “is being worked on by the transport sector” and the operationalization of the measure should be revealed soon, the head of state said.

The executive also decided to reduce part of the import costs with a final impact on consumers by six meticais for gasoline and eight meticais for diesel, the same government source told Lusa.

Filipe Nyusi signalled to businesspeople that the measures would involve reallocation of resources and oblige the state to reinforce measures to rationalise expenditure.

Year-on-year inflation in Mozambique stood at 9.31% in May, the highest value in the last four years and seven months, and hitting a new maximum for the period, as had already happened in April.

The rise seen since the beginning of the year is in line with all forecasts and with the global inflationary climate.

Based on May data, Standard Bank updated the scenario of price rises in Mozambique and now expects year-on-year inflation in double digits, reaching 11.7% at the end of the year.

“Inflation reflects the higher costs of imported food and fuel, aggravated by the Russia-Ukraine conflict,” the bank explains, noting that both food and transport are about 13% more expensive than a year ago. The price of fuels alone has increased by 33%, Standard Bank points out.

Source: Lusa