Mozambique’s 2019 budget will focus on priority social sectors – government

Login

Register

http://www.clubofmozambique.com/

Mozambique’s 2019 budget will focus on priority social sectors – government

1:43 CAT | 03 Oct 2018

TVM

The Mozambican government intends to give priority to social sectors in the 2019 State Budget (OE), announced yesterday the Minister of Economy and Finance, Adriano Maleiane.

“The budget continues to be social,” the minister said in a meeting with journalists in Maputo, where he indicated that the health, education and infrastructure sectors accounted for 45% of the funds for the priority sectors, which in turn represent more of half of the State Budget proposal.

This is the last year of the current administration’s governance – the general election is scheduled for October 15 – and so it is also an “end of cycle” document in which efforts will be made to achieve the goals set at the beginning of the mandate, the minister said.

The overall deficit (as a percentage of GDP) is expected to increase from 8.1% this year to 8.9% in 2019, mainly due to increased spending on elections and the start-up of investments in natural gas, he explained.

In 2017, according to the general state accounts, the deficit was 4.6% of GDP.

The draft 2019 State Budget highlights measures to contain public spending, three of which are intended to contain payroll, which continues to account for 55% of tax revenue, above the Southern Africa average, Maleiane said.

There will only be new hirings in the health, education and agriculture sectors. In the remaining sectors there will be only one new admission for every three vacancies, and priority will be given to mobility of personnel within the public administration.

To improve tax collection, there would be a review of the specific regimes of taxation and fiscal benefits of oil operations and of mining activity and the sealing of tobacco and beverages, and the implementation of a tariff to fund the fuel marking service.

Maleiane is optimistic about the future, and already looking forward cautiously to natural gas revenues in the next decade.

ALSO READ: Mozambique: Debt restructuring only likely in 2021 – Consultants

The Mozambican minister mentioned the diversification of the economy and urgent measures to manage demographic growth, in a context in which the Mozambican population is expected to grow 2.61% to 28.5 million people in 2019.

The 2019 Draft State Budget foresees internal revenue of MZN 249.501 billion (EUR 3.58 billion) for a total expenditure of MZN 340.414 billion (EUR 4.885 billion).

The resulting deficit of 90.912 billion meticais (EUR 1.304 billion) will be financed by 27.740 billion meticais of external aid, 43.724 billion meticais of external credit and 19.447 billion meticais (EUR 279 million) of internal credit.

In nominal terms, the deficit grows by about 10 billion meticais (EUR 142 million Euros), which corresponds to the approximate increase of the amount of external donations foreseen for next year.

Source: Lusa