Municipal elections will put further pressure on public spending in Mozambique – central bank

Login

Register

http://www.clubofmozambique.com/

Municipal elections will put further pressure on public spending in Mozambique – central bank

7:19 CAT | 12 Jun 2023

File photo: Notícias

The Bank of Mozambique says that government spending has been very high in recent months, mainly due to the implementation of the Single Salary Table (TSU), and predicts that pressure on public spending will remain high until the end of the year due to the holding of the sixth round of municipal elections.

This information is contained in the Economic Outlook and Inflation Forecasts Report (CEPI) published last week by the Bank of Mozambique, which reveals that, in recent months, especially in the first quarter, there has been an increase in public expenditure, with an emphasis on operating expenses.

“The execution of the State Budget in the first quarter of 2023 shows that, in year-on-year terms, the increase in current expenditure, in part associated with the implementation of the Single Salary Table (TSU), was decisive for the increase in total state expenditure, in a context in which public investment has reduced,” the report states.

Data contained in the document illustrate that, in the first quarter of 2023, total expenditure grew by 22 percent, standing at 105.8 billion Meticais against 86.5 billion Meticais recorded in the same period of 2022. Within total expenditure, current expenditure (salaries, wages, etc.) grew by 16 percent, standing at 77.5 billion Meticais against 66.6 billion Meticais spent in the first quarter of 2022. Based on these figures, it appears that the Government spent per month 25.8 billion Meticais on average, against 22.2 billion in the same period last year.

While operating expenses grew, investment expenses dropped drastically. The central bank’s report shows that, in the first quarter of 2023, the Government invested 4.9 billion Meticais, a fall of 28 percent compared to the same period of 2022, which was 6.9 billion Meticais .

Overall, public spending is very high, and the central bank expects that it will continue to grow until the end of 2023 because of the municipal elections scheduled for next October.

“Until the end of the year, pressure on current expenditure is expected to remain high, due to increased needs related to the impacts of climate shocks and electoral processes,” the Bank of Mozambique’s CEPI report forecasts.

Information advanced at the end of March 2022 by the National Elections Commission (CNE) indicates that the VI Municipal Elections, scheduled for October 11, 2023, and the VII General Elections, which will take place in 2024, will cost a total of 18.7 billion Meticais.

Source: AIM