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Twitter (Courtesy photo) / Prime minister Carlos Agostinho do Rosario adresseing the Financial times Investment Summit in Maputo
Mozambican Prime Minister Carlos Agostinho do Rosario declared on Thursday that the financial crisis facing the country has led the government to improve the management of the public debt.
He was speaking in Maputo at the opening of an investment conference promoted by the British newspaper, the “Financial Times”, on the theme “Reducing the Risk of Investment through Good Business Practices”.
Rosario pointed to other lessons the country had learned from the financial crisis that engulfed it in 2016, including “the need to strengthen the sustainability of fiscal and monetary policy as the foundation of macro-economic stability”.
“We cannot guarantee the sustainability of the public debt unless we have clear parameters for the contracting of loans and the allocation of resources, and without strengthening trust with our creditors”, added the Prime Minister.
He said the government is strengthening mechanisms of resilience in the economic system to guarantee that the growth of the economy occurs in an environment of macro-economic stability.
“This lesson arises from the fact that our economy has become vulnerable to exogenous shocks, due to the concentration of its base of export revenue in a limited number of major projects, plus the weak development of infrastructures to confront the effects of climate change”, Rosario said.
To meet this challenge, he continued, “we have been implementing measures to diversify the productive base, in which we are banking on agriculture, energy, tourism and infrastructures. These are the areas of concentration to boost our efforts to make operational the government’s Five Year Programme for 2015-2019”.
Alongside these measures, and with the support of the International Monetary Fund (IMF), the government has set up a Risk Management Office, the main task of which is to analyse financial and fiscal risks, and those risks arising from the public companies and other companies in which the state owns shares, as well as to monitor the evolution of the public debt portfolio.
“We believe that with the visible results of the peace we are living through, the macro-economic stability and the implementation of reforms to improve the business environment, we have entered a new economic cycle”, declared Rosario.
He believed that economic growth is picking up and that growth in 2017 will be around 4.7 per cent. “This dynamic in our economy leads us to forecast that, as from 2019, we shall resume annual growth levels of six to seven per cent”, said the Prime Minister.
For 2018, he predicted average 12 monthly inflation of 11.9 per cent, and was optimistic that this would allow a reduction of interest rates in the banking system.
“However, we recognise that inflation still remains high, which challenges us to continue implementing measures in order to bring it down to levels of one digit”, he added.Source: AIM