Prime minister advocates action to contain rising cost of living

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Prime minister advocates action to contain rising cost of living

4:40 CAT | 21 Jul 2016

TVM / Prime Minister Carlos Agostinho do Rosário

Mozambican Prime Minister Carlos Agostinho do Rosario yesterday advocated immediate measures to contain the rising cost of living and stressed the need to increase domestic production to reduce external dependence.

“In addition to measures having immediate impact, the government has also been taking structural measures to alleviate the cost of living,” Agostinho do Rosario said during question time in parliament yesterday, while acknowledging year-on-year aggregate inflation of 19.7 percent.

“To clarify: we do not produce enough to meet our basic needs, so we systematically resort to importing goods and services, causing strong pressure on the metical against the US dollar,” said the prime minister.

The shortage of foreign currency in Mozambique is due, he continued, to the reduction in export revenues (which is in turn due to the fall in value of the raw materials the country sells), reduced foreign direct investment and the decline in financial assistance from cooperation partners.

Natural disasters and attacks in the centre of the country blamed by the authorities on the armed wing of the Mozambican National Resistance (Renamo), the country’s main opposition party, are also factors in the difficult economic situation facing the country.

According to the prime minister, the executive is committed to protecting the country from cyclical crises by promoting actions aimed at increasing productivity, diversifying and expanding the Mozambique’s production base and investing in the construction and rehabilitation of infrastructure.

“The government encourages and seeks to incentivise the private sector to invest in increasing the production of export goods, to take advantage of the current exchange rate depreciation,” he said.

Source: Lusa