Mozambican government to subsidise staple products

8 September 2010

Maputo, Mozambique, 8 Sept – The Mozambican government Tuesday in Maputo announced the “immediate” freezing of new process for rice, bread, water and electricity, rises of which last week led to incidents in some of the country’s cities.

At the end of an extraordinary meeting of the Council of Ministers, the Minister for Planning and Development, Aiuba Cuereneia, announced a reduction of 7.5 percent on the price of third rate rice, via reduction of customs taxes on the product and suspension of the import surcharge on sugar.

The government also decided to keep tax incentives in place on potatoes, tomatoes, onions and eggs, by setting prices at below real cost of customs taxes and Value Added Tax (IVA).

Amongst other measures, Cuereneia also said the Council of Ministers had decided to freeze salaries and benefits for government members and boards of directors of state companies.

The minister also said that in the near future no new public institutions would be set up, which are an expense for the general state budget, more than half of which is dependent on donations from foreign countries and international organisations.

On 1 September a demonstration brought the cities of Maputo and Matola to a halt for three days, causing huge human and material damage. (macauhub)