Government of Mozambique to channel public savings into reducing cost of living for population

8 April 2011

Maputo, Mozambique, 8 April – The Mozambican government plans to use savings of at least 900 million meticals (around US$30 million) that it expects to make this year, in sectors that will have an impact on reducing the cost of living for the population, said Minister for Planning and Development, Aiuba Cuereneia.

Speaking to Mozambican newspaper, Notícias, the minister said that the funding would be the result of the Finance Ministry not freeing up the obligatory retained earnings required to pay for State goods and services expenditure.

Usually the Finance Ministry retains 10 percent of the budget earmarked for paying for goods and services of public institutions, freeing them up in November and December to finance outstanding payments in this area.

“The government has decided that this retained sum will not be freed up. State institutions will operate with 90 percent of their budget for goods and services,” said Cuereneia, recognising that the measure would require permanent secretaries to be more creative in managing financial resources.

The 900 million meticals do not include cash saved in other components of the state budget, and this figure had yet to be calculated, according to Cuereneia.

The Council of ministers, in a meeting on 7 September, 2010 decided to introduce a number of measures to contain Public spending in order to channel the savings made into initiatives to reduce the cost of living in Mozambique.

These measures included reducing travelling, subsidizing bakers and third rate rice and freezing subsidies in dollars for senior managers of public companies.

In addition to this, last month the government announced other measures including the introduction of the basic basket of goods to benefit people on a low income living in provincial capitals. (macauhub)