Mozambique prepares austerity plan

13 June 2016

The government of Mozambique is preparing an austerity plan to reduce public expenditure written into the State Budget by 10 percent, the Minister of Economy and Finance announced recently.

Minister Adriano Maleiane, who addressed members of parliament, said this plan “is the government’s response to covering the hole in the budget created by the suspension of support from cooperation partners, because of hidden debt, as well as the shrinking of the national economy, which led to downward reviews of GDP forecasts.”

The minister gave assurances that the austerity measures would not affect social areas such as education, health and social work, or actions aimed at reviving the economy through investment in agriculture and infrastructure.

The amount of expenditure to be cut is twice the amount of revenues put on hold by cooperation partners organised in the Group of 14, totalling US$467 million for the 2016 budget.

Simultaneously, the government intends to strengthen fiscal transparency and internal control measures, together with austerity, as the first signal the government is sending to international lenders, including the International Monetary Fund (IMF), which will send a mission to the country for talks and evaluation. (macauhub/MZ)