Municipal Elections will put more pressure on public expenditure

Maputo, 9 Jun (AIM) – The Bank of Mozambique envisages more pressure on public expenditure because of the Municipal Elections scheduled for 11 October and the ongoing implementation of the Single Wage Table (TSU).

According to the latest report from the central bank on the Economic Environment and Inflation, in recent months, mainly in the first quarter, there has been an increase in public expenditure, especially operating expenditure.

According to the National Elections Commission (CNE), the Municipal Elections in 2023 and the General Elections, which will take place in 2024, will cost 18.7 billion Meticais (almost 300 million dollars at the current exchange rate).

“The execution of the State Budget in the first quarter of 2023 shows that the increase in current expenditure, partly associated with the implementation of the Single Wage Table (TSU), was determinant for the increase in total State expenditure, in a context in which capital expenditure declined”, reads the report.

In the first quarter of 2023, says the document, total expenditure grew by 22 percent, standing at 105.8 billion meticais against 86.5 billion meticais in the same period of 2022. Within the total expenditure, current expenditure (notably wages) grew by 16 percent, standing at 77.5 billion Meticais against 66.6 billion meticais spent in the first quarter of 2022.

Based on these data, it appears that the government spent an average of 25.8 billion Meticais per month, compared to 22.2 billion Meticais in the same period last year.

However, if on the one hand the operating expenditure of the state machine grew, capital expenditure fell dramatically. The Central Bank Report shows that in the first quarter of 2023, the Government invested 4.9 billion meticais, a figure that represents a drop of 28 percent if compared with the same period of 2022, when 6.9 billion meticais was invested.
“Until the close of the year, the pressure on current expenditure is expected to remain high, due to the increased needs related to the impacts of climate shocks and elections”, reads the document.
(AIM)
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