Maputo, 30 May (AIM) – The International Monetary Fund (IMF) has claimed that the Mozambican government is spendings 73 percent of the taxes and fees it collects from Mozambican citizens to pay salaries and debts to public employees.
According to the IMF resident representative in Mozambique, Alexis Meyer-Cirkel, who was speaking, on Wednesday, in Maputo, during the presentation of the report on the “Economic Outlook for Sub-Saharan Africa and Mozambique”, of the total public revenue collected by the government, 73 percent is used to pay the salaries of state employees and 20 percent is used to service the public debt.
“73 per cent is used for recurrent expenditure. It’s not investment expenditure, it’s not infrastructure expenditure, it’s not personnel development expenditure, it doesn’t improve the diversification of the economy. This is everything we’ve been talking about, which is necessary to boost the country’s growth and per capita income”, he said.
Meyer-Cirkel claimed that these resources are used by three percent of the employed population, consisting of public servants.
“This three percent of the employed population ends up capturing 73 percent of the tax revenues. This situation makes public expenditure unsustainable, and what is left over after paying wages in the state apparatus and the public debt is almost nothing”, he said.
The wages bill, he said, is unsustainable and absorbs practically all the tax revenue, and “when we look at this, we see that with 73 per cent of tax revenue plus 20 percent of what is paid in debt, the minimum is left, 7 to 8 per cent, to meet the needs of public investment, building schools, roads and paying for goods and services in the business sector.”
“And it’s always good to compare with the region. In the region, we have Zimbabwe, which spends more or less 37.8% of tax revenue on wages, Tanzania 35%, Angola 31%. The Southern Africa Development Community (SADC) average is around 50% and the average for sub-Saharan Africa as a whole is just over 50%,” he claimed.
According to Meyer-Cirkel, whose mission in Mozambique ends in August, a comparison of the situation in Mozambique and sub-Saharan Africa further highlights the problem.
In order to overcome the situation, he said, the IMF recommends that the government comply with the established law.
“At the moment, our recommendation is to bring the wage bill into line with what was agreed at the end of last year as the State Budget law. If this doesn’t happen, we see major risks for the sustainability of this wage bill, for fiscal sustainability”, he said.
As a result of the alleged violation of the budget law, Meyer-Cirkel said, the IMF finds it difficult to continue supporting the country in economic recovery, good governance reforms and public finance management.
“The excesses of what had been budgeted, especially with regard to the wage bill, that worries us a lot. As I said, this could jeopardize our ability to continue with this current review”, he threatened.
The three per cent of the economically active population who so concern the IMF official are not civil servants in the normal sense of the term. They are mostly teachers and health staff, without whom the education and health service could not possibly operate.
(AIM)
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