Maputo, 9 May (AIM) – The Mozambican government’s macro-economic targets for this year include an economic growth rate of 2.9 per cent, according to Prime Minister Benvinda Levi.
Speaking on Friday in the Mozambican parliament, the Assembly of the Republic, where she introduced the government’s plan and budget (PESOE) for 2025, Levi said the government expects the extractive industry to grow by 5.4 per cent, construction by three per cent, agriculture, livestock and forestry by three per cent, and transport and communications by 2.6 per cent.
Levi said the government hopes to keep the annual inflation rate to around seven per cent. This would be a significant increase in inflation. According to the National Statistics Institute (INE), the annual inflation rate was 4.74 per cent in February and 4.77 per cent in March.
The target for exports of goods and services is that they should reach 8.4 billion US dollars. The government hopes for a flow of 5.1 billion dollars in foreign direct investment, and net international reserves should cover 4.7 months of import of non-factor goods and services, excluding the megaprojects.
The government regards guaranteeing political and social stability as crucial. To achieve this, it will “consolidate the dialogue with political parties, civil society organisations, and religious denominations, and will strengthen public security”.
The government pledges to “continue training and equipping the defence and security forces”, but Levi gave no figures.
She promised that rural extension services will be provided to more than 1.2 million households and that over 450,000 farmers will be granted access to means of production.
Over the year there will be about 600,000 new connections to electricity, some within the national grid, some in systems outside the grid.
More than 200 kilometres of national and regional roads will be paved and rehabilitated, Levi promised. Two new bridges will be built and maintenance work will be undertaken on 14 others.
In education, 12 new secondary schools will be built and 214 primary school classrooms.
40 new water supply systems will be built and 520 water sources (such as boreholes and improved wells) will be opened.
PESOE 2025 will require public expenditure of 513 billion meticais (about eight billion dollars, at the current exchange rate). State revenue, however, is only expected to reach 386 billion meticais. That leaves a deficit of 127 billion meticais, to be covered by foreign and domestic loans and grants.
“To ensure more efficient allocation of the few resources the country possesses”, said the Prime Minister, “we shall continue to bank on fiscal consolidation through measures that guarantee expansion of the tax base, the rationalisation of public expenditure, and increased investment in infrastructures and social sectors”.
She promised that the government “will continue to create conditions for greater involvement and active participation of private business in the economy, creating more jobs and income for Mozambicans”.
She added that the government will “strengthen the institutional capacity of the Tax Authority in order to improve its efficiency and effectiveness and modernise digital tax collection mechanisms”. This should make it possible to tax those tourism and other businesses who sell their services online.
PESOE-25, Levi stressed, had been drawn up “bearing in mind the envelope of possible resources”. The scarcity of resources “demands redoubled discipline in executing the budget”.
(AIM)
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