Maputo, 29 Sep (AIM) – A debt exceeding 800 million meticais (12.5 million US dollars at the current exchange rate) has been compelling the Municipality of Pemba, in the northern Mozambican province of Cabo Delgado, to make financial reforms aimed at boosting revenue collection capacity.
The information was shared by Satar Abdulgani, Mayor of Pemba, when he was interviewed by AIM on the sidelines of the 6th Ordinary Session of the National Coordination Council.
According to Abdulgani, the current administration inherited a debt exceeding 800 million meticais, which constrains the municipality’s management, despite revenue collection having grown to over 150 million meticais annually.
“The municipality of Pemba is one of the most indebted municipalities in Mozambique. However, the digitization of processes and the expansion of the tax base have allowed for a significant increase in the collection of municipal taxes and fees”, he said.
According to the mayor, revenue collection has grown by more than 200 percent compared to previous terms. However, these figures do not represent solely cash revenue as “part of the total stems from mechanisms to offset obligations between the municipality and third parties.”
By way of example, he explained that if an entity owes the municipality 10 million meticais, while the municipality owes seven million to that same entity, the two obligations can be offset against each other. “This allows the municipality to recognize 10 million in revenue and reduce its own debt by seven million, leaving a remaining balance of three million.”
According to the mayor, the current revenue-generating capacity has made it possible to cover essential expenses.
“Since the start of the current term in 2024, the Municipality of Pemba reports no delays in salary payments. We have never had a single month, not even one, of delay in salary payments”, he said.
He also explained that the municipality is preparing to publish a list of debts that lack complete administrative files. “Alleged creditors will have 30 days, as provided by law, to present documents supporting their claims. Otherwise, the files may be submitted to the Municipal Council for write-off,” he warned.
For debts that have been duly recognized, the municipality has adopted a gradual repayment plan. It currently allocates a monthly sum of over three to four million meticais to pay third parties, including monthly agreements ranging from 300,000 to 600,000 meticais with various creditors.
Abdulgani also revealed that the municipality engaged external entities, specifically Ernst & Young and KPMG, to evaluate its financial model. “Municipality is open to audits by competent public institutions, including financial oversight bodies and the Administrative Tribunal, the body responsible for checking the legality of public expenditure.”
“This mechanism is vital for strengthening transparency and the management of municipal finances”, he added.
(AIM)
Pc/Am/
