: Companhia mineira suspende actividades na província de Manica
Maputo, 21 Oct (AIM) – The prominent anti-corruption NGO, the Centre for Public Integrity (CIP), believes that the government’s plan to use revenues from the extractive industry to fund funding the Mozambique’s Development Bank of (BDM) may increase pressure on the State Budget.
The organization’s reaction follows a regulation pointing out that a percentage of State revenues from the extractive sector must be channeled to the BDM. The BDM may also be funded by a portion (25%) of the investment portfolio derived from social security contributions, as well as by resources from institutions within the State’s indirect administration and the State-owned enterprise sector.
According to CIP, funding the BDM from extractive sector revenues may reduce the resources available within the State Budget, which are aimed at directly financing other public investment priorities.
“Although the regulation establishes certain safeguards, it leaves two issues unaddressed. First, it does not explicitly identify which revenue items constitute the calculation base, nor does it set criteria for determining the annual percentage of extractive industry revenues to be allocated to the BDM. Second, it fails to clarify how the transfer of extractive sector revenues to the BDM”, reads the document.
The organization believes that this lack of clarity could lead to the creation of two separate channels for financing public investments using resources from the same source without any clear demonstration of the advantages of keeping them separate.
“Allocating a specific percentage of revenue to a particular entity constitutes ‘earmarking’ (or the assignment of specific revenues), which serves as an exception to the principle of non-earmarking enshrined in the SISTAFE Law. The cost of such an approach lies in reduced budgetary flexibility to reallocate resources among competing priorities. Therefore, any such earmarking must be justified by demonstrable benefits”, reads the analysis.
CIP notes that channeling a portion of extractive industry revenues into the BDM could reduce the funding to crucial sectors, such as health, education, security, social welfare, and infrastructure.
In order to reverse the situation, the organization calls for clarification of the criteria used to determine the annual percentage, integrating the BDM’s financial risks into the State’s fiscal risk management framework, as well as avoiding the duplication of projects while ensuring the efficient use of resources.
Am/
