2 September 2008
Maputo — The Mozambican government envisages increased tax revenue over the coming three years that will allow it to reduce its dependence on foreign grants and loans, the government spokesperson, Deputy Education Minister Luis Covane, told reporters on Tuesday.
Currently 54.3 per cent of the state budget is funded out of foreign aid. Covane said that the Medium Term Fiscal Scenario (2009-2011), discussed at a cabinet meeting on Tuesday morning, envisaged that next year domestic revenue will cover exactly 50 per cent of the budget, rising to 55.7 per cent of state expenditure in 2011.
Total state expenditure this year is budgeted at 90.2 billion meticais (about 3.7 billion US dollars). The reduction in dependency on foreign aid would come about because domestic state revenue is projected to rise from 38.8 billion meticais this year to 44.5 billion in 2009 and just over 60 billion in 2011.
"The state will be capable of raising more revenue", said Covane. "This is not going to overburden the taxpayer, but the tax base will be widened, and more investments will be attracted".
Covane forecast an increase in Gross Domestic Product (GDP) of seven per cent a year, and that government revenue would grow by 0.5 per cent of GDP per year. As for annual inflation, the government target is to bring it down to seven per cent in 2009, 6.4 per cent in 2010, and 6.2 per cent in 2011.
Covane admitted that government expenditure will be under pressure from the investment needed for the 2008-2011 food production plan, from next year's general elections, from the current reform of public sector wages, and from possible increases in international fuel prices.
At the Tuesday meeting, the government also approved a further oil exploration contract for the Rovuma Basin in the far north of the country. Two blocks have been awarded to a consortium between the Malaysian state oil company Petronas (with 90 per cent), and Mozambique's publicly owned hydrocarbon company ENH (10 per cent).
The exploration period is eight years. If oil is found in commercially viable amounts, Petronas will have a concession to exploit it for 30 years.
ENH has also been granted an oil exploration and production contract on the Buzi block, in central Mozambique, where natural gas reserves (of between 10 and 17 billion cubic feet) are already known to exist. This ENH contract is valid for 25 years.
Be the first to Write a Comment!
Copyright © 2008 Agencia de Informacao de Mocambique. All rights reserved. Distributed by AllAfrica Global Media (allAfrica.com). To contact the copyright holder directly for corrections — or for permission to republish or make other authorized use of this material, click here.
AllAfrica aggregates and indexes content from over 125 African news organizations, plus more than 200 other sources, who are responsible for their own reporting and views. Articles and commentaries that identify allAfrica.com as the publisher are produced or commissioned by AllAfrica.
