Maputo — The Mozambican government has set targets for a seven per cent growth in Gross Domestic Product in 2009, and for an annual inflation rate of no more than eight per cent.

These targets are included in the Economic and Social Plan for 2009, and the accompanying State Budget, which were approved at a cabinet meeting on Saturday. They must now be approved by the country's parliament, the Assembly of the Republic, at its end of year sitting.

Speaking to reporters after the meeting, Finance Minister Manuel Chang said commodity exports in 2009 should reach a value of over 2.9 billion US dollars, which is an 8.9 per cent increase on the projected figure for this year. The plan also envisages maintaining net international reserves at a level that can sustain five months of imports (excluding those for mega-projects). Chang said the government would pursue its efforts to build a climate ever more favourable for investment, but while safeguarding the environment, and the quality of services provided to the public in the areas of health, education, water and sanitation, roads and electricity.

The government has also pledged to continue decentralising budget management down to the districts, including the decentralisation of public sector wages.

Asked about the cuts in direct budget support announced by Sweden and Switzerland, Chang said this would not affect the activities planned by the government.

The cabinet also approved a bill on a simplified tax for small scale taxpayers. This is a direct tax on petty trading, and small scale agricultural and industrial activities, and is supposed to draw the informal sector into the tax net. The government claims it will be simpler to operate than the current incomes and profits taxes.

This bill, said Chang, is aimed to reduce the costs of collecting taxes from small taxpayers, and to make it easier for them to comply with their tax obligations. He hoped the new tax would help informal businesses move into the formal sector.