19 December 2008
Maputo — The Mozambican government's proposed budget for 2009 relies on foreign aid for 55 per cent of its expenditure.
The budget, introduced in the country's parliament, the Assembly of the Republic, on Friday by Finance Minister Manuel Chang, envisages state revenue from taxes and other domestic sources of 46.2 billion meticais (about 1.85 billion US dollars).
Since government expenditure for 2009 is put at 104.3 billion meticais, there is a deficit of 58.1 billion meticais that must be covered by foreign grants and loans.
The situation is in fact rather better than this. The Assembly's Plan and Budget Commission (CPO) detected a mistake in the government's figures, concerning capital expenditure in the health sector. This pushes total expenditure down to 98.1 billion meticais, and the deficit down to 51.9 billion meticais.
If the CPO's calculations are correct, then 53 per cent of the budget must be covered by outside funding, rather than the 55 per cent announced by Chang.
The minister noted that the target for state revenue in 2009 is a 9.5 per cent increase on the figure for this year. He said the increase is possible thanks to "the gains provided by macro-economic stability, and by the continued growth in the efficiency and effectiveness of tax and customs administration".
Tax revenue should reach 37.2 billion meticais (a 10.9 per cent increase on the 2008 figure). Taxes on incomes and profits will reach 12.4 billion meticais, and taxes on goods and services should reach 22.7 billion meticais.
43.5 billion meticais of expenditure is to cover the state's running costs. The remaining 54.6 billion meticais is capital expenditure, and most of it must, as in previous years, be met by foreign aid.
The budget will allow the state to recruit 16,000 new staff. Of these the great majority - 12,000 - are teachers. 1,200 are health workers, and 1,600 are for "security and public order" - essentially police recruits.
The priority areas for the government's Action Plan for the Reduction of Absolute Poverty (PARPA) - which include education, health, infrastructures, agriculture, governance and public order - are allocated 68.7 per cent of total expenditure, excluding debt servicing and financial operations. This is a significant increase on the 65.5 per cent allocated to the priority sectors in the 2008 budget.
The percentage of expenditure allocated to education rises from 18.5 to 19.5 per cent, on health from 11.9 to 14.9 per cent., and on agriculture and rural development from 3.9 to 7.3 per cent.
Expenditure on infrastructures falls from 21.2 per cent of the 2008 budget, to 17.1 per cent of the proposed budget for 2009 - this is mostly a fall in the share allotted to roads from 11.4 to 7.9 per cent.
The judiciary sees its share of the budget rise slightly from 2.4 to 2.5 per cent, while expenditure on security and public order (mainly the police) slips from three to 2.9 per cent.
Debt servicing has fallen to 1.4 billion meticais, compared to 1.65 billion in the 2008 budget - a decline from 1.85 to 1.43 per cent of the total budget. This is largely because the state did not issue any domestic debt. in the shape of treasury bonds, in the first six months of this year.
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