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Financial Support Keeps 110,000 Families Producing Cotton

Financial Support Keeps 110,000 Families Producing Cotton

The financial support made available to the country in response to the covid-19 crisis has enabled around 110,000 families to continue cotton production.

In its latest Monitoring Report on the Financial and Physical Implementation of funds allocated in response to the covid-19 crisis in Mozambique between March 2020 and December 2021, the Ministry of Economy and Finance (MEF) states that during this period, the food security of 20,000 families was ensured through a line of funding of 690 million meticais for Small and Medium Enterprises (SMEs) in the agricultural sector.

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The MEF explains that the economic and financial consequences of the covid-19 pandemic have increased uncertainty and reduced expectations of a rapid economic recovery following the devastating impact of tropical cyclones Idai and Kenneth in 2019.

“The impact of covid-19 influenced the performance of the national economy by registering a negative change of -1.2%, the first in nearly three decades. This contraction of the economy is due to reduced extractive industry output, falling commodity prices and the impacts of social and economic constraints,” it stresses.

The source also states that fiscal and budgetary measures have been taken as a result of obtaining additional resources for the different sectors, with emphasis on health, allowing the direct fight against the pandemic.

The MEF adds that the impacts of the crisis caused by the pandemic have also been cushioned, reducing the costs faced by families in accessing basic necessities (sugar, cooking oils and soaps) with the exemption of Value Added Tax (VAT at 17%).

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“Resources have also been freed up to maintain jobs at the company level with measures relating to the waiver and/or deferral of tax payments, and the continuity of the activities of municipalities and the regular operation of transport companies have been ensured through additional funding,” he points out.

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