The Government has acknowledged that decentralised governance requires “deep and consistent reforms,” particularly in public finances, to ensure that implemented policies effectively address the population’s challenges.
“The consolidation of this process continues to require profound and consistent reforms in the field of public finance, ensuring that the transfer of powers and responsibilities to decentralised levels is accompanied by adequate financial, institutional, and human resources to respond efficiently and effectively to the needs of the population,” said the Permanent Secretary of the Ministry of Finance, Albertina Fruquia.
Speaking in Maputo during the opening of the conference presenting the “Study on Fiscal Decentralisation in Mozambique,” the official also highlighted significant progress made in the country since the beginning of decentralisation implementation. She added that it is necessary to “create a mechanism responsible for supervising the intergovernmental transfer system, ensuring greater predictability, transparency, monitoring, and integrity in the management and distribution of public resources.”
According to Lusa, the study was carried out by the US-based Georgia State University with support from the World Bank. It proposes a revision of revenue-sharing formulas and the creation of specific grants for social sectors based on objective criteria such as population, poverty, territorial needs, and institutional performance, in order to reduce regional inequalities and promote greater territorial cohesion.
Regarding the reforms, the report presents different approaches, ranging from adjustments in State representation to more structural reforms, including the possibility of harmonising and rationalising districts and municipalities to optimise local governance, improve administrative efficiency, and reduce operational costs.
Recently, the Assembly of the Republic (AR) unanimously and definitively approved the revision of the principles, organisational rules, powers, and functioning of provincial decentralised governance executive bodies, aiming to correct identified shortcomings and strengthen their effectiveness.
The proposal was submitted urgently by the President of the Republic, Daniel Chapo, following the commitment made during his inauguration speech in January 2025. The initiative seeks to restructure State representation bodies in the provinces.
According to documents accompanying the proposal, prepared by decentralisation experts, inconsistencies were identified after more than five years of implementing these bodies. These findings led the Government to conduct an in-depth assessment of their functioning.
In January, the “Fiscal Risks of Local Authorities 2019–24” report, prepared and published by the Ministry of Finance, stated that the weak capacity to collect own-source revenues and dependence on transfers from the Central Government are the main fiscal risks facing local authorities in Mozambique.
“The main fiscal risks identified include the low capacity to collect own revenues, high expenditure on payroll, lack of financial autonomy and dependence on transfers from the Central Government, as well as exposure to excessive indebtedness resulting from delays in the payment of debts to suppliers and instalments of contracted loans,” the report stated.
