The Mozambican Deputy Minister of Economy and Finance revealed this Thursday, 12 October, that the State Budget (OE) for 2024 does not foresee increases for civil servants and foresees economic growth of 5.5%.
Speaking to Lusa in Marrakech, on the sidelines of the Annual Meetings of the International Monetary Fund (IMF) and the World Bank, which are taking place this week in Morocco, Amilcar Tivane said: “We have created provisions in the State Budget for the government to manage wage policy, but we want to ensure the stabilisation of the wage bill,” stressing that “we have already made substantial increases for middle-income brackets and we hope to have returned purchasing power. We don’t expect significant increases” in 2024.
According to the government official, “the decision on an increase can be made, but the increases must not deviate from what is the trajectory of the wage bill,” which Mozambique wants to maintain at its current level.
In this sense, the macroeconomic scenario, according to the Ministry of Economy and Finance (MEF), points to GDP growth of 5.5 per cent, 0.5 points more than the IMF forecast, which estimates economic expansion of 5 per cent in 2024, with public debt consuming almost half of tax revenue.
“The 5.5 per cent target is in line with the progress we’ve seen in the extractive sector, particularly in liquefied natural gas, but it’s not just driven by the dynamics of the gas sector, there are also sectors such as agriculture and the manufacturing industry,” said Amílcar Tivane, admitting that despite economic growth, debt remains one of the country’s main problems.
According to the minister, the government dedicates “just over 40 per cent of tax revenue to servicing the debt. This has grown a lot, absorbing an ever greater proportion of the fiscal space that should be channelled into investments in the country’s development. Hence the consolidation effort” that must be ensured.
“The State Budget is structured to pursue the government’s economic and social policy objectives, fundamentally the creation of conditions to increase fiscal space to support investments that can accelerate the pace of recovery of the Mozambican economy, which has been plagued by multiple shocks in recent years,” concluded Amílcar Tivane, emphasising that the budget consolidation measures will be carried out mainly on the expenditure side.
