Floods that struck Mozambique between December 2025 and January 2026 caused damage equivalent to approximately 2% of gross domestic product, forcing the government to mobilise additional resources to address the impact of the disaster, Finance Minister Carla Louveira said on Thursday, 1 October.
"The floods that devastated our country between December 2025 and January 2026 were among the most severe of the past decade," Louveira said at the opening of the second Coordinating Council of the Ministry of Finance, where she outlined the principal challenges facing public finances this year.
According to the minister, the floods claimed more than 100 lives and affected approximately 724,000 people, of whom 691,000 were directly impacted. In total, more than one million Mozambicans were affected and thousands of homes destroyed, intensifying pressure on the public accounts.
In view of the scale of the damage, Louveira said extreme climate events represent a significant threat to economic and social development, requiring the mobilisation of additional resources to respond to emergencies and support the recovery of affected areas.
"The provinces of Gaza and Maputo were the worst hit, with schools destroyed, roads severed, and more than 700,000 farmers with their livelihoods compromised. The phenomenon imposes a new normal on us: every climate event is a fiscal shock, requiring reconstruction, social protection, and budgetary resilience," she said.
In this context, the minister argued for a shift in the way the state prepares to respond to disasters, saying the finance sector must "abandon the logic of reacting after the emergency and adopt a culture of anticipatory prevention."
That shift entails "incorporating climate risk into budget planning, protecting essential allocations, creating rapid-response instruments, and evaluating public projects on their capacity to withstand shocks," Louveira explained.
For the minister, building back better means investing in safer schools, more resilient roads, functional drainage systems, and social protection mechanisms capable of reaching families before vulnerability becomes permanent poverty.
The fiscal pressure from the floods also led the government to adjust priorities and step up the mobilisation of domestic resources. In the revised Economic and Social Plan and State Budget (PESOE) for 2026, the forecast for domestic revenues was raised by 3.6 billion meticais (€49 million), increasing from 442.9 billion meticais (€6 billion) to 446.5 billion meticais (€6.1 billion).
The increase reflects the incorporation of additional revenues from liquefied natural gas projects in the Rovuma Basin. According to Louveira, the rise in domestic revenue collection is particularly significant during a period of heightened pressure on public expenditure linked to infrastructure reconstruction and increased climate resilience.
The minister argued that revenues derived from natural resources should be deployed strategically to finance investments that strengthen the economy's capacity to withstand climate shocks and reduce structural vulnerabilities.
"We must ensure that the country's strategic resources contribute to the structural transformation of the economy and to the well-being of current and future generations," she concluded.
Source: Diário Económico
Original article: https://www.diarioeconomico.co.mz/2026/10/01/economia/executivo-aponta-prejuizos-equivalentes-a-2-do-pib-nas-ultimas-cheias/
