The post-election instability that lasted for almost five months in Mozambique reduced state revenues by more than $600 million (38.7 billion meticals), causing serious damage to the national economy.
‘The fourth quarter of 2024 was characterised by social and political instability following the legislative and presidential elections, which culminated in the destruction of public and private infrastructure, the deprivation of people’s access to essential basic services and their jobs, and the looting of public and private property, among other things,’ states the budget proposal under debate in Parliament.
According to the 2025 Economic and Social Plan and State Budget (PESOE), the implications were disastrous for the economy, causing immediate negative repercussions on domestic and foreign direct investment, job creation, price stability and the social welfare of the population.
The document, prepared by the government of Daniel Chapo, recalls that the economic growth forecast for 2024 was 5.5%. However, only 1.85% was achieved, with the mining, trade and services, manufacturing, hotels and restaurants, and agricultural transport sectors being the most affected.
‘The reduction in state revenue by almost 38.7 billion meticals has compromised spending on economic and social infrastructure and other basic services for the country’s economic development,’ it points out.
Approved last week by the Government at another session of the Council of Ministers, the draft Economic and Social Plan and State Budget for 2025 is budgeted at 512.7 billion meticals (7.9 billion dollars).
Among the main macroeconomic assumptions underlying the 2025 PESOE are 2.9% growth in gross domestic product and an average annual inflation rate of around 7%. The outlook also points to revenues of 385.8 billion meticals (US$5.9 billion).
The PESOE is a document that defines the main economic and social objectives and financial policy of the State, also identifying the forecast revenue to be collected, the actions and resources necessary for its implementation.
In April, Parliament unanimously approved, by acclamation and definitively, the political agreement law to pacify the country, including the revision of the Constitution of the Republic and the powers of the President.
The legal mechanism, approved by the four parties that make up the Mozambican Parliament, is based on the agreement between the head of state, Daniel Chapo, and all political parties, signed on 5 March and submitted to the Assembly of the Republic for urgent consideration.
Meanwhile, on 23 March, Venâncio Mondlane and Daniel Chapo met for the first time and a commitment was made to end violence in the country.
