Translated by Francisco Chuquela
The execution of the State Budget in the first quarter of 2018 was within the forecasts, according to the report released by the Ministry of Economy and Finance
The report announces a mobilization of resources from the State Budget from January to March, amounting to MZN 55,889.9 million, equivalent to 18.4% of the forecast and a total expenditure of MZN 54,317.8 million, corresponding to 17.9% of the Annual Budget.
The State Budget execution is based on the prioritization of the allocation of resources destined to the expansion of social infrastructures to increase coverage and quality improvement in the provision of essential public services for the population, implementation of Basic Social Security programs through the increase in the number of vulnerable beneficiaries, the expansion of the economic infrastructures network, with the potential to boost agrarian, industrial, mineral-energy and tourism activity and modernization of public services.
According to the Ministry of Economy and Finance, the national economy is expected to grow 5.3% in 2018, thanks to growth in all sectors, with emphasis on agriculture, manufacturing, trade and transport. As a result of the improvement in the prices of raw materials in the international market, the extractive industry will make a substantial contribution to the growth of the economy.
The Ministry of Economy and Finance notes, however, that the budget execution of the first quarter was negatively influenced by the occurrence of abnormal rains in the North and Central regions of the country, which negatively affected the productive base of the agri-livestock sector, mainly in the North region.
However, the figures for the different statistics actually confirm the projections made for this year, in particular for the first quarter.
The economy isn’t performing the same as in previous years, it is a fact, but also the other fact is that the forecasts are confirmed and positive. A more modest growth, but within a predictable framework and within a plan that is outlined, which is worth highlighting.
On the other hand, at the level of the large financial donors, including bloomberg, positive news about Mozambique begins and emerges, inspired by below-double-digit inflation and a slow but solid economic recovery.
Apart from the fact that Mozambique is growing, the fact that there is news at the level of large financial markets that gives confidence to the Mozambican economy is a good sign because it helps attract investors’ appetites to search and invest in our market.
It is true that the national economy hasn’t yet completely overcome the crisis. At the corporate level, there is still a huge blow, but now relieved by the latest measures of the Banco de Moçambique. The growth is mainly driven by the export of coal.
In sectoral terms there are still some difficulties, fundamentally related to the circulation of money, payments between the State and companies, a component in which much work is to be done and a long way to go, in a context where the scenarios indicate recovery of the national economy.
The economic performance of the first quarter is still significant, taking into account that it has been achieved in a context where the country continues to lack the support of traditional external partners.
The robust recovery of the economy, more in terms of its strength and not necessarily in the perspective of high growth, conveys a good message to the business sector of the external partners, which can encourage potential investors and tourism to come to Mozambique.
Mozambique achieved solid growth in the first quarter, in a context in which the country continues to lack the support of traditional external cooperation partners. Here, we would like to emphasize with regard to donors and their position, that they are tied to an agenda linked to improving relations with the government, namely greater fiscal and budgetary transparency and the solution of outstanding issues that have led to the freezing of relations.
Certainly, the robust recovery of the economy, in the strongest sense, sends a good message to donors, especially to the business sector in their countries, in order to encourage investors and tourists to come to Mozambique.
However, at the level of state support, everything remains dependent on the donors’ own perceptions of how the various dossiers are conducted that will signal government transparency and fund management.
It shouldn’t be forgotten that the economic performance of the rest of the year, especially in the last quarter, will be conditioned by the climate of the October 10 municipal elections, despite the uncertainty surrounding Parliament.
It is well known that in all electoral years in Mozambique, the electoral quarter is the slowest and the most difficult, from an economic point of view, because the country stays for some time in suspense. There is no one in the electoral period, no decisions are taken. It follows the post-election period in which the decisions about who goes where take place.
It is true that on October 10 municipal elections, not general, will take place, however, we predict that the last quarter of this 2018 will be of little success, compared to the first. In fact, the projections available in some statistics already indicate a slower growth precisely in this election quarter.