29.12.2009

Assembly passes budget

The Assembly of the Republic on 23 December passed the second reading of the state budget for 2009, and the resolution approving the government’s Social and Economic Plan for the year, with deputies from the Renamo-Electoral Union opposition coalition voting against.

In the “declaration of vote”, explaining why Renamo voted against the budget, Abel Mabunda claimed the budget was unconstitutional because it allocated money to the Ministry of Veterans’ Affairs (which looks after the interests of those whom fought in Mozambique’s war for independence), but gave nothing to “the fighters for democracy” – by which he meant the Renamo units that ravaged the country prior to the 1992 peace agreement.
Among demands raised by Renamo were that VAT should be reduced from 17 to 14 per cent. Lutero Simango also denounced alleged abuse of state property by Frelimo. Frelimo deputies accused Renamo of continued attempts at destabilisation by other means. Raimundo Mapanzene claimed that Renamo was “proving that they are not prepared to govern”, and were “confusing the autocratic instincts of its leader (Afonso Dhlakama) with the interests of the people”. Replying to claims heard frequently from Renamo and echoed in some of the media, that Frelimo uses “the dictatorship of the vote”, Feliciano Mata argued, “in democracy, decisions are taken by majority vote”. The plan and budget had to be passed “because the Mozambican people want the government to improve the quantity and quality of public services, and to decentralize powers to the provinces and districts”.

The budget envisages state revenue in 2009 from taxes and other domestic sources of 46.2 billion meticais (about $1.85 billion). Government expenditure for the year, however, is estimated at 98.1 billion meticais, leaving a deficit of 51.9 billion meticais that must be covered by foreign grants and loans. Thus 53 per cent of public expenditure in 2009 will depend on foreign aid.

The budget will allow the state to recruit 16,000 new staff. Of these the great majority – 12,000 – are teachers. 1,200 are health workers, and 1,600 are for “security and public order” – essentially police recruits. The priority areas for the government’s Action Plan for the Reduction of Absolute Poverty (PARPA) – which include education, health, infrastructures, agriculture, governance and public order – are allocated 68.7 per cent of total expenditure, excluding debt servicing and financial operations. This is a significant increase on the 65.5 per cent allocated to the priority sectors in the 2008 budget. The percentage of expenditure allocated to education rises from 18.5 to 19.5 per cent, on health from 11.9 to 14.9 per cent, and on agriculture and rural development from 3.9 to 7.3 per cent. Expenditure on infrastructure falls from 21.2 per cent of the 2008 budget, to 17.1 per cent of the proposed budget for 2009 – this is mostly a fall in the share allotted to roads from 11.4 to 7.9 per cent.
The judiciary sees its share rise slightly from 2.4 to 2.5 per cent, while expenditure on security and public order (mainly the police) slips from three to 2.9 per cent.

Debt servicing has fallen to 1.4 billion meticais, compared to 1.65 billion in the 2008 budget – a decline from 1.85 to 1.43 per cent of the total budget. This is largely because the state did not issue any domestic debt in the shape of treasury bonds, in the first six months of this year. (AIM Reports)

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