In the past 27th September, the Mozambican government approved in Cabinet Meeting the General Budgetary Law proposal for 2017, which, among other capital issues, underlined the need of increase the food production to halt the decline of agricultural production which occurred in the present year. Public debt and corruption are currently the biggest challenges faced by the Mozambican executive, notwithstanding the lack of any actions against this issues under the budget document.
The General Budgetary Law for 2017 foresees a general amount of 272,3 billion meticals (approximately 3,5 billion north american dollars), reflecting a clear growth, when compared to the State Budget of 2016, which was valued in 243 billion meticals.
The biggest challenges the General Budgetary Law faces for 2017 (as already underlined in the preamble) are the maintenance of the most important tax rates, the public debt sustainability, the increase in revenue and the efficient allocation of resources to Education, Health, Agriculture and Social Welfare.
On the other hand, several budget cuts are planned at a state investment level, forming a considerable contrast when compared to the increase of the defense expenditure in 200 million meticals with the Defense Armed Force personnel and as well 50% with the public servants in Maputo, relegating the provinces to a second plan. Regarding state revenue, we underline the maintenance of the tax incentives to major companies investing in natural resources such as gas and coal, among others.
Along with a more restrictive budgetary policy, the economic recovery builds on a standardization on the price of raw materials, which shall lead to a growing rate of 24% regarding the extractive industry.
The State Budget for 2017 expects to improve the confidence of the international partners, in particular the return of the foreign direct investment.