Tuesday, January 4, 2011

AUSTERITY MEASURES SAVE 3.9 BILLION METICAIS

The Mozambican government managed to save 3.9 billion meticais (about 114 million US dollars) between September and December as a result of the austerity measures adopted to hold back public expenditure.According to the National Director of the Treasury, Almiro Tivane, speaking to reporters on Tuesday, the money saved was used to support the government subsidies on wheat flour and fuel, and to import basic goods.“The adoption of measures to restrain expenditure also allowed us to hold back price rises for basic goods, and made resources available to mitigate price rises”, he claimed. The specific austerity measures Tivane mentioned included the refusal to use budgetary reserves to purchase goods and services for the state, and a cut in the government’s use of air travel, communications, and expenses paid to officials on trips inside and outside the country.“All these measures on the expenditure side were taken to create space for the budgetary impact of the subsidies on wheat flour and on urban transport”, he said. Both the austerity measures and the subsidy on wheat flour were decided in September, in response to the riots against price increases that took place in Maputo and the neighbouring city of Matola on 1 and 2 September.Tivane also claimed that the government’s easing of customs duties on some imports did not lead to an overall decline in tax revenue. On the contrary successful tax collection in other parts of the economy meant that government revenue for the year ended up five per cent higher than planned.

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