GOVERNMENT DRAWING UP AMENDED BUDGET

Mozambican Finance Minister Manuel Chang told reporters on Friday that the government is drawing up an amended budget for 2011, which will soon be submitted to the country’s parliament, the Assembly of the Republic.Chang said the government wants the amended budget discussed in May – that is, towards the end of the current sitting of the Assembly. The budget had to be amended, he said, because of the rise in fuel and food prices.“We are going to revise the State Budget because of the crisis in prices”, he explained. “Some of the components in the budget must be altered to deal with the worsening of prices on the world market”. But the Minister gave no specifics about what might be changed in the budget.The existing 2011 budget, passed by the Assembly in December, envisages total public expenditure of 132.4 billion meticais (about 4.3 billion US dollars, at today’s exchange rates).Total state revenue, mostly from taxation, is expected to reach 73.3 billion meticais, thus leaving a deficit of 59.1 billion meticais to be covered by grants and loans.Thus 55.4 per cent of the budget is covered by the government’s own projected revenue, leaving only 44.6 per cent to be covered by foreign aid. This is a considerable improvement on the 2010 budget, in which only 48.6 per cent of planned expenditure was covered by projected revenue. However, the government may now feel obliged to increase the deficit, particularly if it intends to continue the current subsidies on fuel and bread.The government has repeatedly said that it is committed to austerity measures and to holding back unnecessary expenditure, in order to ensure that resources are channelled to priority areas.After the riots against price rises in Maputo on 1-2 September, the government announced a temporary freeze on wages and allowances for senior state officials, and a reduction in the use of air travel, and in the payment of communications costs.