BUDGET DOES NOT FAVOUR SOUTHERN PROVINCES

Opposition deputies in the Mozambican parliament, the Assembly of the Republic, who claim that the government intends to spend more of the 2015 budget on the southern provinces than on the more densely populated central and northern provinces, have simply not read the entire budget, accused the Minister of Economy and Finance, Adriano Maleiane, on Monday.Speaking on the second day of the parliamentary debate on the budget and the economic and social plan for 2015, Maleiane said that one of the budget charts on provincial expenditure could indeed give the impression that more money would go to Gaza in the south than to the much more populous province of Zambezia in the centre.But much of public expenditure has now been decentralized not only to the provincial level, but also to the districts and municipalities. To understand the budget, all of these figures had to be taken into account, said Maleiane.When all the figures were included, he continued, it could be seen that the northern provinces (Niassa, Cabo Delgado and Nampula) receive 31 per cent of the budget, and the central provinces (Zambezia, Tete, Manica and Sofala) 41 per cent. That left just 28 per cent for the four southern provinces (Gaza, Inhambane, Maputo province and Maputo City).The most populous province is Nampula, and that accounts for 15 per cent of all projected public expenditure this year, said Maleiane. The opposition had also demanded higher wages for policemen, teachers and nurses. That was precisely what the government was doing, Maleiane replied. This year’s wage increase for the public sector was five per cent at the upper levels – but all low paid policemen, teachers and health workers have been granted an inflation busting 10 per cent rise (inflation in 2014 was less than two per cent).As for worries about the government’s increasing indebtedness, Maleiane argued that it was impossible to develop without loans. The gap between tax revenue and public expenditure could only be filled by grants and loans.Maleiane argued that the key is to ensure that the foreign debt is sustainable. That is achieved by guaranteeing that the net present value of the debt stock does not exceed 40 per cent of the country’s gross domestic product. Currently the value of the debt stock stands at 37 per cent of GDP.Maleiane added, however, that it is crucial that loans should be used for capital expenditure. The country should never allow itself to fall into debt simply to cover consumption.