The national economy has been significantly affected by successive shocks, with emphasis on the frequent occurrence of natural disasters, the Covid-19 pandemic, the terrorism affecting some regions in the North of the country, and geopolitical tension. These factors led the Government to implement a Package of 20 Economic Acceleration Measures (EAP) in order to recover the economy.
Public planning documents should provide a deeper insight into how public money is collected and distributed taking into account the priorities of each sector. Therefore, budgeting documents should clarify the direct impacts of the economic measures adopted, taking into account social dynamics, as well as the evolution of social needs.
It is in this context that we present this qualitative approach for non-quantifiable information and, on the other hand, the quantitative approach for numerical data. The present analysis focuses on the evolution of the main budget lines and social planning projected for 2023, taking 2022 as the base year, with greater incidence on the health sector, in order to evaluate the programmed priorities in relation to budgeting as a criterion for a possible implementation of these plans.
According to the PESOE (2023), State revenue is projected to be 357 billion meticais, equivalent to 26% of GDP, and State expenditure is around 472 billion meticais, equivalent to 35.8% of GDP, resulting in a budget deficit of 115 billion meticais, and a Primary Balance of 41 billion meticais, which in turn is equivalent to 3.1% of GDP.
It is important to note that the above projections are the result of a scenario expected in the budget preparation. Thus, an optimistic economic recovery in the order of 5% is foreseen despite the deterioration of the global macroeconomic and financial environment.
The Executive’s expectations regarding this growth are fundamentally influenced by the beginning of natural gas extraction and exportation through the Coral Sul Area 4 Project in the Rovuma Basin, in addition to the positive performance the Government expects in the economic and social sectors. In this context, the macroeconomic assumptions of the PESOE 2022 are:
- Real Growth Rate of 5%;
- Average annual inflation rate of 11.5%;
- Exports of USD 8.8 billion; and
- Net International Reserves of USD 2.9 billion (coverage of about 60 months of imports).
MAIN FINDINGS
The PESOE 2023 foresees a significant growth of the national economy in the order of 5%, to be influenced fundamentally by the beginning of the extraction and export of natural gas through the Coral Sul Project Area 4 of the Rovuma Basin. Notwithstanding the context of uncertainty prevailing due to the terrorist action in Cabo Delgado, which may compromise the achievement of the goals and objectives defined in the PESOE 2023 Proposal. Therefore, a constant monitoring of the economic and social environment is recommended, both at the domestic and social levels.
With the introduction of reforms in tax policy and the implementation of the Single Wage Table (TSU), the executive foresees an increase in tax revenues driven by personal income taxation of around 26.2% of GDP. Given this argument, the following question arises: why are companies not included in the tax reforms, only individuals being included?
The Health Sector is seeing nominal growth in comparison to the year 2022. Notwithstanding this growth, it is not expected to observe a real evolution in prices because of the forecasted inflation of 11.5%.
In the health sector, the resource deficit is expected to be around 1.5% for 2023, with the government assuming that external resources have not yet been confirmed. Disbursements will only be entered upon confirmation throughout the fiscal year to ease the pressure throughout the execution of the plan. It becomes necessary to create more efficient mechanisms for absorbing external resources and accounting for financing agreements to sectors, as they are not incorporated in the balance sheets.
OPESOE 2023 should be more informative, providing precise details about the investments to be made in the priority areas, as well as showing the mechanism that can accommodate the growing demand on promoting gender equality in all sectors.
Additionally, these planning instruments do not provide clarity on the primary balance of the mandate, as well as the distribution of the amounts in region and their impacts. Thus, the government is urged to make the PESOE much more informative regarding these matters.
The executive does not present concrete actions describing activities to be implemented in order to prevent and reduce the HIV prevalence rate in Mozambique, with special focus on risk groups within the key population.
Access the analysis of the PESOE 2023 Proposal in its entirety, through the link: ANÁLISE DA PROPOSTA DO PLANO ECONÓMICO E SOCIAL E ORÇAMENTO DO ESTADO PARA O ANO DE 2023: SECTOR DA SAÚDE – Observatório do Cidadão para Saúde (observatoriodesaude.org)