Only authorized public expenditure will be executed

The Mozambican government guaranteed this Friday that only duly authorized and documented public expenditure will be executed in 2025, to ensure that it is carried out within the available budgets, ensuring the rationalization of public accounts.

“Within the scope of rationalizing public spending, greater predictability and budgetary sustainability, we will ensure, among other actions, that public spending is only executed when duly registered and earmarked ,” said the Prime Minister of Mozambique, Maria Benvinda Levi, when defending in the Mozambican parliament the approval of the proposed law for the Economic and Social Plan and State Budget (PESOE) of 2025.

The government official also promised that the Mozambican executive will prioritize concessional external debt under favorable conditions , to the detriment of internal debt, to finance the budget deficit.

The Mozambican government also wants to update the medium-term public debt management strategy and operationalize the State's procurement center to make planning more flexible , supervise and monitor the procurement processes of State institutions, with the aim of reducing costs.

“We will strengthen the institutional capacity of the Tax Authority with a view to improving levels of efficiency and effectiveness, as well as modernizing the taxation mechanisms of the digital economy, which will allow us to tax economic agents that carry out online sales of goods and services, including tourism,” added the Prime Minister, referring to the mechanisms for collecting State revenue.

The proposed law relating to the Economic and Social Plan and State Budget (PESOE) for 2025, which foresees economic growth of 2.9% this year, is being debated in plenary this Friday and Saturday, with approval guaranteed by the parliamentary majority of the Mozambique Liberation Front (Frelimo, in power).

The Mozambican government forecasts GDP growth of 2.9% for 2025 (1.9% in 2024), an average annual inflation rate of 7%, exports of goods worth US$8,431 million (€7,379 million) and Gross International Reserves of US$3,442 million (€3,045 million), equivalent to 4.7 months of coverage of imports of goods and services, excluding megaprojects, according to PESOE.

State revenue for the entire year is expected to amount to more than 385,871 million meticais (5,347 million euros), equivalent to 25% of GDP , and total expenditure to 512,749 million meticais (7,107 million euros), corresponding to 33.2% of GDP, generating a budget deficit of 8.2% .

The document guides interventions in two “ complementary strategic domains ”: the economic — including the agricultural, industrial, tourism, mineral resources, hydrocarbons and energy sectors, and employment — and the social, which includes education, health, water supply, housing and social protection.

Mozambique expects to spend 2.85 billion euros on public sector salaries in 2025, an increase of 1.3% in one year, but the Government will limit each new hire to three .

According to PESOE 2025, the total cost of salaries and wages amounted to 202,859 million meticais (2,811 million euros) last year and is expected to grow to 205,550 million meticais (2,850 million euros) this year, equivalent to 13.3% of the estimated GDP.

On February 21, Lusa reported that the Mozambican State's expenditure on salaries and wages grew by around 40% in 2024, compared to the previous year, according to data from the Government, which in June estimated the total number of public servants and State agents in Mozambique at 370,000 .