The president of Mozambique, Filipe Nyusi presented today in the capital Maputo a new program to accelerate his country’s economy.
The program entitled “PAE” (roughly translating into ‘Program for the acceleration of the Economy’) consists in 22 measures divided in two sets of reforms, the first being fiscal and economic stimulus and the second the improvement of its business environment, transparency, governance and the acceleration of strategic infrastructure.
The fiscal and economic stimulus interventions include the reduction of selected taxes with a direct impact on the main productive sectors. The measures are intended to create mechanisms to reduce the bureaucracy of key elements in the tax code simplifying fundamental processes to attract new investments, greater control over customs and mineral resources tax evasion and promotion of public housing, among others.
These measures also include actions to strengthen the private sector including better access to credit (through concessional lines); boosting and enhancing the competitiveness of national logistics corridors and ensuring that a share of the revenues from natural resources is kept on their regions of origin to foster local content development.
As for the improvement of the business environment, transparency and governance, the measures include stronger pension funds regulation; Structural improvement in the efficiency of public services; Improving internal audits and; the adjustment of labor laws and visa regime.
Speaking on the sidelines of the event, Max Tonela, Mozambique’s Minister of Economy and Finance explained that the program is the result of a government analysis based on a number of public consultations with the private sector over the last months.
Although Mozambique’s economic performance has been heavily affected by consecutive shocks in the last few years including cyclones, covid, insurgents in the north, and the hidden debt budget suspension, in the last months, the country has shown strong signs of recovery, including a return to the IMF’s program and stronger support from the World Bank and other multilaterals.
The conflict in Ukraine aggravated Mozambique’s economic situation but at the same time evidentiated the country’s great unexplored potential as an agriculture and energy hub. The country is about to ship its first LNG from ENI’s platform in the coming months coinciding with a growing demand for gas in Europe.
