Prime Minister highlights positive economic trends

The Mozambican economy continues to grow despite all of the challenges facing the country, according to

Prime Minister Adriano Maleiane. Speaking on 19 October to the country’s parliament, the Assembly of the Republic, the Prime Minister pointed out that “despite all the challenges, our country’s economic performance continues to show a positive trend with a growth in Gross Domestic Product (GDP) of 4.14 per cent and 4.59

per cent in the first and second quarters of this year”.

According to Maleiane, the positive trend “is a reflection of the actions and measures that the government has been taking in several economic and social sectors, coupled with measures to control the Covid-19 pandemic”. He explained that this growth was driven by good performances in agriculture, fishing, tourism, transportation, manufacturing, mining, and services.

However, he acknowledged that the rise in fuel prices in the international market has influenced the rise of prices of goods and services in the country.

 To mitigate this, the government has been implementing a set of short-term measures focusing mainly on the cost structure of fuel “taking into account its impact on economic activity and our daily lives”.

Maleiane stressed that within the scope of pricing policy “we have been engaging in dialogue, on a regular basis, with the various stakeholders in the process of import and fuel distribution in the country with the aim of finding shared solutions to mitigate the impact of the rise in fuel prices at the domestic market level”.

It was in this context that the Government has reduced the logistic infrastructure costs of fuel for petrol stations by 60 per cent; the port handling fee by 5 per cent for all oil products; the margins of central storage facilities by 30 per cent; and tax on fuel by four meticais (one US dollar is about 63.9 meticais) per litre for petrol and diesel. In addition, the Government has temporarily suspended the correction component in the price structure for fuel and maintained the VAT exemption on cooking gas and paraffin.

As a result, it was possible to set the price of diesel at 87.97 meticais per litre when it should be 103.68 meticais. The same is true of gasoline which is sold at 86.97 meticais per litre rather than 101.57 meticais.

The Prime Minister also told parliamentarians that the measures that the government has taken to increase production and mitigate fuel prices are helping to limit inflation, which last September stood at 8.78 per cent against the two-digit average across Africa and Europe.

Complementing the short-term measures, on 9 August President Filipe Nyusi launched a set of medium and long-term measures to ensure accelerated and sustained growth of the economy. 

The adoption of these measures aims to improve the macroeconomic stability, business environment, and sustainability of the tax system in the medium and long term.

In another important development, the new platform eVisa allows for the electronic pre-approval of visas to foreigners for tourism and business (to attend meetings and conferences), as well as to carry out research. 

This platform is also valid for foreign nationals wishing to apply for pre-approval for visas in investment.

The Government will also submit to Parliament draft legislation to revise several legal provisions such as the VAT Code, Excise Code, Customs Tariff, Corporate Income Tax Code (IRPC), Tax System, Mining Law, and Petroleum Law.

Source: AIM