State spending will increase by 15% next year to more than 542,695 million meticais, according to the 2024 budget proposal that parliament will discuss and vote on this week.

According to documents supporting the proposal for the Economic and Social Plan and State Budget (PESOE) for 2024, this total budgeted expenditure corresponds to 35.3% of the Gross Domestic Product (GDP) expected for next year.

In the same document, quoted by Rádio Moçambique, the government recalls that state spending for this year has been budgeted at 472.122 billion meticais, corresponding to 35.8% of Mozambique's expected GDP in 2023.

According to the budget proposal for next year, which is to be discussed and voted on in parliament on December 6 and 7, the biggest slice of expenditure will go to wages and salaries, which will rise to 191.747 billion meticais, equivalent to 12.5% of GDP, while debt charges will rise to 54.183 billion meticais, 3.5% of GDP.

Investment spending will increase to 137,297 million meticais in 2024, equivalent to 8.9% of GDP.

The government estimates state revenues of more than 383,537 million meticais in 2024, equivalent to 25% of GDP, which will represent a deficit of more than 159,488 million meticais, corresponding to 10.4% of GDP.

Mozambique's GDP is expected to grow to 1.536 trillion meticais in 2024, which corresponds to an expected economic growth of 5.5%.

In order to achieve these goals, the government states that the PESOE 2024 proposal "is based on increasing and improving access to basic services for the population".

"By prioritizing the allocation of resources in the economic and social sectors, giving priority to the development of human capital and the protection of vulnerable groups, as well as directing resources towards investments in programs with the potential to generate income, create jobs and accumulate capital," it reads.

In addition, the government "will continue to implement reforms under the Economic Acceleration Package (PAE), with the prospect of sustaining the pace of economic growth, improving the business environment and strengthening the framework for transparency, good governance and the fight against corruption".

"In this respect, the main reform actions will be focused on creating tax incentives to promote growth, reducing bureaucracy and simplifying procedures, attracting Foreign Direct Investment (FDI), combating money laundering and increasing the efficiency and effectiveness of state institutions," he adds.

In order to "maintain the pace of fiscal consolidation and the improvement of public debt sustainability parameters in the medium term", the PESOE 2024 "maintains the restrictive course of fiscal policy", with "a reduction in the level of total expenditure as a percentage of GDP of around 0.5 percentage points".

"Improving fiscal sustainability in the medium term will create the conditions to safeguard macroeconomic stability and the gradual creation of fiscal space for increased public investment and the economy's ability to cushion external shocks," the government concluded in the document.