Government spends 93% of revenue on salary payments and public debt

Governo gasta 93% das receitas em pagamentos de salários e dívida pública

The Resident Representative of the International Monetary Fund (IMF) said on Wednesday that 73% of the public revenue collected by the government goes to pay salaries and 20% goes to service the public debt.

"73% is used for recurrent expenditure. This is not investment expenditure, it is not spent on infrastructure, it is not used for staff development and it does not improve the diversification of the economy," said FMI representative Alexis Meyer Cirkel.

The scenario could jeopardize the International Monetary Fund's continued support for the country.

"This is everything we've said is needed to boost the country's growth and per capita income. It's important to remember that these resources are used by 3% of the employed population, who are public servants. These 3% capture 73% of tax revenue," he added to journalists, managers of public and private entities and economists during the presentation of the IMF report.

"The wage bill is obviously unsustainable, as it absorbs practically all tax revenues. If you look at it this way, with 73% of tax revenue plus 20% paid on debt, that leaves only around 7% to 8% for public investment needs, building schools, roads and paying for goods and services in the business sector," he said.

Faced with this situation, the IMF recommends that the government comply with the law. "At the moment, our recommendation is to bring the wage bill into line with what was agreed at the end of last year as the State Budget law. If this doesn't happen, we see major risks for the sustainability of this wage bill, for fiscal sustainability," suggested the IMF's resident representative in Mozambique.

Due to the violation of the budget law, the International Monetary Fund says it will be difficult for you to continue supporting the country in economic recovery, good governance reforms, public finance management, among other aspects.

"The excesses of what had been budgeted, especially with regard to the wage bill, that worries us a lot," said the representative, who will end his mission in Mozambique next August.

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