Public spending by the Mozambican state reached 471 billion meticais (around 7.4 billion dollars) in 2023, of which 67 percent was spent on salaries and the payment of goods and services.

Of the money earmarked for operations, around 57 percent was spent on salaries and wages, while the purchase of goods and services consumed only 15 percent, with the remaining amount split between investment and financial operations, corresponding to 20 and 13 percent respectively.

The information is contained in a study and advocacy on local content in public spending and incentives for industrialization, carried out by the Confederation of Economic Associations (CTA).

The document is an instrument that aims to provide technical support for the amendment of the public procurement regulations, in accordance with the PAE (Economic Acceleration Program), with a view to ensuring a positioning of the private sector in relation to local content in public spending.

The study points to five sectors with the highest consumption of the budget for goods and services, namely General Public Services, Education, Economic Affairs, Security and Public Order and Health, looking at state purchases as an anchor for production and industrialization in the country within the framework of local content.

The study includes a long list of recommendations to improve the local content of public spending, including the need to adapt the financing criteria, adjusting requirements to facilitate access to credit for local companies, especially small and medium-sized enterprises (SMEs) through specific credit lines for strategic sectors such as agriculture, technology and industry.

"Diversification of Financing Instruments: Introduce crowdfunding, venture capital and equity financing as alternatives to traditional credit. Incentives for Financial Institutions: Create tax benefits for banks that finance local companies," recommends the study.

The recommendations include the need to improve support and logistics infrastructures, particularly investments in roads, energy and telecommunications to reduce companies' operating costs, reviewing customs duty and VAT exemptions to facilitate the import of equipment and raw materials essential for local production in the sectors identified as priorities.

With regard to Quality Certification, the study recommends the implementation of national quality seals to increase the competitiveness of Mozambican companies. With regard to reserving contracts for local companies, the study recommends allocating a percentage of public purchases exclusively to MSMEs," explained consultant Iola Silva, who led the study.

The lack of transparency in the contracting processes for goods and services is pointed out as a phenomenon that encourages corruption and undermines the quality of the services and goods provided to the state by companies. (Text AIM)