WHY THE GOVERNMENT’S FISCAL POLICY IS DEFRAUDING THE MOZAMBICAN PEOPLE

Fiscal policies remain expansionary in Mozambique, despite the fact that the Government has lost access to important foreign financing since 2016. Due to irresponsible fiscal policies, which cause very high interest rates, the fiscal measures pursued by the Government only benefit the groups closest to the Government, defrauding the expectations of the people.

The economy (gross domestic product, GDP) has been growing since 2016 at an annual average rate of around 3.8%, some 50% below the historical rates of 7% recorded in the previous decade. Over the medium term (through 2020), economists do not expect an improvement in the growth rate. A watershed event that led to this decline in growth was the public discovery in April 2016 of the famous hidden debts of US$ 2 billion.

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