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Home Cabo Delgado Impact of armed attacks on tax revenue: Cabo Delgado lost around 2 billion meticais between 2018 and 2019

Impact of armed attacks on tax revenue: Cabo Delgado lost around 2 billion meticais between 2018 and 2019

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Impacto dos ataques armados nas receitas fiscais: Cabo Delgado perdeu cerca de 2 biliões de meticais entre 2018 e 2019

The province of Cabo Delgado, which is home to one of the largest natural gas reserves in the world, has been, since October 2017, the scene of armed attacks by insurgents, a situation recently classified by the National Defense and Security Council (CNDS) as “external aggression perpetrated by Islamic State terrorists”.

Situation that contributed to the province's loss from 2018 to 2019, about 2 billion meticais in tax revenue (approximately 27.6% of the province's total revenue in this period). In this period, resources destined to the social sectors were seen to decrease by more than 50%, while resources for the areas of Military Defense increased by around 451%.

Thus, it is noted that Cabo Delgado may be at risk of a "conflict trap", a situation that refers to the vicious circle between conflicts and economic performance, in which conflicts delay economic growth and development, increasing in turn , the likelihood of more conflicts occurring.

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