Mozambique is aiming to save a total of $120m next year by slashing benefits for some top officials of the government, Finance Minister Adriano Malaeiana has said.
According to him cutting down perks such as official vehicles and free housing will be the main target areas. The government was opting to rent accommodation for officials and also give them allowances to spend on other key resources they may need.
“Due to the difficulties the state is facing to make housing available for high ranking governmental officials, it had resorted to renting. This has brought about enormous costs to the state. So, the measure now is to set an average ceiling, first to enforce discipline and secondly to save.”
“We are also going to put an end to the long-standing scandal of buying cars with the sole purpose of selling them at a discount to officials for their personal use,” the minister said after a cabinet meeting on Tuesday.
He added that: “Instead when an official takes office he will be granted an allowance to spend on whatever he likes, provided that it is acceptable to the society.”
Mozambicans in June this year expressed disgust after the leadership of the country’s legislature purchased 18 luxury vehicles for an estimated $3.8m. The vehicles were assigned to members of the Standing Commission – the legislature’s governing board.
The outrage which was largely on social media was against the backdrop that the country was in the midst of an economic crisis. The purchases were largely seen as insensitive on the part of the lawmakers.
Leaders of the opposition and ruling party bloc admitted that the public outrage was justified but insisted that they needed official vehicles in the discharge of their duties. The National Budget Director of the Ministry of Finance, Rogerio Nkomo, also echoed that position.
The International Monetary Fund (IMF) and state budget donors suspended aid to Mozambique in April 2016 after the release of government-guaranteed hidden loans between 2013 and 2014 amounting to over 1.4 billion dollars (1.2 billion euros).
The amount added to the already known costs of the Mozambican Tuna Company (Ematum), contracted under the same arrangement.
On October 25, 2016; the Mozambican government assumed financial incapacity to pay the next installments of its debts with creditors, defending a restructuring of the payments, indispensable for a new program of the IMF, whose rules prevent aid to countries in an unsustainable trajectory of existing debts.