The State Budget Proposal for 2020 (POE-2020) is based on unrealistic assumptions as it takes into account a GDP growth trend of 2.2%, similar to that of 2019, ignoring the magnitude of the impact of COVID-19 on the different sectors of the economy with an emphasis on the extractive sector that has already been reacting negatively to the current scenario.
The document prioritizes the payment of salaries and salaries of provincial decentralized governance bodies (OGDP) of about 15 billion meticais. This fact contributes to an increase in personnel expenses to 12.2% of GDP, an increase of 2 percentage points compared to 2019 in this item, the biggest increase in the last 3 years.
Furthermore, the fact that there is no information on the actions foreseen in the OGDP compromises the veracity of this proposal. If approved in this way, it will certainly undergo changes as provincial plans and budgets are sent to the Ministry of Economy and Finance. SO POE 2020 CANNOT BE APPROVED BY THE ASSEMBLY OF THE REPUBLIC UNDER THESE TERMS.
