Table 1. Mozambique: Summary and Time Frame for Implementation
of
Macroeconomic and Structural Adjustment Policies, April 1999-March
2002
|
Sectors and Areas
of Action |
Policy Objectives |
Strategies and Measures |
Timing of Measures |
1. Fiscal
policy
|
| 1.1 Public Accounts
|
Improve coverage and transparency of public
accounts.
|
Include in the budget previously off-budget
expenditures that pass through the banking system.
|
Throughout
|
| 1.2
|
Record in the budget all foreign aid flows passing
through the banking system at the time of disbursement.
|
Throughout
|
| 1.3
|
Progressively remove institutional and legal
impediments to inclusion of off-budget revenue and expenditure flows in the budget.
|
Throughout
|
| 1.4
|
|
Make public a quarterly disaggregated budget
execution statement.
|
Throughout
|
| 1.5
|
Draft new system of public accounting and approve
the respective implementation schedule.
|
Draft system by July 1999; approve schedule by
September 1999
|
| 1.6
|
|
Formally close budget accounts (conta geral de
estado) and submit to legal auditing and approval procedures.
|
Annually, from December 1999 for previous
year
|
| 1.7 Fiscal management
|
Improve
expenditure prioritization.
|
Develop and approve (Economic Council) annually in
June medium-term expenditure framework for all significant sectors as part of the annual budget
preparation process; make public thereafter.
|
Throughout
|
| 1.8
|
Improve government cash management.
|
Prepare short-term forecasts of treasury cash flows and
communicate to Bank of Mozambique.
|
Throughout from
July 1999
|
| 1.9 Revenue generation
|
Rationalize tax system and broaden revenue
base.
|
Create recording system for exemptions on domestic
taxes.
|
September 1999
|
| 1.10
|
|
Examine options for the creation of a central revenue
authority.
|
March 2000
|
| 1.11
|
|
Complete computerization of at least 10 custom
clearance points.
|
September 1999
|
| 1.12
|
|
Review tax and tariff system and adopt position
towards rationalizing exemptions regimes.
|
March 2000
|
| 1.13
|
Strengthen tax and customs administration.
|
Extend usage of unique taxpayer identification number
from value-added tax (VAT) and domestic excises to personal and corporate income taxes and
customs duties.
|
March 2000
|
| 1.14
|
|
Strengthen auditing procedures, expand tax audit staff
by ten additional auditors, and conduct at least two training courses.
|
March 2000
|
1.15 Public enterprise
and assets
administration
|
Improve administration and mobilize
revenue.
|
Submit to the Council of Ministers a policy statement
regarding public enterprises and companies with majority public ownership.
|
March 2000
|
| 1.16
|
|
Prepare annual listing of the government's ownership
interest in companies and dividends received.
|
Throughout
|
| 1.17
|
|
Develop strategy on government shares in privatized
enterprises, including formulation of criteria for divestment.
|
June 2000
|
| 1.18
|
|
Develop plan to distribute shares held on behalf of
labor.
|
June 2000
|
| 1.19
|
|
Review performance contracts of all public enterprises
and revise them as needed to ensure improved services delivery and to rationalize flow of funds
with government.
|
CFM and EDM, December 1999; others, December
2000
|
|
2. Governance and public administration
|
|
| 2.1
|
Achieve greater accountability within
government.
|
Implement the action plans (Administrative Tribunal
and Inspectorate General of Finance) to strengthen the auditing function of the
government.
|
1999-2001
|
| 2.2
|
Raise the effectiveness of public service.
|
Complete evaluation of the impact of career streams
and salaries reform on retention and recruitment in the civil service.
|
December 2001
|
| 2.3
|
|
Prepare civil service regulations that include
performance standards and incentive mechanisms.
|
December 1999
|
| 2.4
|
|
Establish a code of administrative procedures in the
civil service.
|
December 2000
|
| 2.5
|
|
Formulate operational plan for Public Administration
Training System (SIFAP).
|
March 2000
|
| 2.6
|
|
Submit to Council of Ministers a strategic plan for
public sector reform, including a functional review of ministries.
|
June 2000
|
| 2.7
|
Ensure viability of social security system.
|
Develop regulations governing private pension
schemes.
|
April 2000
|
| 2.8
|
|
Complete actuarial analyses of the pension scheme of
the public sector and of the National Social Security Institute.
|
December 1999
|
| 3. Financial
sector
|
|
|
3.1 Financial market
development
|
Raise central bank's capacity for indirect monetary
management.
|
Authorize the Bank of Mozambique to hold regular
auctions of treasury bills, as needed for monetary control purposes.
|
December 1999
|
| 3.2
|
Strengthen clearance system.
|
Prepare payments system and infrastructure to switch
to electronic check clearing.
|
April 2000
|
3.3 Banking
supervision
|
|
Charge bank supervision with enforcing higher
standards for the quality and timeliness of banks' statistical reports.
|
September 1999
|
| 3.4
|
|
Raise the minimum standards for internal control of
commercial banks.
|
December 1999
|
| 3.5
|
|
Adopt new chart of accounts for commercial
banks.
|
December 1999
|
|
4. External sector
|
|
|
| 4.1 External debt
|
Strengthen debt management.
|
Strictly limit public sector foreign borrowing on
nonconcessional terms.
|
Throughout
|
| 4.2
|
|
Develop strategy for strengthening debt recording and
management.
|
June 2000
|
| 4.3 Trade policy
|
Reduce level and dispersion of import
tariffs.
|
Lower the top import tariff rate to 25
percent.
|
January 2002
|
| 4.4
|
|
Submit revised customs legislation to the National
Assembly (basic customs act; Customs Code; and law on customs tribunals).
|
December 1999
|
| 4.5
|
Complete an assessment of the remaining import
surcharges.
|
September 1999
|
| 5. Private sector
development
|
|
|
| 5.1
|
Improve regulatory environment.
|
Complete draft of new Commercial Code, covering
company and contract law.
|
August 2000
|
| 5.2
|
|
Submit to Parliament Commercial Code, Commercial
Register, and Incorporation Act.
|
July 2001
|
| 5.3
|
|
Publish annual report of Interministerial Commission
for Removal of Administrative Barriers in order to strengthen accountability.
|
From December 1999
|
| 5.4
|
Improve land-use rights.
|
Finalize and adopt regulations for urban land use.
|
December 1999
|
| 6. Judicial
reform
|
|
|
| 6.1
|
Increase capacity and effectiveness of legal
system.
|
Adopt strategic plan for justice system.
|
October 2000
|
| 6.2
|
|
Start effective operation of Center for Judicial Studies
and Training.
|
March 2000
|
| 6.3
|
|
Ensure dissemination of legal texts to legal
professionals.
|
From January 2000
|
| 7. Poverty
|
|
|
|
| 7.1
|
Raise focus on poverty in adopted policies.
|
Establish systematic technical review process,
reporting to the Council of Ministers, to consider the impact of major policy changes on
poverty.
|
March 2000
|
| 7.2
|
Improve targeting of expenditure programs.
|
Commence implementation of poverty action plan
(Linhas de Acção para a Erradicação da Pobreza) based on
operational matrix.
|
January 2000
|
| 7.3
|
|
Complete provincial poverty profiles.
|
June 2000
|
| 8.
Health
|
| 8.1
|
Improve coverage and quality of health
services.
|
Implement and monitor Health Sector Recovery
Program so as to increase provision of health service units per inhabitant. In particular, (i) raise
DPT coverage of population to 80 percent;
(ii) reduce index of geographic inequality in the provision of health care
services to below 2.8;
(iii) increase proportion of health posts/centers stocked with Essential Drugs
Program kits to 90 percent; and (iv) increase the proportion of health posts/centers staffed
with trained personnel to 90 percent.
|
Throughout
|
| 8.2
|
|
Increase (annually) current expenditures both in real
terms and as a share of total current expenditure in line with medium-term expenditure
framework.
|
1999-2001
|
| 8.3
|
|
Develop and approve new Health Sector Strategic
Plan.
|
December 2000
|
| 8.4
|
|
Develop and adopt National Multisectoral Strategic
Plan on HIV/AIDS.
|
June 2000
|
| 9. Education
|
|
|
|
| 9.1
|
Improve quality of, and access to, primary and
secondary education.
|
Implement and monitor the Education Sector Strategic
Program (ESSP). Attainment of its goals to be measured by improvement of 1-2 percentage
points annually in (i) gross enrollment rate; (ii) proportion of students in primary and
lower secondary schools passing key examinations; (iii) average repetition rate in primary
and lower secondary schools (reduction).
|
Throughout
|
| 9.2
|
|
Increase (annually) current expenditures on education
both in real terms and as a share of total current expenditure in line with medium-term
expenditure framework.
|
Throughout
|
| 9.3
|
Increase number of skilled professionals.
|
Develop strategy for tertiary education.
|
December 2000
|
| 9.4
|
|
Prepare a strategy for technical and vocational
education.
|
December 2000
|
| 10.
Agriculture
|
| 10.1
|
Improve allocation and effectiveness of public
expenditure.
|
Implement the agriculture sector expenditure program
(PROAGRI); maintain agricultural policy framework.
|
Throughout
|
| 10.2
|
Remove impediments to development of input
markets.
|
Complete study on constraints hindering
development of input markets (particularly seeds, fertilizers, and pesticides).
|
December 1999
|
| 10.3
|
Improve security of land tenure.
|
Identify outstanding valid land title applications in the
pipeline and adopt indicative timetable for their reduction.
|
January 2000
|
| 11.
Environment
|
| 11.1
|
Promote sustainable use of natural resources.
|
Prepare and adopt additional regulations that apply to
the environment law (including on waste management, environmental standards, marine
pollution, CFC emission, and protected areas).
|
December 2000
|
| 11.2
|
|
Establish environmental assessment review system
across ministries and initiate related capacity-building action plan.
|
June 2000
|
| 11.3
|
|
Develop integrated water sanitation and hygiene
strategy.
|
June 2001
|
| 12. Transport
and telecommunications
|
| 12.1
|
Improve sustainability and management of road
network.
|
Increase each year the government's share in financing
of periodic and routine road maintenance expenditures, and ensure a smooth flow of maintenance
financing.
|
Throughout
|
| 12.2
|
|
Reclassify road network, including previously
unclassified roads.
|
December 2000
|
| 12.3
|
|
Separate state construction units and plant pools from
road directorate and initiate privatization of the plant pools.
|
October 1999
|
| 12.4
|
Remove barriers to competition in transport and
telecommuni-cations.
|
Adopt regulations for coastal shipping associated with
the Maritime Law (Lei do Mar) to permit private sector entry.
|
December 1999
|
| 12.5
|
|
Submit to National Assembly telecommunications
legislation that would guarantee right of entry to private companies; complete implementing
regulations.
|
June 2000
|
| 13. Energy and
water
|
| 13.1
|
Improve access to electricity and water and reduce
costs.
|
Adopt regulations for implementation of electricity
law that clears the way for private sector involvement in generation and distribution of
electricity, and that establishes autonomous regulatory body.
|
December 1999
|
| 13.2
|
|
Commence implementation of plan for demand-based
water provision (Rural Water Transition Plan) in all provinces.
|
March 2002
|
| 14. Statistics
|
|
|
|
14.1 Compilation
of statistics
|
Improve quality, timeliness, and dissemination of
statistics.
|
Produce preliminary annual national accounts within 6
months of the end of the year. Produce final annual national accounts within 10 months of the
end of the year.
|
Throughout
|
| 14.2
|
|
Compile quarterly production indicators within 45
days of the end of the quarter.
|
Throughout
|
| 14.3
|
|
Adopt statistics master plan stating timetable of
priority data collection efforts (including redesign of INE's surveys), financing requirements, and
responsible executing agencies/INE departments.
|
December 1999 |
| 14.4
|
|
Adopt policy for public access to data and
dissemination of statistical information.
|
December 1999
|
|
|
Table 2. Mozambique: Selected Economic and
Financial Indicators, 1997-2001
|
| |
1997 |
1998 |
1999 |
2000 |
2001 |
| |
Prog. |
Prog. |
Proj. |
Proj. |
Proj. |
|
| |
(Annual percentage change,
unless
otherwise specified) |
| National income and prices |
| Nominal GDP (in billions of
meticais) |
39,693 |
46,134 |
52,913 |
60,177 |
67,790 |
| Nominal GDP (in millions of U.S.
dollars) |
3,438 |
3,893 |
4,147 |
4,505 |
4,940 |
| Real GDP |
11.3 |
12.0 |
9.7 |
7.0 |
7.2 |
| Real GDP per
capita |
8.9 |
9.5 |
7.3 |
4.6 |
4.9 |
| GDP deflator |
11.1 |
3.8 |
4.5 |
6.3 |
5.1 |
| Consumer price index (annual
average) |
6.4 |
0.6 |
1.5 |
6.6 |
5.0 |
| Consumer price index (end of
period) |
5.8 |
-1.3 |
5.5 |
5.0 |
5.0 |
| |
| External sector |
| Merchandise
exports |
1.7 |
7.9 |
18.6 |
9.4 |
57.8 |
| Merchandise
imports |
-2.9 |
14.3 |
60.8 |
-20.5 |
-3.1 |
| Merchandise export
volume |
1.7 |
13.0 |
15.9 |
7.2 |
54.4 |
| Merchandise import
volume |
5.7 |
19.3 |
57.6 |
-22.3 |
-4.3 |
| Terms of trade |
8.8 |
-0.3 |
0.3 |
-0.2 |
0.9 |
| Nominal effective exchange
rate (end of period)1 |
6.5 |
-5.7 |
-2.4 |
... |
... |
| Real effective exchange rate (end of
period)1 |
9.4 |
-9.7 |
-6.9 |
... |
... |
| |
| Government budget |
| Total revenue |
31.8 |
14.9 |
17.9 |
20.2 |
17.0 |
| Total expenditure and net
lending |
34.7 |
7.5 |
28.9 |
5.6 |
9.0 |
| Current
expenditure |
38.8 |
23.3 |
24.2 |
9.0 |
10.2 |
| Capital
expenditure and net lending |
31.3 |
-5.5 |
33.7 |
2.2 |
7.8 |
| |
| |
(Annual change in percent of
beginning-period
broad money, unless otherwise specified) |
| Money and credit |
| Net domestic
assets |
11.8 |
9.3 |
1.6 |
23.0 |
21.6 |
| Of
which: net credit to the government |
-22.3 |
-16.0 |
-11.1 |
3.7 |
1.3 |
|
credit to the rest of the economy |
31.1 |
17.7 |
17.5 |
18.9 |
19.4 |
| Broad money (M2)
|
24.4 |
19.2 |
16.5 |
12.8 |
12.6 |
| Velocity (GDP/ average
M2) |
5.9 |
5.7 |
5.6 |
5.6 |
5.6 |
Rediscount rate (in percent; end of
period;
1999 end-June) |
13.0 |
10.0 |
10.0 |
... |
... |
| |
| |
(In percent of GDP) |
| Investment and saving |
| Gross domestic
investment |
19.1 |
20.4 |
35.5 |
25.6 |
19.8 |
| Government |
8.0 |
9.3 |
10.6 |
10.7 |
10.5 |
| Other
sectors |
11.1 |
11.1 |
24.8 |
14.8 |
9.3 |
| Gross national
savings |
5.5 |
4.2 |
10.7 |
6.7 |
7.5 |
| Government |
9.7 |
7.6 |
10.6 |
7.3 |
7.4 |
| Other
sectors |
-4.3 |
-3.3 |
0.1 |
-0.6 |
0.1 |
| |
| Government budget |
| Total revenue |
11.6 |
11.5 |
11.8 |
12.5 |
13.0 |
| Total expenditure and net
lending |
23.9 |
22.1 |
24.9 |
23.1 |
22.3 |
| Overall balance before
grants |
-11.9 |
-10.7 |
-13.0 |
-10.6 |
-9.4 |
| Total grants |
9.3 |
8.3 |
12.1 |
7.0 |
6.4 |
| Overall balance after
grants |
-2.6 |
-2.4 |
-1.0 |
-3.5 |
-3.0 |
| Domestic primary
balance |
0.7 |
-0.6 |
-2.6 |
-1.7 |
-1.6 |
| Domestic bank
financing |
-3.3 |
-2.3 |
-1.8 |
0.6 |
0.2 |
| |
| External sector |
| Current account balance before
grants |
-17.8 |
-20.5 |
-34.1 |
-23.7 |
-15.9 |
| Current account balance after
grants |
-8.7 |
-12.4 |
-22.4 |
-16.8 |
-9.6 |
| |
| |
(In percent of exports of goods and
nonfactor services) |
| |
| Net present value of total external
debt outstanding2 |
710.8 |
699.2 |
505.2 |
475.7 |
406.5 |
| External debt service (nonfinancial
public sector) |
| Scheduled,
before debt relief |
66.2 |
72.8 |
68.0 |
79.7 |
57.9 |
| Scheduled,
after debt relief in Naples terms |
19.2 |
20.1 |
24.6 |
26.5 |
19.2 |
| Scheduled,
after HIPC assistance3 |
... |
... |
15.5 |
13.4 |
9.1 |
| |
|
(In percent of government
revenue) |
| External debt service (nonfinancial
public sector)4 |
| Scheduled,
before debt relief |
73.9 |
77.1 |
73.3 |
83.3 |
70.5 |
| Scheduled,
after debt relief in Naples terms |
22.6 |
23.7 |
30.0 |
30.7 |
26.0 |
| Scheduled,
after HIPC assistance3 |
... |
... |
19.0 |
15.5 |
12.3 |
| |
| |
(In millions of U.S. dollars, unless
otherwise specified) |
| |
| External current account after
grants |
-298 |
-483 |
-931 |
-759 |
-475 |
| Overall balance of
payments |
-98 |
-204 |
-196 |
-485 |
-473 |
| Gross international reserves (end of
period) |
532 |
625 |
734 |
647 |
567 |
| in months of
imports of goods and nonfactor services |
6.8 |
6.7 |
5.0 |
5.5 |
5.0 |
| in percent of
broad money |
82.8 |
82.7 |
83.4 |
65.2 |
50.7 |
| Total external debt (end of period)
|
7,439 |
8,344 |
7,682 |
8,069 |
8,215 |
| External arrears (public sector; end
of period)5 |
741 |
762 |
0 |
0 |
0 |
| Exchange rate (meticais per U.S.
dollar; end of period) |
11,543 |
12,366 |
... |
... |
... |
Sources: Mozambican authorities; and
staff estimates and projections.
1A minus sign indicates depreciation. Figure for 1999 represents change over 12
months through March.
2Public and publicly guaranteed debt after rescheduling, in percent of three-year
export average.
3Based on the amount committed at the decision point.
4Excludes IMF debt.
5In view of the best efforts being undertaken by Mozambique to conclude
debt-rescheduling agreements, the country is deemed to have no arrears outstanding for
programming purposes. |
