APPENDIX
Mozambique: Summary and Time Frame for Implementation of
Macroeconomic and Structural Adjustment Policies, 1998–2000
|
Sectors and
Areas of
Action |
Policy Objectives |
Strategies and Measures |
Timing
of
Measures |
|
| 1. External
Sector |
| 1.1 Trade policy |
Rationalize import tariffs. |
Lower the top import tariff rate from 35 percent to at least
30 percent. |
By April 1, 1999 |
| 1.2 Aid
commitments |
Improve the efficiency of utilization of aid
funds. |
Encourage donors to (a) untie their aid and harmonize
procurement procedures;
(b) avoid placing excessive emphasis on project financing without due regard to recurrent
needs; and (c) provide regular information on the use of aid funds (recurrent, investment, and
technical assistance). |
Throughout |
| 1.3 External debt |
Reduce the debt-service burden and improve the
debt-service profile. |
Limit official external medium- and long-term borrowing
on nonconcessional terms, and the increase in public and publicly guaranteed short-term
debt. |
Throughout |
|
| 2. Pricing
policy |
| 2.1 |
Ensure viability of industries with regulated
prices. |
Adjust public enterprise prices (water, transport,
electricity, petroleum and communications) at quarterly intervals or in accordance with approved
formulas to at least cover domestic and import costs, and to ensure commercial viability. Increase
rents on state-owned property by at least as much as inflation. |
Throughout |
|
| 3. Fiscal
policy |
3.1 Fiscal
management |
Improve efficiency of fiscal management, including
expenditure controls, budgetary procedures, and treasury operations. |
Develop medium-term expenditure
framework. |
June 30, 1998 |
| 3.2 |
|
Review and restructure project portfolio; in particular,
complete review of African Development Bank (AfDB) project portfolio. |
1998-99 (AfDB portfolio by December
1998) |
| 3.3 |
Identify off-budget flows by March 1999 and include them
in the budget for 2000. |
1998-1999 |
| 3.4 |
Maintain up-to-date database on onlending agreements;
project debt service due on these agreements over next ten years; and include next year’s
debt service in the government budget. |
December 31, 1998 |
| 3.5 |
Prepare a draft of the new, consolidated system of public
accounting, including the computer systems model and the execution model. |
June 30, 1999 |
| 3.6 |
Implement computerized budget management
system. |
End-1998 |
| 3.7 |
Prepare consolidated public sector
accounts. |
December 31, 1999 |
3.8 Revenue
generation |
Improve customs effectiveness and
revenue. |
Submit to parliament Lei do Contencioso
Aduaneiro and Lei dos Tribunais Aduaneiros. |
June 30,1999 |
| 3.9 |
|
Redefine the role of the preshipment inspection in the
context of the introduction of the single administrative document for customs
clearance |
December 31, 1998 |
| 3.10 |
|
Begin implementation of customs staff
reorganization. |
July 31, 1998 |
| 3.11 |
Improve tax administration. |
Introduce single administrative document to replace BRI,
CRF, and despacho aduaneiro. |
October 1, 1998 |
| 3.12 |
Implement tax reform. |
Decide the VAT tax rate to propose to the Council of
Ministers |
July 31, 1998 |
| 3.13 |
|
Initiate VAT publicity campaign. |
July 31, 1998 |
| 3.14 |
|
Submit VAT code to Council of Ministers and inform
public. |
July 31, 1998 |
| 3.15 |
|
Create the new organizational structure for the VAT unit
and appoint the project manager and the chiefs of the subunits. |
June 30, 1998 |
| 3.16 |
|
Select VAT computerization system and agree on an
implementation plan with the company providing the system. |
August 31, 1998 |
| 3.17 |
|
Complete VAT tax register and reconcile with turnover
and industrial tax registers. |
End-November 1998 |
| 3.18 |
|
Introduce VAT. |
April 1, 1999 |
|
| 4. Governance and public
administration |
|
| 4.1 |
Achieve greater accountability within
government. |
Prepare action plan to strengthen the auditing function in
government, including capacity building. |
June 30, 1999 |
| 4.2 |
|
Submit to Council of Ministers decree regulating
government procurement practices and the control of public assets. |
End-1998 |
| 4.3 |
Reform civil service |
Finalize new classification of career streams and
compensation structure for the civil service. Implement thereafter. |
End-July 1998. Implementation by April
1999. |
| 4.4 |
|
Adopt decree on career streams and remuneration
system. |
September 30, 1998 |
| 4.5 |
Decentralize public administration |
Submit local government tax code to the Council of
Ministers. |
September 30, 1998 |
| 4.6 |
Support the electoral process |
Provide adequate resources to the institutions involved in
the elections, including the Technical Secretariat for Elections (STAE). |
In the context of the 1999 budget |
|
| 5. Monetary
policy |
5.1 Financial market
development |
Develop indirect monetary policy
instruments. |
Establish electronic network among all commercial banks
to carry out interbank transactions in foreign and domestic currency. |
June 30, 1999 |
| 5.2 |
|
Finance Treasury exclusively through placement of
government securities in the money market. |
Throughout, from July 1, 1998 |
| 5.3 |
|
Charge penalties of at least the rediscount rate on reserve
shortfalls and overdrafts. |
Throughout |
5.4 Central bank
information
base |
Improve timeliness and effectiveness of policy measures.
|
Improve central bank accounting to allow the monetary
accounts to be compiled directly from balance sheet information |
Ajustes to be eliminated in the first half of
1999 |
| 5.5 |
|
Begin monthly forecasting of demand and supply of
foreign exchange. |
September 30, 1998 |
5.6 Interest rate
policies |
Signal policy stance to markets. |
Keep the central bank rediscount rate positive in real
terms. |
Throughout |
| 5.7 Payments system |
Raise effectiveness of financial system. |
Complete study on standardization of
checks. |
April 30, 1999 |
| 5.8 |
|
Bring into operation register of bad
checks. |
September 30, 1998 |
|
| 6. Financial sector
reforms |
6.1 Improve
monetary
control and the
health of the
financial sector. |
Develop a competitive and sound banking
system |
Complete full on-site inspections of all commercial
banks. |
During 1998 |
| 6.2
|
|
Require commercial banks to publish half-year financial
statements. |
End-1998 |
| 6.3 |
Develop institutions
that promote private saving |
Introduce regulations on microcredits. |
September 30, 1998 |
| 6.4 |
|
Complete actuarial analysis of the public pension
schemes. |
June 30, 1999 |
| 6.5 |
|
Complete actuarial analysis of the pension scheme of the
National Social Security Institute. |
December 31, 1999 |
|
| 7. Private sector
development |
| 7.1 |
Improve business environment |
Revise decrees (diploma ministerial) 17/91 and
21/91 so as to simplify registration and operation of importers. |
October 1, 1998 |
| 7.2 |
|
Adopt revision of Decree 7/83 to simplify the licensing of
foreign business representative offices. |
August 31, 1998 |
| 7.3 |
|
Submit draft commercial code to the Technical Council of
Justice. |
December 31, 1999 |
| 7.4 |
|
Submit the Industrial Law to the Assembly of the
Republic. |
August 31, 1998 |
|
| 8. Public
enterprises |
| 8.1 |
Restructure public enterprise sector. |
Bring to the point of sale all the large public enterprises
from UTRE’s list dated June 2, 1998, except EMOSE. (EMOSE will be made a
limited-liability company, sociedade anónima). |
September 30, 1998 |
| 8.2 |
|
Complete sale of all state-owned small- and medium-scale
enterprises. |
June 30, 1999 |
| 8.3 |
|
Maintain government financial assistance to all enterprises
below 1 percent of GDP. |
Throughout |
| 8.4 |
Compile list of all enterprises in which the government
holds any share of ownership and provide the amount of 1997 dividends obtained from these
firms. |
End-1998 |
|
| 9. Energy
policy |
| 9.1 |
Promote development of energy
resources. |
Formulate a comprehensive strategy for development of
energy resources and submit to Council of Ministers. |
September 30, 1998 |
| 9.2 |
Improve efficiency of public enterprises in the energy
sector. |
Ensure that PETROMOC becomes current on all taxes and
stays current thereafter. |
September 30, 1998 |
| 9.3 |
|
Conduct inventory of PETROMOC’s surplus assets
and adopt asset divestiture plan. |
End-1998 |
|
| 10. Agricultural
policy |
| 10.1 |
Improve allocation and monitoring of sectoral resources
and efficacy of sector investment. |
Adopt and commence implementation of a sector
expenditure program (PROAGRI), including policy framework and restructuring of investment
portfolio. |
March 30, 1999 |
| 10.2 |
|
Ensure no explicit or implicit subsidization of the Cereals
Institute of Mozambique (ICM). |
Throughout |
| 10.3 |
Raise income and security of the rural
poor. |
Adopt regulations to implement land law, incorporating
views of small-holders, local communities, and private investors. |
December 31, 1998 |
|
| 11. Social
policy |
| 11.1 Health |
Rebuild the health system, particularly in rural areas and
districts affected by the war. |
Implement Health Sector Recovery Program so as to
increase provision of health service units per inhabitant. In particular: (a) raise DPT coverage of
population to 60-65 percent; (b) reduce index of geographic inequality in the provision of health
care services to 2.6; (c) increase proportion of health posts/centers stocked with Essential Drugs
Program kit to at least 50 percent; and (d) increase the proportion of health posts/centers staffed
with trained personnel to 80 percent. |
1998-2000 benchmarks
(a)-(d) to be met by mid-1999 |
| 11.2 |
|
Increase share of current expenditures on health in total
current expenditures annually. |
1998-2000 |
| 11.3 |
|
Monitor indicators (a)-(d) above. |
Throughout |
| 11.4 Education |
Improve quality of primary and secondary education;
increase access to education; target programs for girls, especially in the center and north of the
country; and improve management of education. |
Finalize preparation and begin implementation of sector
expenditure program, so as to increase coverage and quality of education, as measured by (a) an
increase in the primary gross admission rate by 2-3 percentage points a year; (b) a rise in the
number of primary school teachers by 10 percent a year, while maintaining the share of qualified
teachers at about 70 percent; (c) an increase in the primary school completion rates by at least 1
percentage point a year; and (d) maintenance of availability of textbooks at one per
pupil. |
1998-2000 |
| 11.5 |
|
Increase the share of current expenditures on education in
total current expenditures annually. |
1998-2000 |
| 11.6 |
|
Monitor indicators (a)-(d) above. |
Throughout |
| 11.7 Poverty |
Improve targeting and effectiveness of poverty reduction
programs. |
Complete poverty assessment, including poverty profile
and covering both urban and rural areas. |
October 30, 1998 |
| 11.8 |
|
Complete a poverty action plan. |
December 31, 1998 |
| 11.9 |
Improve food security. |
Submit food security strategy to Council of
Ministers. |
September 30, 1998 |
|
| 12. Environmental policies |
12.1 Regulatory
environment |
Promote sustainable use of natural resources through
improved management and clarification of access rights. |
Develop national management programs for wildlife,
fisheries, forestry, and nontimber products that will define the policy and legal framework, and
will clarify rights to these natural resources, taking into account traditional
rights. |
September 30, 1999 |
| 12.2 |
|
Adopt detailed regulations for environmental assessment.
|
December 31, 1998 |
| 12.3 |
|
Establish the environmental assessment review system,
including capacity building. |
May 31, 1999 |
12.4 Water and
sanitation |
Ensure rational and equitable comanagement of
internationally shared water resources. |
Adopt a new strategy in water resources management,
providing a framework for water allocation, pricing, and demand management of the southern
rivers. |
March 30, 2000 |
| 12.5 |
Improve access to clean water. |
Award contracts for the private management of the five
major water supply systems (Água de Maputo, Beira, Nampula, Pemba, and
Quelimane). |
By June 30, 1999 |
| 12.6 |
|
Increase water tariffs in real terms. |
By June 30, 1999 |
|
| 13. Transport and
telecommunication policies |
| 13.1 Public
expenditure |
Eliminate road transport bottlenecks affecting domestic
and international trade. |
Ensure sustainability of expenditures on road
rehabilitation and maintenance by prioritizing maintenance needs. |
Throughout |
13.2 Increase private
sector
participation
|
Remove barriers to competition and to an enhanced
private sector participation in transport and telecommunications. |
Complete transformation of LAM into a limited-liability
company. In the meantime, provide six-month information on sales, profits, and leverage
(liabilities/capital), as well as government subsidies, if any. |
December 31, 1998 |
| 13.3 |
|
Encourage competition in cellular phone services by
promoting entry of new private sector providers into sector. |
End-1998 |
| 13.4 |
Implement restructuring plan for CFM. |
Sign the memorandum of understanding for the
concession of CFM-South. |
September 30, 1998 |
| 13.5 |
|
Complete bidding process, including evaluation of
proposals for CFM-North. |
December 31, 1998 |
| 13.6 |
|
Complete bidding process, including evaluation of
proposals for CFM-Center (excluding the Sena line). |
September 30, 1999 |
|
| 14. Statistics |
14.1 Compilation of
statistics |
Improve quality and timeliness of statistical information
for decision making and analysis. |
Produce definitive monthly monetary survey and
supporting data within 30-45 days of the month’s end. |
Throughout |
| 14.2 |
|
Prepare national accounts for 1996 and 1997 incorporating
1996 household survey results. |
Preliminary accounts by September 1998 and final by
December 1998 |
| 14.3 |
|
Compile quarterly production indicators starting with the
first two quarters of 1998 and bring compilation lag to at most one month. |
By end-January 1999 |
| 14.4 |
|
Produce quarterly BOP figures within 45 days of the end
of the quarter. |
From June 30, 1998 |
14.5 Dissemination of
statistics |
Improve information on economic and social
trends. |
Make public the budget execution on a quarterly basis
(within 45 days of the end of the quarter). |
Throughout |
| 14.6 |
|
Publish national price index. |
February 28, 1999 |
| 14.7 |
|
Publish statistical abstract for 1996 household
survey. |
July 31, 1998 |
| 14.8 |
|
Publish census results. |
June 30, 1999 |
| 14.9 |
|
Publish monthly data on commercial bank interest
rates. |
Throughout |
|
