Finance minister denies theft of subsidy money

Mozambican Finance Minister Manuel Chang on Monday denied opposition claims that sums initially intended to subsidise a basic food basket for the urban poor have somehow been diverted into the pockets of the ruling Frelimo Party.

Chang told reporters that the money for the food basket had simply been used to continue the existing subsidies on fuel and on wheat flour.

In her speech to Monday’s opening session of the Mozambican parliament, the Assembly of the Republic, Angelina Enoque, head of the parliamentary group of the main opposition party, the former rebel movement Renamo, noted that, under the initial government plans, the food basket should have taken effect in June, providing subsidised food for anyone in the main cities with an income of less than 2,500 meticais (93 US dollars) a month.

Furthermore a subsidised bus pass for workers, students and the elderly should have been issued in August.

To pay for these two initiatives, the government brought an amended budget to the Assembly in May. This included an allocation of 335.6 million meticais for the food basket.

But in June, the government abandoned plans for the food basket, probably due to the belated discovery that the food basket would cost more than the general subsidies on flour and fuel.

So Enoque demanded to know where the 335.6 million meticais had gone, “Isn’t this money be used for Frelimo cadre meetings and congresses, and for the municipal by-elections, among other things?”, she asked

The head of the parliamentary group of the Mozambique Democratic Movement (MDM), Lutero Simango, declared that diverting budgetary allocations away from their original purpose “creates space for corruption”.

“It is correct and just that questions be asked about the destination of the sums intended to implement the failed food basket”, he said.

But speaking to reporters, Chang said there had been no diversion, and the money was still being used for subsidies – but instead of subsidising a food basket targeted at the urban poor, it was now funding the general subsidies on wheat flour (which keeps the price of bread low), and on fuel (particularly the diesel used by the private mini-buses which provide much of the country’s urban passenger transport).

He pointed out that the money for the food basket was in the same line of the budget that covered the subsidies for flour, fuel and the fuel distribution companies (whom the government is still compensating for the losses incurred in selling fuel at prices lower than the import cost).

It was one or the other, Chang said – either the money went on the food basket and the transport pass, or it was used to continue the general flour and fuel subsidies, and the government had opted for the latter.

“If we had introduced the new measures (the food basket and the pass), then the previous subsidies would have ceased”, said the Minister.

Post published in: Africa News

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