Mozambique is grappling with a surging cost of living, prompting newly elected President Daniel Chapo to consider the removal of value-added tax (VAT) on essential goods like oil, soap, sugar, chicken, and eggs, which the government claims will make basic necessities more affordable.
Speaking at the 38th African Union summit on Sunday, Chapo also acknowledged the impact of high fuel prices on consumers and indicated potential government interventions to reduce these costs too. He noted that Mozambique does not produce fuel, and external factors influence its price, but the government could examine and adjust internal components contributing to fuel pricing to provide relief to consumers.
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At first glance, these measures seem well-intentioned and designed to alleviate economic pressure on struggling Mozambican households. But can the government truly lower the cost of living by decree? And is this a genuine economic strategy or a political manoeuvre to undercut the opposition, namely Venâncio Mondlane?
These announcements were made in the context of ongoing demonstrations and strikes in Mozambique, where citizens have expressed dissatisfaction with the high cost of living and unemployment, alongside contesting the results of the general elections held on 9 October last year.
