Good afternoon. Finance minister Carla Louveira faces an unenviable task in designing the government’s new debt management strategy for the next four years (see below). The previous three-year strategy, for 2022-2025, lies in tatters. And it will not do to blame that simply on the economic effect of anti-government protests.
The full Daily Briefing continues below for Pro subscribers. Subscribers to the Zitamar News tier can read the top half, including the full leader article, here.
The latest from Zitamar News:
Tom Gould
The debt management strategy launched in 2022 required the government to reduce domestic debt as a share of total public sector debt, and also to reduce the proportion of debt made up by treasury bills, the most short-term and expensive form of government debt. No sooner had the strategy come into force than things started to veer off course, apparently due to the disastrous implementation of the so-called single salary table payment structure for public sector workers, which led to massive overspending, as well as the increased cost of the war in Cabo Delgado province. Unwilling to confront the public sector over the wage bill or the security forces over their corruption, the government chose to borrow more, and the only way to do that was by issuing more domestic debt in local currency. As well as government policies, slower than expected economic growth last year led to disappointing tax revenues, and that was in the first nine months of the year, before the protests started.
