The assessment is based on the standards set in “Fiscal Transparency Code - Consultation Draft of July 1, 2013”, IMF, July 2013.
The decentralized State’s bodies are the Provinces and Districts.
The Municipalities Law (2/1997) defines the legal framework applicable to municipalities; the Public Enterprises Law (6/2012) provides the legal framework applicable to Public Enterprises. The legal framework applicable to other public autonomous entities, such as Institutions, Funds, and Services is set by ad hoc laws or decrees.
This category of public entities includes Institutions, Funds, and Services created by law or decree.
The IMF Staff list of non-financial public corporations includes the public corporations in which the State owned at least 50% of the shares, that is, based on the information made available by the authorities, 14 corporations created under public law and 32 corporations created under private law.
The major shareholder is IGEPE, the public institute that manages and controls the State’s investments portfolio, (34%), Emopesca, the State fishing company, (33%), and GIPS (33%).
When possible, the impact of the transfers between public entities has been neutralized, and some restatements have been realized for narrowing discrepancies due to the use of different basis of accounting across the public sector.
The financial statements of the publicly-owned corporations are collected annually by the IGEPE. However, some corporations do not communicate their financial statements timely, while others do not communicate them at all. In addition, no consolidation of this financial information is performed. Therefore, the IMF estimates have been calculated based on the most recent available financial statements of ten public corporations that show the most significant net worth and financial operations as at December 31, 2012. It is to be noted that these figures may evolve significantly for 2013. Indeed, in 2013, the Public Corporation EMATUM issued bonds on the Eurobond market for $850 millions. This means that the liabilities of the public sector could have increased by 6% of GDP, and may account for 43% of GDP.
The cash balance is split between the Conta Unica (treasury single account), recebedorias (tax collection offices), outras contas da Tesouraria (other central Treasury accounts), and outras contas do Estado (other state accounts, outside the central Treasury). The IT system, e-SISTAFE, effectively controls and reconciles the TSA but not the other accounts.
In addition to the information provided in the CGE, the annual report on the public debt that is prepared by the DNT provides detailed information on the external and internal debt balances, annual variation and composition, as well as a very brief analysis of debt sustainability.
The international public sector accounting standards (IPSAS) defines liabilities as “present obligations of the entity arising from past events, the settlement of which is expected to result in an outflow (…) of resources (…)”. When a government has committed to perform payments to the benefit of a private sector company under a long-term contract, these amounts or part of them may have to be reported as liabilities, or as contingent liabilities. An IPSAS also establishes the accounting and reporting requirements for governments as regards concession arrangements, which are arrangements that involve the private sector participation in the development, financing, operation and/or maintenance of assets used to provide public services. In general, concession arrangements will imply the recognition of a liability, which nature will depend on how the government compensates the private sector operator.
Under IPSAS, pensions and other retirement benefits provided in exchange for services rendered by employees under formal or informal arrangements and legislative requirements are recognized on an accrual basis. This involves the recognition of a liability and expense when the employee has provided the service in exchange for retirement benefits to be paid in the future. Cash payments to retirees reduce the liability. Applying these principles, the benefits under the Previdência Social, being available to qualified retired and current government employees as part of their employment conditions, should be recognized as liabilities.
The estimates are realized based on a sample of 5 public enterprises and 11 publicly-owned corporations that amount to 27 percent of the total book value of the State’s shareholdings reported in the CGE. On this sample, the equity value of the companies has been calculated based on their latest financial statements and compared to the book value reported in the CGE in 2012. The equity method is a method of accounting whereby the investment is initially recognized at cost and adjusted thereafter for the post-acquisition change in the investor’s share of net assets/equity of the investee. The surplus or deficit of the investor includes the investor’s share of the surplus or deficit of the investee (source: IPSAS7). It is to be noted that a number of discrepancies between the information reported in the CGE and the information available in the financial statements have been identified (relating to the shares held by the State, or the shares’ value).
According to Fiscal Transparency Code, an advanced practice would be to publish audited or final CGE within 6 months of the end of the financial period, a good practice would be to do this within 9 months, and a basic practice to do it within 12 months.
2013 revised budget, Mapa E, p. 798.
The FTC calls for the following consistency checks to be verified and published : (i) balance and financing ; (ii) debt issued and debt holdings, which is usually done by comparing debt office’s debt figures with central bank’s private sector asset figures, and (iii) financing and change in debt stock.
CGE 2012 mapa I-1, p. 70.
Cash balances are comprised of the following groups of accounts: (i) Treasury Single Account; (ii) Tax Collection Posts (recebedorias); (iii) Other Treasury Accounts; and (iv) Other State Accounts.
According to Fiscal Transparency Code, as regards the verification and dissemination of fiscal statistics, an advanced practice would be this to be the responsibility of a professionally independent body, a good practice would this to be the responsibility of an autonomous government agency and a basic practice would be this to be the responsibility of a specific government ministry.
As part of the judiciary, the TA and judges’ independence are guaranteed by the articles 292 and 217 of the Constitution.
The first set includes ISSAI level 1 on Founding Principles and ISSAI level 2 on Prerequisites for functioning of Supreme Audit Institutions. The level 3 on Fundamental auditing principles has only been adopted in October 2013 by INTOSAI.
Participation in the GDDS by IMF member countries is voluntary. It requires that a country undertakes three actions relative to the system, and participation depends on completion of the following actions: i) Commitment to using the GDDS as a framework for the development of national systems for the compilation and dissemination of economic, financial, and socio-demographic data; ii) Designation of a country coordinator to work with IMF staff; and iii) Preparation of metadata, using the Data Quality Assessment Framework (DQAF) format, to be disseminated by the IMF on the Dissemination Standards Bulletin Board (DSBB), on (a) current statistical compilation and dissemination practices; and (b) plans for short- and medium-term improvements in each of the four dimensions of the system. http://dsbb.imf.org/images/pdfs/gddsguide.pdf
Cenário Fiscal de Médio Prazo.
The total financing is included at least in Table A of the budget law (Equilíbrio Orçamental).
On the 26 Sub-Saharan African countries assessed in the 2012 Open Budget Survey only Mozambique, South Africa and Namibia present a budget with a share of secret items inferior to 1 percent.
Budget Law includes a breakdown of own revenues by the central, provincial and district levels and the list of institutions that collect own revenue is included in the quarterly Budget Execution Reports, Map I-1, although a minority of this revenue is extra-budgetary.
The exchange rate is not included in officially published documents but is included in the modeling.
See Relatorio de Execucao do Orcamento, REO, Jan-Sep 2013, p. 7.
Section 2, Equilibrio Orcamental, p. 7.
Article 179 of the Constitution.
Article 183 of the Constitution.
CFMP 2014–16, p. 33.
Each EPCC celebrated between the government and the contractors includes detailed information regarding the respective fiscal regime.
In this context, a Gas Master Plan for Mozambique was prepared in March 2013 by the Petroleum Governance Initiative in cooperation with the authorities.
See the report “Mozambique - Fiscal Framework Considerations for the New Resource-Rich Environment”, Fiscal Affairs Department, IMF, January 2013.
The Banco de Moçambique (BM), Banco Nacional de Investimento (BNI), and Gapi-Soc. Para Apoio a Pequenos Proj. de Investimento, S.A (microfinance company) are the main public financial corporations in Mozambique. The public insurance company sector comprises a single entity: the Mozambican Insurance Company (Empresa Moçambicana de Seguros—EMOSE).
Investment Policy Reviews: Mozambique, OECD, Paris, April 2013.
The FCA supports operating expenditures of municipalities by financing of the payment of wages and salaries, goods and municipal services.
The 2013 budget allocated 2.75 percent of the revenues generated by mining and petroleum to seven localities in three resource-rich provinces.
There are 96 Corporations, 21 Limited Corporations, and 1 Foundation under IGEPE. Two of the companies are listed in Maputo Stock Exchange BVM.
The MoF has authorized by order of April 19, 2007, conversion of credit liabilities of EDM into capital increase in the amount of 3,005,709,900 MT. (2014 Budget Annex on Public Enterprises).
Ibid IMF Country Report No. 13/200 July 2013.