Mozambique News Agency
Maputo, 1 Sept (AIM) – The Mozambican government remains committed to finding solutions to offset the effects of the international financial crisis, which oblige countries with fragile economies, such as Mozambique, to take measures that raise the cost of living.
This was the position taken on Wednesday by the Industry and Commerce Minister, Antonio Fernando, when he explained the reasons behind the rise in the price of energy, water, bread and other basic goods. He further argued that this is a cyclical phenomenon.
Antonio Fernando, who was speaking in an interview with the television channel TVM, pointed to two main problems. Firstly, oil prices have risen on the international market. Secondly, climate change and other factors have lowered world production of wheat, leading to sharp price rises.
However, the Minister pointed out that “one of a list of measures taken to mitigate the effect of the rise in the price of wheat was for the Government to exempt grain imports from customs duties and Value Added Tax, leading to a reduction in tax revenue of about 33 million US dollars”.
“We have to understand that the financial crisis has still not passed and will take time. Therefore, we are still suffering the impact, for Mozambique is not an island. There have been price increases in Portugal, Spain, Greece and even in neighbouring South Africa,” stated Antonio Fernando.
To counter these price rises in the longer term, the Government has drawn up a plan of action to make the country self-sufficient, said Antonio Fernando, stressing that the solution needs to be increased domestic production.
Last year Mozambican exports fell by 19 per cent compared to 2008, due to falling international demand and lower prices. In the face of these setbacks, Mozambique has seen increases in the price of fuel, energy, water and bread.
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