The data were presented by the Angolan Minister of Finance, Vera Daves, in the presentation of the revised State Budget proposal for the 2020 economic year, which is being considered in the National Assembly for general approval.
Vera Daves said that the revised state budget was estimated at 13.4 billion kwanzas, reflecting a 15.7 percent reduction against the current state budget.
According to the minister, the financing plan reflects a significant reduction in tax revenues, which have contracted by nearly 30 percent compared to the current state budget.
Vera Daves stressed that, in this GSB proposal, the executive privileges the increase in capital expenditure, recognizing the important role of public investment as a vehicle for economic growth, a commitment that gave life to the Integrated Plan of Intervention in Municipalities (PIIM).
"In this path, capital expenditure increases 9.3 percent compared to the GSB in force, and should reach about 1.4 billion kwanzas," he said.
The minister also highlighted the reduction of 1.6 per cent in expenditure on personnel, a result of the immediate effects of the reorganization of the executive, as well as the reduction of 13.4 per cent of expenditure on goods and services.
The holder of the Finance Ministry stressed that expenditure on capital and debt repayments, i.e. reimbursements, excluding interest payments, shows a contraction of 23 per cent, compared to the State Budget in force, standing at 5.5 billion kwanzas, of which two thirds are for the repayment of domestic debt.
"This evolution already considers the closing of negotiations with our main creditors, towards the smoothing of the debt service path", said the minister.
According to Vera Daves, with the sum of interest and capital amortizations, the weight of financial expenditure reduced from 60.7 per cent to 55.9 per cent of the total GSB, "which allowed the liberation of fiscal space for capital expenditure, which has a greater multiplying effect on the economy and job creation.
The government stressed that the revised State Budget proposal was prepared "at a time of many uncertainties, determined by the adverse effects of covid-19", which has degraded the internal conditions of business viability in recent months.
From a functional perspective, the minister said, the proposal for revision of the GSB maintains the social sector with the highest weight - 40.7 percent of primary tax expenditure - a figure that still corresponds to 17.9 percent of total expenditure and 7.6 percent of Gross Domestic Product, with a budget that amounts to 2.4 billion kwanzas.
"Although the social sector budget represents a decrease of 5.9 per cent in relation to the initial state budget, for reasons that are well known related to the strong falls in revenue, it is noted that the budget allocation for the health sector increased by 2.4 per cent, to 816.7 billion kwanzas," said the minister.
In relation to the real sector, it is expected that the GDP of the hydrocarbon sector will contract by 7 percent and the other sectors by 2.1 percent, said the minister, stressing that the combination of these components makes the executive project a contraction of the economy of 3.6 percent, "which would represent the prolongation of an unwanted cycle of contraction of GDP.
"The new financing plan for the state budget, combined with the expected depreciation of the kwanza, leads to a debt 'stock' at the end of 2020 to 123 percent of GDP," the minister said, noting that in order to ensure a sustainable reduction in this ratio over the next few years, the executive plans to draw up a fiscal strategy that will have a medium-term vision.
