Mozambique: Reversing price increases

By on September 9, 2010
The Mozambican government has backtracked, it gave up. Planning Minister, Aiuba Cuereneia,

said the government will introduce subsidies to allow the price of bread to come back down, after the riots and demonstrations that killed 13 people and injured more than 600 others, following the announcement of an increase of 17 to 33% of the price of bread which had inflamed the poor suburbs of Maputo, before spreading to other cities. Despite a high growth rate since the end of the Civil War that followed independence from the former Portuguese colony, Mozambique remains one of the world’s poorest countries. 65 % of the 23 million Mozambicans live below the poverty level,. The government has also decided to cancel some increases in water prices and electricity and will try to reduce public spending to free up funds and subsidise the prices of commodities whose prices have soared, partly because the depreciation of the national currency, the Metical in relation to the South African rand in a country heavily dependent on imports from its neighbour. In another gesture of reconciliation, the ministers decided to freeze, until the end of the year, the salaries of senior officials, directors of public companies and reduce their air travel costs.

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