Pemba Municipality: MZN 800 Million Debt Prompts Financial Reforms

Maputo — A debt exceeding 800 million meticais (12.5 million US dollars at the current exchange rate) has been compelling the Municipality of Pemba, in the northern Mozambican province of Cabo Delgado, to make financial reforms aimed at boosting revenue collection capacity. The information was shared by Satar Abdulgani, Mayor of Pemba, when he was interviewed by AIM on the sidelines of the 6th Ordinary Session of the National Coordination Council. According to Abdulgani, the current administration inherited a debt exceeding 800 million meticais, which constrains the municipality's management, despite revenue collection having grown to over 150 million meticais annually. "The municipality of Pemba is one of the most indebted municipalities in Mozambique. However, the digitization of processes and the expansion of the tax base have allowed for a significant increase in the collection of municipal taxes and fees", he said. Keep up with the latest headlines on WhatsApp | LinkedIn According to the mayor, revenue collection has grown by more than 200 percent compared to previous terms. However, these figures do not represent solely cash revenue as "part of the total stems from mechanisms to offset obligations between the municipality and third parties." By way of example, he explained that if an entity owes the municipality 10 million meticais, while the municipality owes seven million to that same entity, the two obligations can be offset against each other. "This allows the municipality to recognize 10 million in revenue and reduce its own debt by seven million, leaving a remaining balance of three million." According to the mayor, the current revenue-generating capacity has made it possible to cover essential expenses. "Since the start of the current term in 2024, the Municipality of Pemba reports no delays in salary payments. We have never had a single month, not even one, of delay in salary payments", he said. He also explained that the municipality is preparing to publish a list of debts that lack complete administrative files. "Alleged creditors will have 30 days, as provided by law, to present documents supporting their claims. Otherwise, the files may be submitted to the Municipal Council for write-off," he warned. For debts that have been duly recognized, the municipality has adopted a gradual repayment plan. It currently allocates a monthly sum of over three to four million meticais to pay third parties, including monthly agreements ranging from 300,000 to 600,000 meticais with various creditors. Get the latest in African news delivered straight to your inbox By submitting above, you agree to our privacy policy . We need to confirm your email address. To complete the process, please follow the instructions in the email we just sent you. There was a problem processing your submission. Please try again later. Abdulgani also revealed that the municipality engaged external entities, specifically Ernst & Young and KPMG, to evaluate its financial model. "Municipality is open to audits by competent public institutions, including financial oversight bodies and the Administrative Tribunal, the body responsible for checking the legality of public expenditure." "This mechanism is vital for strengthening transparency and the management of municipal finances", he added. Read the original article on AIM . AllAfrica publishes around 600 reports a day from more than 90 news organizations and over 500 other institutions and individuals , representing a diversity of positions on every topic. We publish news and views ranging from vigorous opponents of governments to government publications and spokespersons. Publishers named above each report are responsible for their own content, which AllAfrica does not have the legal right to edit or correct. Articles and commentaries that identify allAfrica.com as the publisher are produced or commissioned by AllAfrica . To address comments or complaints, please Contact us . AllAfrica is a voice