Mozambique: Audit raises doubts about central bank’s recent annual accounts

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Mozambique: Audit raises doubts about central bank’s recent annual accounts

12:22 CAT | 05 Apr 2022

File photo: Lusa

An audit has expressed reservations about the 2020 financial statements of the Bank of Mozambique (BM), the country’s central bank, as had already happened in relation to those for 2019, reads the annual report published by the financial institution on Thursday and consulted by Lusa on Tuesday.

The BM published the 2019 report and accounts in January and has now made the 2020 accounts public, with three reservations entered in the audit report.

“Due to the fact that the predecessor auditors have issued an adverse opinion on the financial statements for 2017 and 2018 (…) we are unable to ensure the completeness, existence and accuracy of the opening balances, nor their impact on the closing balances,” the opinion from independent auditor BDO, signed on Thursday, reads.

At issue is the fact that in 2017 and 2018 the BM did not consider it “relevant” to consolidate the accounts of the subsidiary Kuhanha – Pension Fund Management Company of the employees of the central bank, which acquired a majority stake in Moza Banco, one of Mozambique’s main commercial banks.

In a second point, the auditor said that since 2005 the Mozambican state had never delivered to the World Bank, public debt securities provided for by law amounting to 9.2 billion meticais (132 million euros) – nor did the central bank recognise the accumulated revenues of 12.9 billion meticais (185 million euros) associated to this “state debt” to the market regulator.

In another note, it also noted that the BM had not recorded 10.7 billion meticais (152 million euros) in liabilities, in line with accounting standards, “thus affecting liabilities and equity by the same amount.

According to the report and accounts, the central bank closed the 2020 consolidated financial year with a loss of 1.3 billion meticais (18 million euros), an improvement on the previous year’s loss of 4.6 billion meticais (65 million euros).

The report and accounts have been available since Thursday on the official website of the bank of Mozambique.

Source: Lusa