Mozambique: CTA blames forex restrictions for falling imports and exports

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Mozambique: CTA blames forex restrictions for falling imports and exports

4:18 CAT | 16 Aug 2024

Photo: CTA

The Confederation of Economic Associations of Mozambique (CTA) reiterates that the fall in the volume of imports and exports in the country recorded recently is due to the new foreign exchange restriction measures imposed by the Bank of Mozambique. The same business sector nonetheless acknowledges that the country enjoys a notable exchange rate stability.

“Despite the exchange rate stability, the increase in net international reserves to support imports of goods and services, the worsening access to foreign exchange in the national market has been a negative factor influencing transactions,” CTA president Agostinho Vuma said at an economic briefing in Maputo on Wednesday (14-08).

The impact can be seen in “the trend in import volume, as can be seen in the average monthly drop of 2.3% from January to February, and of 25% in the first quarter of 2024 compared to the same period in 2023,” Vuma said.

He stressed that the basis for generating foreign currency is exports, which in his opinion show weaknesses.

With the exception of large projects, the coverage of exports over imports is 20%, which means that, without large projects, the supply deficit reaches the 80% mark.

Regarding macroeconomic performance, the data released indicate that there was a slowdown in economic growth in the first quarter of 2024.

“The average quarterly inflation rate fell from 6.02% to 4.68% in the second quarter of 2024, due to the start of the agricultural marketing campaign, the cotton export season, an increase in inputs in the agricultural sector and logistics costs,” Vuma said.

In addition, the reduction in MIMO rates from 17.25% in January to 15% in June influenced the reduction in interest rates on the financial markets.

“Although timidly, they are regaining a certain confidence within the business class, anhd these factors contributed to an increase in the macroeconomic environment of around 3%, rising from 45% in the first quarter to 48% in the second quarter of 2024,” Vuma said.

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Among the guests participating in the CTA Economic Briefing were the chairman of the Board of Directors of the Mozambique Stock Exchange, the general director of APIEX a representatives of CFM and other economic associations.

Source: AIM Moçambique