Mozambique: Businesses call for exchange rate stability amid forex shortage concerns

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Mozambique: Businesses call for exchange rate stability amid forex shortage concerns

8:29 CAT | 25 Jul 2025

Photo: Diário Económico

Mozambican businesspeople on Friday called for macroeconomic policies that promote exchange rate stability in the country in the face of the foreign currency shortage, warning that the current problem threatens to lead to a complete shutdown of business.

“The private sector calls for the implementation of macroeconomic policies that promote greater exchange rate stability and encourage domestic foreign exchange generation through the diversification of exports, increased domestic production to replace imports, and mechanisms to encourage foreign direct investment (FDI), especially in the sectors that contribute the most to foreign currency capture,” said Álvaro Massingue, president of the Confederation of Economic Associations of Mozambique (CTA).

Massingue was speaking during the 11th Business Environment Monitoring Council with the Mozambican government in Maputo this Friday, where he reiterated that the foreign currency problem was affecting the economy.

“The persistent shortage of foreign currency in the country constitutes one of the main constraints to the efficient operation of productive sectors, particularly manufacturing, commercial agriculture, tourism, mining, and logistics. The difficulty in accessing foreign currency prevents the timely acquisition of raw materials, agricultural inputs, spare parts, fuels, and essential equipment, negatively affecting the production levels, productivity, and competitiveness of national companies,” Massingue noted.

In the same statements, the president of the CTA, the largest representative of the private sector, said that the shortage of foreign currency “weakens the ability to fulfil contracts with international suppliers” and compromises value chains.

“In some cases, it leads to partial or total shutdowns of operations, job losses, and reduced tax revenues,” said the head of CTA.

On July 15, the Mozambican president accused the banks of “creating” a foreign exchange shortage and turning it into a “business opportunity,” warning that there was never a shortage of foreign currency for dividend distributions.

Mozambican Net International Reserves (NIR) renewed four-year highs, rising to US$3.825 billion in May, according to central bank data, as reported this month by Lusa.

These foreign currency reserves had reached their lowest level in about a year in February, falling to US$3.593 billion, before three consecutive monthly increases. They grew 1% in March, to US$3.619 billion, 4.3% in April, and another 1.5% in May, according to the Bank of Mozambique’s most recent statistical report.

In May, the amount of international reserves covered more than three months of estimated import needs.

The governor of the Bank of Mozambique, Rogério Zandamela, had acknowledged in May that the country witnessed a “dollarization” of the economy between the end of 2024 and the beginning of this year, following the post-election crisis, particularly in the attempt to withdraw foreign currency from banks.

“Today, looking historically—at the time it wasn’t clear what that was—January was certainly the most difficult period […], I would say, from the end of the year, December, January. Then things calmed down,” the governor of the central bank said, responding to reporters at the end of the Monetary Policy Committee (CPMO) meeting.

Zandamela was questioned, in particular, about the guarantee he had made at the end of March of sufficient liquidity in the foreign exchange market, when businesspeople complained about the lack of access to foreign currency for imports. In the following month of June, the Bank of Mozambique adopted regulations to facilitate the process.

Source: Lusa