CTA welcomes signs of economic recovery

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CTA welcomes signs of economic recovery

9:41 CAT | 21 Jul 2017

Magazine Independente (File photo) / Agostinho Vuma

The Confederation of Mozambican Business Associations (CTA) on Friday welcomed the signs of an economic recovery that have appeared in the first half of the year, particularly with the appreciation of the national currency, the metical, in international markets.

The CTA was also encouraged by the inflation rate for the first six months of the year which, according to the National Statistics Institute (INE), stood at just 3.82 per cent compared with 9.28 per cent during the same period in 2016.

The CTA also noted that economic growth in the first quarter of the year is estimated to be 2.9 per cent compared with just 1.1 per cent during the last quarter of 2016.

However, speaking at a conference in Maputo on Friday, CTA chairperson Agostinho Vuma warned that he was concerned about the country’s high fiscal risk and its impact on the business environment. In particular, he drew attention to the high level of external debt.

Vuma stressed that the recent publication of the executive summary of the audit by the firm Kroll Associates on the loans given to the companies Proindicus, MAM, and Ematum should provide an opportunity for all the country’s stakeholders to analyse public policies.

He highlighted the need to point out, with courage, what went wrong and the steps that can be followed to correct the situation and ensure that the country does not repeat the mistakes of the past.

Vuma stated that, given the situation the country finds itself in, the business community expects to see the government adopt practical measures to restore credibility and trust in the good name of the country and its people.

Proindicus, MAM, and Ematum took out loans totalling over two billion US dollars in 2013 and 2014, arranged by the banks Credit Suisse and VTB of Russia. None of the companies ever came anywhere near being able to repay their loans. Public attention has focussed on what the funds were spent on and whether government guarantees underpinning the loans are valid.

Source: AIM