Covid-19: Mozambican businesspeople contest measures to support the economy

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Covid-19: Mozambican businesspeople contest measures to support the economy

4:08 CAT | 13 Aug 2020

File photo: O País

The Confederation of Economic Associations of Mozambique (CTA) says the measures approved by the government to support the economy in the face of the Covid-19 pandemic have been ineffective, and advocates the adoption of a new response.

“Despite the best intentions in the implementation of these measures, it turns out that, to a large extent, they failed to generate the expected impact on the business sector,” CTA vice-president Álvaro Massinga said at a press conference today.

In particular, the government’s decision to postpone the payment of Corporate Income Tax (IRPC) failed to help many companies in difficulty, because of the restrictive conditions the measure carried with it, Massina explained.

The same scenario was observed in relation to the measure to reduce the cost of electricity, since many companies similarly failed to benefit from the decision, due to the tightening of the criteria.

The CTA vice president also criticised the moratorium on bank access conditions, pointing to the imposition of prior capitalisation criteria as a burden on the business sector.

“In order to minimise this cost, the intervention of the government and cooperation partners is necessary, through a financial support measure that will eliminate the capitalisation process of deferred instalments,” Massingue said.

The CTA vice-president further characterised the lines of finance opened for companies by the government as insufficient, estimating the needs covered by the support at 5%, at a cost of US$508 million (€428.6 million).

“All measures should be implemented through a comprehensive and binding instrument structured in the form of a post-Covid-19 economic recovery programme,” Massinga proposed.

Measures should focus on adaptation, resilience building and economic recovery.

Mozambique had by Wednesday (August 12) recorded 19 deaths among 2,559 cases of Covid-19, the pandemic which, according to an AFP report, has already claimed more than 743,000 lives and infected more than 20.3 million people in 196 countries and territories worldwide.

Source: Lusa