Insurance company Emose warns that losses from protests in Mozambique are not covered
Government pays another portion of its debt to the private sector, informal businesses to be supported once they “move towards the formal”
2:15 CAT | 29 May 2020
Photo: A Verdade
The Minister of Economy and Finance has announced that the government is going to take advantage of the Covid-19 pandemic to pay another portion of the debt it has accumulated with the private sector since 2007.
“We will pay the second group of companies that we had to regularise,” Maleiane said, and “make an advance payment of the securities on the Stock Exchange”.
However, for the majority of Mozambicans who make a living from informal businesses “to be supported”, Adriano Maleiane made it clear that they must first move “towards the formal”.
Responding to questions from members of the Democratic Movement of Mozambique in the Assembly of the Republic, Minister Maleiane said that, regarding support for small and medium enterprises (SMEs) during the Covid-19 pandemic, “we decided that we will pay the second group of companies that we had to regularise: those suppliers that have validation (of state debt) but lacked regularisation in the Administrative Court. We did this work, and, as of next month, we will pay about 1,933 companies (…)”.
@Verdade learned that 2.7 billion meticais are going to be paid to 209 companies based in Cabo Delgado province, 100 companies in Niassa province, 207 in Nampula, 271 in Zambezia, 52 in Tete, 217 in Sofala, 164 in Manica, 132 in Gaza, 72 in Inhambane, 133 in Maputo province and 47 in Maputo city. However, the largest “slice of the cake” – two billion meticais – will be paid to 329 “companies at central level”.
“As if this were not enough, in the first group, we had securitised the remainder of the 60 million which we paid in cash, plus 10 percent. This time, we will make an advance payment on securities on the stock exchange up to the amount of 200 million meticais. We will pay 11 companies in advance. And there is an additional amount that we have to pay of around 884 million meticais,” the minister announced.
Calculations made by @Verdade, taking into account that the debt accumulated since 2007 amounted to 26.7 billion meticais and that, between late 2018 and early 2019, 3.2 billion meticais were repaid, the Mozambican state will still owe the private sector, after this operation, just over 20 billion meticais, of which 5.8 billion is debt to suppliers, which is still in the process of being validated by the General Finance Inspectorate.
There will be no support for informals until they register with the Tax Authority
Adriano Maleiane also announced during questions to the government on Wednesday (27), that “a credit line for small and medium enterprises which the state that is putting in place will come into effect in June. It will be managed by the banking system with clear rules to support the economic rehabilitation of agro-business, the processing and manufacturing industry, the hotel and tourism industry, private education companies. The fact sheets making known the terms of access will be publicised very soon. We will have two purposes, one for short-term financing, to repay in a maximum of one year, and then we will have another investment, which can be paid in up to three years, at a rate that we assume will be no more than seven percent”.
But the Minister of Economy and Finance has made it clear that there will be no direct support for informal businesspeople until they register with the Tax Authority. “As to the question of how we deal with the informal sector in this situation, the conclusion that we reached is that they first have to move towards formalisation, in order to have formal support from the government.”
“We are negotiating US$160 million through the INAS, but we are also negotiating with municipalities to discipline (the informal sector),” he said.
“We do not want just to support them. We have to take this opportunity to persuade them to leave the streets and go to the markets, and we want to involve the municipalities in helping free our city sidewalks of trading,” he said, speaking to the almost 10 million informal businesspeople in Mozambique.
By Adérito Caldeira
Source: A Verdade
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