How SMEs closed the business year in the red – report

Login

Register

http://www.clubofmozambique.com/

How SMEs closed the business year in the red – report

2:25 CAT | 26 Jul 2018

File photo: O País

A wave of uncertainties and high losses in the extractive industry has meant that the turnover of small and medium-sized enterprises (SMEs) contracted to supply goods and services to large projects decreased by 72 percent against the previous year, closing the 2017 fiscal year at US$105 million.

In the period under review, a total of 217 SMEs were contracted by the giant mining, hydrocarbon and metallurgical firms, against 395 the previous year, which registered a turnover of US$376 million, according to the General State Account (CGE) of 2017.

The low turnover was due to financial losses of approximately US$402.4 million accumulated by the so-called “mega-projects” last year.

The contribution of these large projects depends on the links they establish with the economy, basically consisting of the development of the network of suppliers (technology transfer), employment (consumption and growth), and pecuniary (tax, savings and external reserves).

In the year under review, Ncondezi, Mozal, Sasol, the Moma heavy sands and Revuboé mines posted combined profits totalling US$286.39 million, while Vale Mozambique and Jindal Africa recorded losses of US$688.82 million.

The negative year, in terms of overall turnover, meant large extractive industry projects in Mozambique made smaller contribution to the state coffers.

CGE data consulted by O País reveal that the Mozambique received just over US$143 million in revenues in 2017 from taxes paid by large projects and concessions. This represents 3.9 percent of total state revenue, a reduction of 0.1 percent compared to the contribution registered last year.

By Edson Arante

Source: O País