Mozambique Business Association calls for rescheduling of government’s debt to private companies

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Mozambique Business Association calls for rescheduling of government’s debt to private companies

11:50 CAT | 24 Jul 2017

Fle photo / CTA office in Maputo

The Confederation of Mozambican Economic Associations (CTA), the country’s main employers’ association, has proposed that the government accept a rescheduling of state debt to companies, in order to recover private sector liquidity.

“We propose that the Government approach the companies and discuss the reschedule the payment of invoices, because paying little is clearly better than not paying anything,” CTA chairman Agostinho Vuma said on Friday.

Speaking at the Fourth Business Environment Monitoring Council held in Maputo, Vuma said that state debts to companies contributed to financial disruption in the private sector and the deterioration of the Mozambican business environment.

“The picture that the country presents vis-a-vis doing business is worrying,” the chairman of CTA added.

Vuma said he thought that the reforms that the country had made to improve the business environment had not gone far enough to make Mozambique a more attractive destination for domestic and foreign investment.

“The number of reforms is not enough for the country to be better ranked in the business environment index, and the reforms made have not been properly implemented since they have not ensured that Mozambique improves its business facilitation practices,” he added.

Vuma did not specify the amount that the Mozambican state owed companies, but the government has acknowledged several times that it faces difficulties settling debts for works, goods and services.

Mozambique’s public finances are under tight restraint due to the economic crisis that the country has faced in recent months. In 2016, Mozambique’s gross domestic product recorded the lowest growth in decades at just 3.8 percent, with a modest recovery to 4.7 percent expected this year.

Source: Lusa