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Mozambique: Central bank approves Business Development Support Fund
3:08 CAT | 22 Jun 2023
Photo: CTA
The Confederation of Economic Associations of Mozambique (CTA) announced this Wednesday (21) in Maputo the approval by the central bank, the Bank of Mozambique, of the creation of the Business Development Support Fund (FADE).
“With this approval, CTA can now start operating the Business Development Support Fund (FADE), whose objective is to promote the inclusion of SMEs in the local economy, addressing their financing needs and other constraints which compromise the effective supply and distribution of goods and services in the supply chain of large operators and mega-projects,” a note from the CTA reads.
“Specifically, the FADE will achieve, for its investors, a minimum rate of attractiveness for a certain type of investment; improve access to short-term trade finance and to medium-term capital goods finance by SMEs, especially those that are part of value chains of large projects; and will promote the development of entrepreneurship among locals by providing them with business development support services,” the CTA communique explains.
“The adoption of this measure will contribute to bringing greater fluidity to the productive sector of the excess liquidity reported in the national financial sector, situated at around 60 billion meticais, which will represent an alternative to financing and reinforce the productive and competitive capacity of our business sector,” the chairman of CTA, Agostinho Vuma, said, cited by Carta de Moçambique.
Speaking during the first of three days of the largest annual conference of the private sector (XVIII CASP 2023), CTA chairman Agostinho Vuma also considered that the measure would serve as an essential foundation for promoting comprehensive business access to the benefits arising from the materialization of this fund, and also from the Mutual Guarantee Fund already announced by the government.
Vuma also highlighted that this measure results from the CTA’s advocacy for the creation of financial instruments to diversify credit sources for entrepreneurs in their desire to mobilize greater investments using increasingly competitive financing and with lower interest rates.
“We want to mention that the necessary advances that the instrument will produce within the framework of the implementation of the financial measures provided for in the Package of Economic Acceleration Measures, launched by the President of the Republic in August 2022, will be immeasurable,” Vuma said.
The CTA chairman also congratulated the management of the Bank of Mozambique on accepting the proposal to create the FADE, a measure announced right at the start of the CASP. Vuma said that the fund would encourage the private sector to increase production and productivity.
Specifically, FADE aims to promote the inclusion of small and medium enterprises (SMEs) in the local economy, addressing their financing needs and other constraints that compromise the effective supply of goods and services in the supply chain of large operators and mega-project markets.
CASP will provide an opportunity for the private sector to talk to the government at the highest level about the business environment and measures to make the country more attractive for investments. Today and tomorrow, the conference features high-level panellists and international entrepreneurs, some of them billionaires such as Patrice Motsepe and Mathew Phosa, as well as major international financial institutions such as Euro Exim Bank, African Trade Insurance, Trade and Development Bank, Development Bank of Southern Africa, among others.
Among the panellists, the president of CTA highlighted the Minister of Transport and Communication Mateus Magala, who will speak on the role of strategic infrastructures and development corridors for industrial competitiveness. Here, the private sector will have the opportunity to interact with the government on what is being done to improve the competitiveness of our development corridors, namely Nacala, Beira and Maputo.
“The Minister of Economy and Finance, Ernesto Max Tonela, will also speak at CASP, about what the government is doing to facilitate access to financing for companies, with emphasis on strategic sectors such as agriculture and industry, while his colleague from Industry and Trade will interact on measures to induce industrial competitiveness. The Minister of Mineral Resources and Energy, Carlos Zacarias, in turn, will bring up the topic on the allocation of domestic gas to the industrial sector and the business opportunities that this will represent. Here, we will have a specialist in the structuring and financing of domestic gas projects who will talk about this topic” added Vuma.
CASP 2023 has 10 confirmed country participants including Brazil, Portugal, Angola, Zimbabwe, South Africa and Mauritius. The CTA has a portfolio of projects estimated at US$1.4 billion with the participation of more than 10 international financial institutions.
Source: Carta de Moçambique / CTA
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