Mozambique: ‘Companies are operating at 25% of capacity’ – employers

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Mozambique: ‘Companies are operating at 25% of capacity’ – employers

10:06 CAT | 27 Apr 2020

File photo: Lusa

The Confederation of Mozambique’s Economic Associations (CTA), the country’s largest employers’ organisation, on Friday said that companies are operating at 25% of their capacity, due to the impact of Covid-19, advocating greater flexibility in support for business.

Bernardo Cumaio, president of the financial policy portfolio of CTA, stressed that the pandemic caused by the new coronavirus has caused a substantial slowdown in the level of productive activity and could significantly affect the growth of the economy and the stability of jobs.

Citing data from the Mozambican government, Cumaio pointed out that more than 364 companies have suspended activity, affecting more than 10,000 jobs, mainly in the hotel and restaurant sector.

To contain the slowdown in productive activity, the executive should make access to support for the private sector more flexible, the CTA leader said.

The executive should speed up companies’ access to the $500 million (€463.1 million) financing line created to ensure greater availability of foreign currency in the market and to meet the urgent need for imports of products essential to mitigate and combat Covid-19.

“Given the shortage of foreign exchange in the market, CTA considers it necessary to find better practices for intervention on the foreign exchange market to make this measure more operational and ensure access to foreign exchange for businesses”.

Direct sale on the interbank money market would be the most appropriate option, Bernardo Cumaio said.

Mozambique is in a state of emergency from the 1 April until the 30 April of next month, as part of the prevention of Covid-19, and it is not yet clear whether there will be an extension of the measure.

During this period, education, entertainment, and public attendance, in many state institutions, are closed.

Companies should have only one-third of their staff on duty, obliging them to work on a rotating basis.

Mozambique has officially 76 positive cases of infection by the new coronavirus, nine recoveries and no deaths.

Source: Lusa