Mozambique: Companies’ losses mount; more than 12,000 workers laid off

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Mozambique: Companies’ losses mount; more than 12,000 workers laid off

2:29 CAT | 30 Apr 2020

Photo: O País

The business sector in Mozambique recorded losses of more than six billion meticais over the first 30 days of the state of emergency decreed to curb the spread of the coronavirus

During this period, about 1,175 companies closed, and about 12,160 jobs were lost.

Of the firms that closed, the Confederation of Economic Associations of Mozambique (CTA) says, about 756 are in the hotel and tourism sector, which employs a total of 5,000 workers.

Between March and April of this year, companies suffered losses in the order of 6.1 billion meticais, corresponding to US$87.1 million dollars, mainly in the tourism sector.

“The main financial and operational consequence of the implementation of these measures for companies is the reduction in the level of productive activity by 75%. That is to say, companies are operating at only 25% of their potential,” said Paulo Oliveira, vice president of the CTA’s Financial Policy team.

The tourism sector globally has been worst hit by the travel restrictions currently in place.
In Mozambique, for example, hotel occupancy has dropped to 4%, resulting in daily billing losses estimated at 98%, the CTA assessment indicates.

ALSO READ; With tourism “practically non-existent”, losses in Mozambique amount to US$30M per month – Listen

With their accounts sinking deeper and deeper into the red, Mozambican businesspeople are calling for more exceptional measures to support companies’ finances, such as the relaxation of operating costs like water, energy and tax payments.

With the extension of the state of emergency for another 30 days, the CTA is also advocating the lifting of restrictions on the number of workers in companies.

By Edson Arante

Source: O País