Mozambique: CTA Business Robustness Index slips in Q1

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Mozambique: CTA Business Robustness Index slips in Q1

8:34 CAT | 02 May 2023

Photo: CTA

Mozambique’s Business Robustness Index, presented yesterday, fell by one percentage point to 28% in the first quarter of 2023, against 29% in the previous quarter.

The Business Robustness Index, produced by the Confederation of Economic Associations of Mozambique (CTA), was presented in Chimoio, Manica province, this Thursday (27-04), during the 12th Edition of the CTA Economic Briefing.

According to the CTA, the slowdown in the performance of Mozambican companies results, in part, from a drop in demand in the tourism sector.

“The holy period of Ramadan [the Muslim fasting month], fuel costs and the rise in interest rates continue to be the main factors impacting business performance,” CTA vice-president Vasco Manhiça noted in his opening speech.

The CTA also cited the loss of agricultural production due to floods and the rise in logistics costs and bank charges among other factors contributing to poor performance in the private sector companies in the first three months of the year.

Gaza and Inhambane provinces registered the largest decline, the index there falling from 29 to 26%. Nampula fell from 28% to 25%, and Maputo city from 30.3 to 30%.

The provinces of Tete, Sofala and Manica held their ground at 29% while Zambézia province also registered no change against the fourth quarter of last year, remaining at 25%.

The CTA foresees continuing challenges in the second quarter, with neither the performance of net international reserves nor the demand for imports offering conditions to reduce interest rates.

“The recent measure by the Bank of Mozambique to cut the co-payment in the fuel import bill from 100% to 60% and the already-announced rise in fuel prices are putting pressure on companies’ costs,” the CTA summary underlines.

Source: Carta de Moçambique