Mozambique: Government and banks seek to solve airline funds repatriation problem – Watch

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Mozambique: Government and banks seek to solve airline funds repatriation problem – Watch

3:31 CAT | 17 Jun 2025

Screen grab: MBC TV

Mozambique’s Minister of Finance, Carla Loveira, yesterday said that a process was “underway” with the banks to make available the necessary currency for the airlines to repatriate funds hereto blocked.

“We are working with the banks to ensure the export of currency that is being requested,” the minister told journalists on the sidelines of the 16th Scientific Conference of the Bank of Mozambique in Maputo today.

Lusa reported on June 2nd that at the end of April, airlines had €1.136 billion in funds blocked for repatriation in several countries, a list that is now headed by Mozambique, according to the International Air Transport Association (IATA).

“Mozambique has climbed up to the top of blocked funds countries, withholding US$205 million from airlines, compared with US$127 million in October 2024,” reads an IATA statement seen by Lusa.

The Mozambican government yesterday advocated a gradual and calibrated liberalization of the country’s capital account, relating to international transactions, so that the measure does not penalize national accounts, particularly with regard to foreign exchange needs for imports and exports of capital.

READ: Mozambique: Government wants gradual, calibrated capital account liberalisation

“We are convinced that the liberalization of the capital account must be gradual and carefully calibrated, taking into account the specificities of our economy, the robustness of the financial system, as well as the risks associated with the volatility of capital flows,” Minister Loveira said at a central bank event.

The capital account, the subject of these conferences, in the context of the balance of payments, refers to international transactions of non-financial assets and capital transfers, such as debt forgiveness or subsidies for capital projects.

The minister recalled that Mozambique had already approved, in December 2022, the revision of the Exchange Law, to “improve the flexibility of the exchange market, through the gradual removal of restrictions on the capital account, thus contributing to the flexibility of the movement of capital between Mozambique and the rest of the world”.

According to previous information from IATA, the airline funds blocked from repatriation at the end of April amounted to US$1.3 billion globally, with the Africa and Middle East (AME) region representing 85% of the total (€1.1 billion).

READ: Mozambique tops the list of 10 countries responsible for 80% airline funds blocked from repatriation by governments – IATA

“This is a significant amount, although it is an improvement of 25% compared with the US$1.7 billion reported for October 2024. IATA urged governments to remove all barriers preventing airlines from the timely repatriation of their revenues from ticket sales and other activities in accordance with international agreements and treaty obligations,” said the international aviation industry organization.

Quoted in the same report, IATA Director General Willie Walsh stated that “ensuring the timely repatriation of revenues is vital for airlines to cover dollar-denominated expenses and maintain their operations”.

“Delays and denials violate bilateral agreements and increase exchange rate risks. Reliable access to revenues is critical for any business—particularly airlines which operate on very thin margins. Economies and jobs rely on international connectivity. Governments must realize that it is a challenge for airlines to maintain connectivity when revenue repatriation is denied or delayed,” Walsh added.

The Confederation of Economic Associations (CTA) of Mozambique warned on February 18 that the lack of foreign exchange in the market was leading airlines to limit activity in the country, calling for urgent measures to address the problem.

Source: Lusa