Mozambique: IGEPE reiterates intention to reduce participation in Emose – Noticias

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Mozambique: IGEPE reiterates intention to reduce participation in Emose – Noticias

3:22 CAT | 08 Mar 2022

File photo: Noticias

The Mozambican state, through its State Holdings Management Institute (IGEPE), will soon reduce its participation in the Mozambican Insurance Company (EMOSE), with a view to creating more business and investment opportunities.

According to the IGEPE, EMOSE has recently been losing a lot of business simply because it is mostly owned by the state.

This position was reiterated in Maputo yesterday by IGEPE administrator Raimundo Matule during a working visit by the Parliament’s Planning and Budget Commission, within the scope of its inspection and supervision activities.

Matule did not elaborate on by how much the state intends to reduce its participation in EMOSE, since the results of the study currently underway are still awaited, and are expected to furnish recommendations on the matter.

Currently, the state holds a 70% stake, approximately, in EMOSE.

Matule said that the process could involve the integration of more private sector companies into Emose, where, at the moment, 30% of the capital is private.

Part may be placed on the market through the Mozambique Stock Exchange (BVM), allowing the participation of small national investors.

“We are not going to sell EMOSE, but reduce state participation. It operates in the commercial insurance market with more than 20 companies in the area. Apparently, some say yes, others say that no, the state should not continue to be the reference shareholder in an insurance company and at the same time a supervisory entity,” Matule noted.

According to Matule, the other factor is that, as soon as investors hear that the state owns a company, they practically discount it on the grounds that state companies are not transparent.

Public companies however play a leading role in boosting the Mozambican economy, despite being a source of fiscal risk for finance if their performance results in the accumulation of contingent liabilities.

Of a total of 66 companies under IGEPE control, only eight paid dividends, totalling 6,279,527 thousand meticais, so 63 (89.0%) distributed no dividends at all, for various reasons, including the negative impact of Covid-19.

Source: Noticias