Mozambique: Slight recovery in Q2 2021 – CTA

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Mozambique: Slight recovery in Q2 2021 – CTA

7:47 CAT | 02 Aug 2021

Photo: CTA

The Confederation of Economic Associations of Mozambique (CTA), the country’s largest private sector association, reports that the macroeconomic environment improved slightly over the second quarter of 2021, increasing from 46% to 50%. However, it predicts a poorer third quarter, due to the tightening of Covid-19 prevention measures.

Speaking during the second edition of the Economic Briefing, CTA president Agostinho Vuma reported that business activity recovered due to the relaxing of Covid-19 countermeasures, along with the start of agricultural marketing and of agricultural and fish product exports.

“As a corollary, the Business Robustness Index improved from 28% to 29%, influenced by the revival of economic activity in the sectors of Agriculture, Hotels and Restaurants, Trade and Services and Transport, which benefited from the factors referred to, including the easing of the Covid-19 containment measures that we observed from April to last June,” Vuma detailed.

Assessing the business environment, the CTA president said that the second quarter of the year was marked by regulatory changes which had a positive impact on business activity, namely the easing of Covid-19 restrictive measures; the revocation of on-board assistance and inspection fees at border posts; and the launching of the Register of Secured Transactions.

Vuma indicated that the entry into force of the new Regulation on Costs of Administrative Jurisdiction, which institutes an increase in costs of about 170%, exacerbating transaction costs for companies still struggling with the harmful effects of the coronavirus pandemic.

As for the business outlook in general, the CTA chairman expects business performance to decline, due to the resumption of restrictive measures recently announced by the government in response to the emergence of the new Delta variant.

According to Vuma, these measures will once again limit business performance, at a time when there are no stimulus or support measures for the business sector in place.

“Our great fear is that, in the absence of stimulus to the business sector, these restrictive measures could result in a worse situation than that observed in the first half of the year, a period in which around 802 jobs were lost in 90 companies,” Vuma remarked.

Meanwhile, Vuma said that the latest developments in Cabo Delgado, recently shared by President Nyusi, open a new window of hope for the restoration of security and stability in the areas affected by terrorism, which will make possible the resumption of oil and gas projects and the positive impact that this could have on the economy.

“On the other hand, the progress in the vaccination campaign, with the announcement of the acquisition by the Mozambican state of about 11 million vaccines against Covid-19, associated with the efforts undertaken by the private sector, could increase access to the vaccine and reduce the health impacts of Covid-19,” Vuma concluded.

By Evaristo Chilingue

Source: Carta de Moçambique