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Businessmen Want BoM to Reconsider 50% Subsidy on Fuel Import Bills

Businessmen Want BoM to Reconsider 50% Subsidy on Fuel Import Bills

In order to deal with the problem of foreign payments that Mozambican companies have been facing since the fourth quarter of 2023, the Confederation of Economic Associations (CTA) has proposed that the Bank of Mozambique (BoM) re-evaluate the situation and consider the possibility of making at least a 50 per cent contribution to fuel bills and other products that are critical to the economy, such as raw materials for food products.

According to a CTA statement made public on Wednesday 27 March, external transactions became more difficult in the fourth quarter of 2023, and the scenario continues into the first quarter of 2024.

The CTA document explains that the situation was largely caused by the BoM’s decision to withdraw its contribution to the fuel import bill, as well as the increase in the rate of compulsory reserves from 11 per cent to 39.5 per cent.

“These measures, combined, reduced the flow of foreign currency liquidity into the market. As a result, the difference between what commercial banks sold to companies and what they bought from them is 40 per cent in the fourth quarter, compared to the third quarter of the same year,” explains the CTA.

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It should be noted that the Bank of Mozambique announced, without much detail, in May 2023, that it would no longer contribute to the payment of invoices for fuel imports into the country.

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