The Confederation of Economic Associations of Mozambique (CTA) has warned that if violent demonstrations continue, the country could lose up to a third of its economy by the end of this year. According to the Agência de Informação de Moçambique (AIM), the forecast was made during an event held as part of the launch of financial measures for economic recovery on Friday (28), which was attended by the ministers of Finance and Economy, as well as representatives of the business sector.
The president of the CTA, Agostinho Vuma, revealed that the damage caused by the violent demonstrations has already cost the economy close to 499.5 million dollars (32.2 billion meticals), the equivalent of 3 per cent of the country’s Gross Domestic Product (GDP). In addition, more than 17,000 jobs have been lost due to the impact of these demonstrations.
‘If this situation doesn’t change by the end of the year, we could lose up to 30 percent of our economy!’ warned Vuma, stressing that this forecast is alarming and could come true if urgent measures aren’t taken to restore economic stability and security in the country.
The CTA president emphasised that the essential condition for business recovery is the restoration of peace and security. ‘Today, it’s common for someone to come into shops and dictate prices,’ said Vuma, citing as an example the constant threats and extortion faced by businesses in places like Machava, Moamba and Boane.
He also emphasised the lack of conditions for the resumption of commercial activities, since entrepreneurs need security guarantees in order to operate. He also criticised the apparent lack of action by state institutions in defence of the population’s property and lives.
‘The time has come to act. Who is responsible for all this?’ asked the CTA president, highlighting the inefficiency of political dialogue and measures to resolve the situation.
Regarding economic recovery measures, Vuma proposed improvements to the support instruments already approved, highlighting the exclusion of indebted companies from the banking system and the need for more inclusive lines of financing. ‘Muslim entrepreneurs, for example, will not accept conditions with interest,’ Vuma pointed out.
With regard to tax measures, the CTA congratulated the government on the exemption from Value Added Tax for the entire value chain of oils, soaps and sugar. However, it was emphasised that it is necessary to act swiftly in implementing the exemption to avoid confusion in commercial establishments.
