The International Monetary Fund (IMF) is concerned about the risks of corruption in the State Enterprise Sector (SEE) in Mozambique and wants transparency measures in its management by the government, the Lusa news agency reported on Tuesday, 23 July .
The organisation says that the conclusion is contained in an IMF evaluation report on the SEE, which is made up of around 20 companies, wholly owned by the state or in which it has a stake, and which represent a ‘risk’ to public finances, with weak accounts in recent years.
“It is also important to improve transparency in the public procurement processes of public companies to address vulnerabilities to corruption and improve the efficiency of public spending. Given the size of the sector, the government and citizens should pay attention to the procurement processes of public companies,’ reads the report, consulted by Lusa.
The document adds that Mozambique’s legal framework ‘grants public companies broad discretionary power to carry out direct purchases, in non-competitive situations and increasing the risks of corruption’.
Tmcel is one of the state-owned companies
‘Although public companies are obliged to follow principles that support transparency and open competition, they are authorised to use exceptional processes in situations of force majeure, or when it is not possible to hold a public tender, without providing objective criteria, safeguards or special approvals,’ reads the conclusions of the report, which also points to the lack of regular disclosure of data on the performance of the ESS.
The IMF also states that it is working with the Ministry of Economy and Finance to reform the ESS and is already demanding, as a first step towards greater transparency, the publication of public companies’ procurement policies, along with annual procurement plans or the implementation of beneficiary ownership transparency and anti-corruption policies.
It is also important to improve transparency in the public procurement processes of public companies in order to address vulnerabilities to corruption and improve the efficiency of public spending.Given the size of the sector, the government and citizens should pay close attention to the procurement processes of public companies
IMF
‘In the future, the authorities should consider revising the legal framework for subjecting public enterprises to public procurement rules, especially with regard to transparency requirements, while considering adequate but limited flexibility for those competing with the private sector,’ the report points out.
It adds that ‘the government should also strengthen the governance of public companies on the basis of good international practices, namely by introducing measures to strengthen the role and independence of the boards of directors of public companies’.
Mozambique Airports is one of the state-owned companies
Although recent reforms to the legal framework of public companies and ongoing efforts by the authorities have improved supervision and financial reporting, the IMF advocates more attention to corporate governance frameworks to improve the sector’s performance.
“An important area for action in Mozambique is strengthening the role, independence and autonomy of the boards of directors of public companies. The government must empower them to define their own strategy according to clear objectives and clarify the roles of the state (as owner), the boards of directors and management, guaranteeing uniformity among public companies,’ it reads.
The government should also strengthen the governance of public companies on the basis of good international practice, namely by introducing measures to strengthen the role and independence of the boards of directors of public companies
IMF
“The state should also seek to separate its ownership, regulatory and policy-making functions, where a comprehensive ownership policy, including strong transparency requirements for both SOEs and the state as owner, can guide this endeavour. The board appointment process should be formalised and carried out on the basis of competitive merit and transparent principles that seek professionalism and relevant skills,’ adds the IMF report.
The organisation stresses the need to ‘ensure that board members of public companies do not take on other roles in regulatory or supervisory bodies and declare their ownership, if any, in all public companies’.
