The CTA warns that a foreign currency shortage may lead to business bankruptcies in Mozambique, contradicting the Bank of Mozambique’s claims of sufficient supply. With unpaid import invoices totaling $402 million, the liquidity crisis affects manufacturing and tourism sectors. The CTA encourages affected companies to submit unpaid invoices to prompt necessary payments from the central bank.
The Confederation of Mozambican Business Associations (CTA) has raised alarms over a foreign currency shortage locally, warning it could lead to bankruptcies among businesses. In contrast, the Bank of Mozambique asserts there are adequate foreign currency reserves to meet market demands. CTA Chairperson Agostinho Vuma highlighted the dire liquidity situation, evidenced by substantial unpaid import invoices amounting to $402 million lodged at commercial banks in the third quarter of 2024.
Vuma criticized the central bank’s dismissal of business concerns, citing communication breakdowns and a lack of responsiveness during dialogue sessions aimed at addressing the liquidity challenges. Notably, foreign net assets of commercial banks have deteriorated, dropping by 12.8% from November 2023 into 2024, and 47.5% over the past two years. This decline is particularly alarming for the manufacturing sector, exclusively impacted by raw material and equipment imports.
The tourism industry is also under strain, as international airlines are halting ticket sales through Mozambican agencies due to revenue repatriation issues, which rely on foreign currency. In response to these pressures, the CTA is inviting companies with unpaid invoices exceeding three months to submit their documents to facilitate payments through the Bank of Mozambique. This initiative aims to address the critical cash flow issues faced by local enterprises in the current economy.
In Mozambique, access to foreign currency is crucial for businesses, particularly those reliant on imports. The disparity in opinions between the CTA and the Bank of Mozambique reflects the broader economic challenges confronting the nation, particularly concerning inflation and liquidity. The commentary from different stakeholders indicates varying levels of access and availability of foreign currency, which can significantly impact commercial operations and the overall economic environment.
The CTA’s call for companies to submit unpaid invoices highlights the significant struggle businesses face due to foreign currency shortages in Mozambique. Concurrently, the conflicting viewpoints between the CTA and the Bank of Mozambique underscore the complex issues plaguing the financial ecosystem. Ultimately, businesses risk bankruptcy if these currency challenges remain unaddressed, jeopardizing the country’s economic stability.
Original Source: clubofmozambique.com
