Mozambique’s Confederation of Economic Associations (CTA) is pressuring the Bank of Mozambique (BdM) to reconsider the withdrawal of the 50% co-payment on fuel import bills. This measure was taken in response to the challenges faced by Mozambican companies with regard to payments abroad since the fourth quarter of 2023.
According to a statement issued by the CTA and made public on Wednesday, March 27, foreign transactions have been increasingly difficult, and this difficulty persisted into the first quarter of 2024. The CTA attributes a large part of this situation to the BoM’s decision to withdraw the co-payment of the fuel import bill, as well as the increase in the mandatory reserve rate from 11% to 39.5%.
The combination of these measures resulted in a significant reduction in foreign currency liquidity flows to the market. According to CTA, the difference between what commercial banks sold to companies and what they bought from them increased to 40% in the fourth quarter of 2023, compared to the third quarter of the same year.
CTA argues that this situation is damaging Mozambican companies and hindering commercial transactions. To solve this problem, it proposes that the BdM consider the possibility of making at least a 50% contribution to fuel bills and other products that are critical to the economy, such as raw materials for food products.
It is important to note that the Bank of Mozambique announced in May 2023, without much detail, that it would no longer contribute to the payment of fuel import bills into the country. CTA hopes that the BdM will re-evaluate this decision and restore the co-payment, in order to ease the pressure on Mozambican companies and stabilize the fuel import market.
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