The Mozambican Confederation of Business Associations (CTA) today held its 5th Economic Briefing, analysing the performance of Mozambique’s economy and offering insights into the country’s macroeconomic scenario. The online conference was attended by several key players in Mozambique’s private sector and the Mozambican Minister of Industry and Commerce, Carlos Mesquita.

CTA’s President, Agostinho Vuma, made the introductory speech in which many of the key insights were offered for the last trimester of 2020 as well as the perspectives for 2021 and its many challenges.

Agostinho Vuma explained that the Macroeconomic Index for the last trimester of 2020 fell 1%, from 47% to 46%, owed to several factors, which include, in summary:

• the Metical’s depreciation over 2020’s last trimester, oscillating on average to 74,6 metical per US dollar;
• the maintenance of fuel prices;

• inflation, which rose 3,12 points, sitting at 4,98%;
• covid-19 second wave of infections and subsequent restrictions;
• the Mozambican prime rate seeing a rise on its 3-month average, from 15,77% to 16,27%.

According to CTA’s analysis, the combination of these macroeconomic factors, as well as the coronavirus’ second wave of infections, saw the private sector’s business revenues decline by over 26%, thus contributing to a drop in CTA’s Business Robustness Index, from 40% in the third trimester to 28% for the last trimester of 2020.

The security threats faced by the country in the gas-rich northern province of Cabo Delgado, have since then impacted business confidence for 2021, with foreign investment having been put on hold, CTA’s president claims, offering that over 40 contractors connected to Total’s Area 1 LNG project have been directly impacted by the suspension of operations, their losses amounting to US$148,11M, mainly due to infrastructure damages, suspended payments under the force majeure and perishable goods which had already been purchased by said contractors.

Source: Further Africa