The International Monetary Fund (IMF) is warning the Mozambican government to use merit and professionalism to appoint board members of state-owned companies. In an assessment of the Mozambican State Business Sector, the financial institution warns that it is necessary to increase the transparency of public tenders launched by this sector.

According to a publication in the newspaper "The Country" The IMF stressed that it was paying close attention to the 21 public and state-owned companies in Mozambique, whose expenses, debts and financial obligations represent around 46% of the country's entire wealth by 2022.

According to the IMF, which is working with the Ministry of Economy and Finance (MEF) on the annual assessment of the financial health of the state business sector, "the process of appointing board members should be formalized and carried out on the basis of competitive merit and transparent principles, seeking professionalism and relevant skills".

"It is also important to ensure that members of the boards of SOEs do not take up other positions in regulatory or supervisory bodies, and to declare their shareholding, if any, in all SOEs," the IMF stresses.

In the IMF's view, although these companies are obliged to follow public procurement regulations, they are allowed to draw up internal procurement policies that have a number of corruption risks. "They are authorized to use exceptional processes in situations of force majeure, or when it is not possible to hold an open tender, without providing objective criteria, safeguards or special approvals (informing only the general meeting of shareholders)," the institution says, adding that companies should be obliged to publish their procurement policies.

In addition, the IMF warns the Mozambican government to rethink whether or not to maintain its ownership in companies in which the state is a minority shareholder, as the Institute for the Management of State Holdings (IGEPE) has little control over them and it is difficult to control their level of risk to public accounts.