Business activity experienced a timid recovery in the second quarter of this year as a result of relief from the Covid-19 spread containment measures, along with the start of agricultural marketing and the beginning of exports of agricultural commodities and fish products.

As a corollary, the Business Strength Index improved from 28 to 29%, influenced by the revival of economic activity in the agriculture, hotels and restaurants, trade and services, and transport sectors, which also benefited from the relief of the Covid-19 containment measures enacted from April to June.

Data presented yesterday by the Confederation of Mozambican Economic Associations (CTA) indicate that, during the period in question, the macroeconomic environment also improved slightly, increasing by four percentage points, from 46.0 to 50%.

CTA president Agostinho Vuma pointed out that the business environment in the second quarter was marked by some regulatory changes with a positive impact on business activity, namely the relief of restrictive measures to combat the Covid-19 pandemic; revocation of the on-board assistance and inspection fees at border crossings; and the launch of the Central Registration Office for Securities Guarantees.

However, the entry into force of the new Regulation on Administrative Court Fees, which increases the amount of costs by about 170%, has exacerbated the transactional costs for companies still struggling with the harmful effects of the Covid-19 pandemic.

Referring to the outlook, businessmen, in general, expect business performance to recede due to the resumption of restrictive measures recently announced by the Government in view of the emergence of the new wave of spread of the viral pandemic, the Delta variant. They argue that these measures will once again limit the operation of the business machine at a time of lack of stimulus measures and support for the business sector.

"Our great fear is that, in the absence of stimulus to the business sector, these restrictive measures may result in a worse situation than that seen in the first half of the year, when some 802 jobs were lost in 90 companies," the business sector points out.

Additionally, according to CTA, the recent approval of the Regulation on the Sealing of Alcoholic Beverages and Manufactured Tobacco, which does not incorporate the concerns raised by the business sector regarding this procedure, will certainly contribute negatively to business performance in the coming quarter.

Meanwhile, the latest developments in the north, shared recently by the President of the Republic, open a new window of hope for the re-establishment of security and stability in the localities affected by terrorism in Cabo Delgado province, which will enable the resumption of oil and gas projects, with the positive impact this may have on the economy.