Mozambican families complain about the impact of rising prices of fuel and basic products. Businessmen ask banks to quickly review the "interest-free banking" legislation to stimulate the economy.

"This is increasing more and more the poverty of Mozambicans. It's a way to send the citizens of Mozambique away," one Maputo resident complains into the microphone of DW Africa. He is just one of many Mozambicans who say they are feeling increasingly squeezed in their families' daily bills due to the latest increases in fuel prices that are dragging along with them other basic products.

The crisis, says another resident of the capital, "will be difficult. "Because of the way I work, because I live by doing odd jobs and keep whatever money is available," she explains.

"It will be more complicated for children, family back home. The amount that I had to buy bread, I have to spend on fuel, because I have to use transportation. I can't leave without transportation," laments another Maputo resident.

The effects of the crisis resulting from rising fuel prices, food prices, and restrictive financial conditions are also already being felt by business owners. Last Thursday, the president of CTA, the Confederation of Economic Associations, Agostinho Vuma, said that these three shocks make their businesses unsustainable.

Unsustainable interest rates

The official called on the banking industry to speed up legislation to stimulate the economy and "open doors for access to concessional financing for businesses and boost the practice of interest-free banking in the market."

If, on the one hand, the cost of living is rising, says Vuma, on the other hand, to try to curb inflation, the Bank of Mozambique is putting pressure on the business community by trying to curb inflation: "To control inflation is to increase the interest rate. To increase the interest rate is to say that today the interest rate in Mozambique is about 20%. 20%? There is no economic activity capable of supporting the cost of financing at that margin," he stresses.

New increases in bread and transportation?

About two months ago, even before the increase in fuel prices on Tuesday, the price of bread had already increased. And the sector warns of another rise due to the shortage of wheat, according to the president of the Association of Bakers of Mozambique (AMOPÃO), Vítor Miguel.

"Obviously, each one has been seeing what their situation is at the moment and understands that they have to make the readjustment to be able to hold on, or else they will close and we won't have bread in the market," he warns.

The rise in transport prices, which is another issue for Mozambicans, will still depend on a meeting between the sector and the Government, according to the vice president of the Road Transport Federation, Sancho Simão. "The normal thing would be that when the fuel goes up, we would meet the rise in the operating costs to have some profit. But at this moment it doesn't exist," he laments.

The agricultural production sector says it can produce wheat and other food locally to stem the food crisis, but the president of the Federation of National Agricultural Associations, Hermane Mussanhane, says that this will not depend on the producers.

"Alternatives we have, but in agriculture the solutions are not immediate," he reminds. "The issue of credit is not for us. 2% of all the credit approved at the country level is for agriculture. How are we going to say that agriculture is a priority?" questions Mussanhane.