The Confederation of Economic Associations of Mozambique (CTA) said that the macroeconomic environment throughout 2022 showed a trend of stagnation.

"This trend was determined by the rise in interest rates, which brought the financial system's prime rate to 22.6% this December. In other words, in 2022 it will become more expensive for SMEs to honor their financial obligations to the banks, as well as to take out new loans," said Agostinho Vuma, president of the CTA during a speech at the year-end briefing, held yesterday in Maputo.

The head of the CTA said that the inclusion on the FATF's gray list also marked one of the critical concerns of businesspeople, at a time when kidnappings continued to condition the business environment.

"Our estimates suggest that this industry will represent around 2.2 billion meticais by 2022. This is an amount that can sequentially generate the need for money laundering. Combating kidnapping must be part of the anti-money laundering and anti-terrorist financing matrix, as well as improving the business environment," he said.

As for business performance in 2022, the CTA says it was affected by various factors, including the outbreak of war between Russia and Ukraine and the continuing insecurity in Cabo Delgado. However, "the continued removal of the economic restrictions associated with Covid-19 and the recovery of the partners ended up meaning an oxygen balloon for business activity".

With regard to the Business Robustness Index, the business community says that it tended to be volatile throughout the year, a scenario that, according to the CTA, is associated with the fact that Mozambique has become a producer and exporter of liquefied natural gas from the Rovuma basin.

"An overall assessment of the Index suggests that it has improved, by the third quarter of 2022, by around 3 percentage points compared to the same period in 2021, standing at 29%. Sofala and Maputo are the provinces with the best performance.

In terms of public-private dialogue, entrepreneurs highlight the government's announcement of the Economic Acceleration Program. According to businesspeople, it is inspired by the options presented by the private sector during the 17th Annual Private Sector Conference.

"Following this announcement, the CTA began analyzing the reform proposals that are part of the announced package, and so far the tax reforms are prominent, especially the revision of VAT, the Customs Tariff and the ICE, as well as the revision of the investment law."

Outlook to 2023

For 2023, the CTA states that "we have high expectations regarding the effective implementation of the measures under the SAP, with emphasis on reducing the tax burden as a mechanism to boost business recovery".

The payment of debts is another problem that business owners want to see resolved by 2023. "As a CTA, we would like to see the problems related to paying late invoices to suppliers and VAT refunds minimized."

According to the CTA, SMEs are "suffering because of the lack of VAT refunds and payment of invoices".

The CTA also says that "the proposal for the Social Economic Plan and the State Budget for 2023 make no mention of this aspect at any time. "I would like to hear what the government expects to do about these two aspects," I concluded.