Africa-Press – Mozambique. The Mozambican branch of the South African Standard Bank believes that the shortage of foreign currency (particularly of US dollars) may worsen in the short term as a result of fiscal pressure.
Last February, 63 companies submitted pending requests to the Confederation of Business Associations of Mozambique (CTA) for the payment of import invoices for raw materials and goods, some of which had been awaiting settlement for more than six months due to a shortage of foreign currency in the commercial banks.
According to Standard Bank chief economist, Fáusio Mussá, cited in the bank’s monthly Purchasing Managers Index (PMI) survey, despite expectations of progress in Liquefied Natural Gas (LNG) projects, which should bring medium-term gains “we now think that fiscal pressures associated with foreign exchange market liquidity may intensify in the short term.”
The survey – which is compiled from responses to questionnaires sent to purchasing directors from about 400 private sector companies – includes agriculture, mining, manufacturing, construction, wholesale trade, retail trade, and services.
Mussá explained that if the Mozal aluminium smelter, on the outskirts of Maputo, fails to secure an agreement with the government, regarding the favourable electricity tariff it is demanding, the country will face additional temporary pressures on economic growth, public finances and foreign exchange liquidity.
The document also revealed that the country’s economy shrank in the first three quarters of 2025. There was negative growth of minus 1.9 per cent, blamed on slow recovery from the post-election tensions and rioting.
“We expect GDP growth to turn positive in the last quarter of 2025, supported by developed base effects, but with a high risk of turning negative from the second quarter of 2026 onwards, if Mozal is shut down”, reads the note.
However, according to the document, the private business sector grew last November and the main Purchasing Managers Index rose from 50.4 in October to 50.8 in November.
“The indicators pointed to a slight improvement in the health of the Mozambican private sector for the second consecutive month. In November, companies received the highest volumes of new orders for the second consecutive month. Furthermore, the growth rate accelerated and was the sharpest recorded in almost a year and a half. In particular, the five subsectors monitored by the PMI survey saw an increase in new business,” the report reads.
The document also points out that another area that saw a boost in November was employment, with the latest data showing the strongest round of job creation since July of last year. However, business prospects deteriorated slightly in November, although companies, overall, remained positive about economic activity in the coming year.
