Mozambican businesses on Friday called for new mechanisms to certify and pay for public works, amid delays in state payments that are hampering companies’ operations, with the Government currently owing businesses an estimated €1.17 billion.
“We recommend establishing more effective and predictable mechanisms for programming, certifying and paying for public works, as well as strengthening transparency in the management of the state’s obligations,” said the president of the Confederation of Economic Associations of Mozambique (CTA), Álvaro Massingue, during the fifth edition of meetings with the Government in Maputo.
The event brought together the Minister of Public Works, Housing and Water Resources, Fernando Rafael, and private-sector representatives to discuss challenges facing the construction sector, present solutions and identify investment and business opportunities.
Massingue warned that when payments are “excessively delayed”, contractors are forced to bear additional financial costs, jeopardising contract implementation and the very survival of companies.
According to the CTA president, the Government currently owes businesses 86 billion meticais (€1.17 billion), adding that talks are under way with the executive to define a strategy for prioritising payments.
“We are continuing to work on this. There are already proposals on how to resolve this issue, but it has not yet been resolved and, therefore, it continues to create serious constraints for companies. We call on the Government to speed up this process,” Massingue said.
In view of the situation, businesses also called for a review of customs and administrative procedures applied to strategic equipment and materials, as well as the creation of facilities for the temporary importation of specialised equipment used in major projects.
The private sector also proposed creating a public portfolio of priority projects for public-private partnerships, coupled with more predictable rules for concessions and new financing instruments for infrastructure.
“We need a public portfolio of priority projects for public-private partnerships, more predictable rules for concessions, balanced risk-sharing mechanisms and conditions that ensure the active participation of national companies,” Álvaro Massingue said.
For his part, the Minister of Public Works, Housing and Water Resources invited Mozambican businesses to work with the Government on programmes to expand water supply in rural areas and to take advantage of investment opportunities associated with the expansion of housing projects aimed at young people.
“We would also like businesses to pay greater attention to the water resources sector, as climate change is making water a social, economic and security challenge. We therefore need increasingly resilient infrastructure,” Fernando Rafael said.
The minister also challenged national businesses to identify projects, financing models and innovative solutions that could be developed in partnership with the Government, as well as to prepare for the new investment portfolio in water, sanitation, housing, schools, public buildings, dams, resilient infrastructure and urban planning, noting that these areas would require new business capabilities.
“We will work together to develop a stronger national construction industry, with higher quality, so that our infrastructure is resilient to climate change,” Rafael added, reiterating the Government’s commitment to reducing bureaucracy and increasing predictability in project implementation.
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