Maputo, 24 Jul (AIM) – The International Monetary Fund (IMF) has called on the Mozambican government to strengthen transparency measures in the management of publicly-owned companies, which it regards as presenting high risks of corruption.
According to an IMF evaluation report SEE, cited by the Portuguese news Agency Lusa, around 20 companies, either wholly owned by the state or in which it has a stake, represent a “risk” to public finances, with weak accounts in recent years.
“It is also important to improve transparency in the procurement of public companies in order to address vulnerabilities to corruption and improve the efficiency of public spending”, says the report. “Given the size of the sector, the government and citizens should pay attention to procurement”
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The document pointed out that Mozambique’s legal framework grants public companies broad discretionary power to carry out direct purchases, in non-competitive situations, avoiding public tenders and increasing the risks of corruption.
“Although public companies are forced to follow principles that support transparency and open competition, they are authorized to use exceptional processes in situations of force majeure, or when it is not possible to hold a public tender, without providing objective criteria, safeguards, or special approvals”, the IMF said.
The IMF also states that it is working with the Mozambican Ministry of Economy and Finance and “as a first step towards greater transparency, there is a need to unveil public companies’ procurement policies, along with annual procurement plans or the implementation of transparency of beneficiary ownership and anti-corruption policies.”
This means that, in the future, the authorities should consider revising the legal framework for subjecting public companies to public procurement rules, especially with regard to transparency requirements.
“Although recent reforms of the legal framework for public companies and ongoing efforts by the Mozambican authorities have improved supervision and financial reporting, there is need to pay more attention to corporate governance frameworks to improve performance in the sector”, reads the document.
“An important area for action in Mozambique is strengthening the role, independence and autonomy of the boards of directors of public companies”, it adds.
The government, according to the IMF, must empower the boards of directors to define their own strategy according to clear objectives and clarify the role of the state (as owner).
“The state should also seek to separate its ownership, and its regulatory and policy-making functions, where a comprehensive ownership policy, including strong transparency requirements for both public companies and the state as owner, can guide this endeavor”, insisted the IMF. The State “must ensure that board members of public companies do not assume other functions in regulatory or supervisory bodies and declare their shares in all public companies, if they possess them”.
(AIM)
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