Chapo challenges banks to reschedule debts

Maputo, 21 Feb (AIM) – Mozambican President Daniel Chapo has challenged the country’s banks to reschedule the debts of Small and Medium-sized Enterprises (SMEs) affected by the post-election crisis, characterized by rioting, looting of stores and destruction of public and private infrastructures.

According to Chapo, who was speaking on Thursday, in Maputo, after meeting with the Association of Commercial Banks, “For us it is very important to reschedule the debts. Extending the deadlines is very important for our economy because it will allow us to secure jobs. It also has an impact not only on the economy, but also on society”.

According to Chapo, there is also a need to open subsidized credit lines for companies for companies that are not indebted, but are in need of capital to boost their businesses, with estimated annual interest rates of around 15 per cent.

He guaranteed that his government is going to sit down with the country’s development partners to find criteria for making these financial resources available and using them.

He also said that the government intends to use the loan guarantee funds to boost the economy.

Chapo expressed his satisfaction at the commitment of the Association of Commercial Banks to bring in specific measures.

“I’m very pleased”, he said. “I’d rather have two or three strong measures that will recover our economy, especially the financial health of our entrepreneurs, than have 10, 15 or 20 measures that don’t work”.

Chapo also met with a delegation from the International Monetary Fund (IMF) which pledged to continue supporting Mozambique’s macroeconomic stability through the Extended Credit Facility (ECF).

According to Pablo Lopez, the head of the IMF delegation, who was speaking to reporters on Thursday, in Maputo, after an audience granted by Chapo, the IMF will continue to support Mozambique’s development through its various programmes, especially the ECF. This is an IMF programme that provides medium-term financial assistance to low-income countries with protracted balance of payments challenges.

The objectives of the ECF are to boost economic growth, reduce poverty, strengthen public finances, lower debt levels, modernise monetary policy, enhance growth potential, and build resilience to climate change.

“We came to Mozambique as part of the ECF programme that the IMF has with Mozambique. There is a new government in place, so we came here to learn about the government’s priorities and to make our contribution to supporting macroeconomic stability”, Lopez said.

He said that the IMF is aware of Mozambique’s great potential, and therefore it is open to working closely with the government to tackle existing challenges.

“The government’s priority is to generate growth and create jobs, as the most effective way of eliminating poverty, and this is a very ambitious agenda. We want to see how we can contribute to supporting the government in this important challenge”, he said.
(AIM)
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