MAPUTO– About 40 percent of construction companies in Mozambique are in a state of bankruptcy due to the financial crisis that the country faces since the interruption of foreign aid to support the state budget, according to Mozambican Confederation of Economic Associations (CTA).
President of civil construction sector of CTA, Nelson Muianga, said at a seminar in Maputo on Wednesday that the budget cut has severely affected the operation of the construction companies depending on government contracts to build schools, village roads and other infrastructures.
“The activity of the industry has greatly reduced, the growth indicators of companies have also reduced, we are continuing to have the massive dismissal of workers,” said Muianga.
Muianga said that the construction industry has declined by 4.6 percent in 2017, which shows that civil construction activity did not grow and capital costs, particularly loans, rose with the depreciation of the currency.
“In the construction industry about 40 percent of the companies are in a phase of total decline, and the trend is total bankruptcy. I think this has to be reversed with concrete programs,” said Muianga, adding that “a substantial number of construction companies have already shut down because of the crises situation.”
Source: NAM NEWS NETWORK