Ninety percent of construction companies in Mozambique are failing

18 December 2018

The vast majority of Mozambican construction companies will suffer losses in the 2018 tax year, said the president of the Mozambican Federation of Contractors (FME).

Manuel Pereira, speaking exclusively to daily newspaper O País, said 700 companies were in a bankruptcy process, which may close as early as 2019 due to the economic and financial crisis in Mozambique.

The chairman of the FME drew attention to the fact that the 700 bankrupt companies he mentioned accounted for about 90% of the civil construction companies registered in Mozambique.

“It’s salaries in arrears, unpaid taxes, government debt arrears and a series of debts will lead to bankruptcy of the national construction companies, as well as the lack of works awarded,” said the president of the FME.

Government debt to contractors has been taken on over the last decade, as a result of works executed for the State in the period between 2009 and the first half of 2018.

At the moment, the construction company’s concern is that a considerable part of this debt has not yet received the approval of the Administrative Court, “which means that the State has not assumed this debt.”

Referring to competition from companies in China in public works, Pereira told the newspaper he called for the creation of a legal provision obliging these construction companies to establish partnerships with their c

“The knowledge of civil engineering held by Chinese companies is not passed on to Mozambicans due to lack of sharing in the works, so the government should approve legal mechanisms in this regard,” said the president of the FME. (macauhub)