A positive message from Mozambique

Mozambique

Leonor Assunção, founder partner and administrator at InSite, talks to The Energy Year about prospects for SMEs given the dual shock of the oil price drop and the Covid-19 pandemic and how the company aims to emerge stronger from the crisis. InSite provides consulting, training and auditing in management systems. Its energy-related clients include Rosond, Montepuez Ruby Mining, HCB, BP and Petromoc.

What prospects do you see for SMEs given the dual shock of the oil price crisis and the Covid-19 pandemic?
I think it all depends on the length of this situation. Fortunately, up until now we haven’t had many clients cancelling contracts. Moreover, we were awarded a couple of new contracts as some of them see this crisis as an opportunity to reorganise or implement standards.
This cannot go on forever of course: After one or two months, they will face some financial difficulties. It really comes down to the length of this crisis. If it ends in a couple of months, we will recover with little damage. If not, companies will struggle a lot to stay alive.

Will Total’s Mozambique LNG project alone be enough for the SME sector to survive?
Of course, companies were hoping for a number of opportunities to come from this project. But they were also counting on other projects running and we feel that this was a strong motive for SMEs’ development. So Total’s project alone won’t be enough to feed the SME sector. But the fact that they are continuing is a positive message for the market, and we aren’t losing hope. On the other hand, companies are seeing this period as an opportunity to prepare themselves. I don’t think Total will present too many opportunities in the next two months.

Are there any incentives from the government for the SME sector to weather the storm?
We must remember that before Covid-19, the government was already struggling to strengthen its financial conditions and to promote economic development and growth. In the current scenario, the government has to face new challenges with reduced income, so its action is limited.
However, we know that the government is dealing with the commercial banks in order to give some help to the SMEs and that there are already some measures in place to facilitate credit, for example, and to reduce costs related to banking operations.
CTA, the Confederation of Economic Associations of Mozambique, also shares the view that it is essential that the government and the banks offer help to the SME sector and is asking for the implementation of specific measures referring to, for example, taxes payment, that could relieve pressure on SMEs’ finances during this period

In which particular areas can your company emerge stronger after the crisis?
We are continuing to provide services online, so this might be an opportunity to go more digital. Being more digital may make us more competitive – even to go beyond borders. Who knows?

What is your message to investors with doubts about Mozambique’s ability to withstand the crisis?
Investors should not lose hope in the country and the people as we are very resilient. Mozambique’s people are facing the crisis with serenity and implementing the required measures. They deserve confidence and to be respected. Of course, nothing is going to be as it was before, not just in Mozambique, but all over the world. This will also bring new opportunities. Mozambique is still a good country to do business in, and it will continue to be so.

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