Analysis of the Regulations and Procedures of the Bank of Mozambique
The Bank of Mozambique (BoM) has to date been successful at achieving the core elements of its mandate: Mozambique's economy is stable, inflation is low and under control and the metical exchange rate is stable in the face of both FDI and foreign aid inflows. The country is, however, set to experience an unprecedented inflow of foreign capital due to the impending LNG boom and continued developments in the mining sector. The BoM will have to remain vigilant in order to prevent a level of real effective exchange rate appreciation that impairs the country’s competitiveness in other sectors. At the same time, the BoM has to ensure that in its attempt to control the domestic currency it does not impose a level of regulation and bureaucratic burden that stifles business and generates reluctance on the part of foreign investors. Achieving this careful balance will be one of BoM’s key challenges moving forward.
At the moment, there is no clear way to assess how Mozambique ranks in terms of Central Bank/Regulatory related procedures. Unfortunately, the Ease of Doing Business report does not capture how regulations related to issues such as foreign exchange flows, provision of guarantees and approval of off-shore loans impact the business/investment climate. However, input from various stakeholders in the business, legal, banking and investment community indicates that certain BoM regulations and procedures present an obstacle to doing business (ranging from additional delays to outright rejection of requests based on misinterpretation of legislation) and a disincentive to investment.