Central Bank restrictions

Bank of Mozambique controls on foreign currency movements and the new limits on credit cards in force since the beginning of the year are stifling Mozambican travel agencies, says president of the Association of Travel Agents and Tour Operators of Mozambique (Avitum), Noor Momade.“Now we have a more serious problem, with some airlines starting to ban sales of airline tickets for lack of expatriation of funds,” she says, warning that, if nothing is done “we run the risk of travel agencies shutting down”.The restrictive monetary policy measures that the Central Bank has implemented to curb inflation in Mozambique are stifling various sectors of the national economy, with bank loans also more expensive due to the increase in interest rates.More active control of foreign currency movements is hindering the repatriation of capital by foreign companies that sell in meticais but wish to take payment in foreign countries.The latest complaints came from Mozambique travel agencies at a meeting held last Friday 24 June with Minister of Culture and Tourism, Silva Dunduro, where Avitum warned that international airlines selling airline tickets in Mozambique had started imposing restrictions last week because of the difficulty of repatriating payments received in meticais to their respective countries.“There are airlines flying to Mozambique, and there are others that do not fly here but whose tickets we can sell. For example Emirates, Air France, Singapore Airlines, American Airlines and others departing from Johannesburg. Since yesterday (Thursday, June 23), some of them said that Mozambican agencies cannot sell their tickets if the flights do not depart from Maputo,” Momade .

This decision will make tickets for domestic travellers more expensive, as the connection between the Mozambican capital and Johannesburg, a route monopolized by Mozambique Airlines and South African Airways, is very expensive.In addition to routes operated by airlines flying to Maputo, the sale of air tickets abroad represents a significant and lucrative portion of domestic travel agencies’ business.Travel agencies face other difficulties too. Since January of this year, the Bank of Mozambique has restricted annual credit and debit card limits to the equivalent of only 700,000 meticais, regardless of the number of cards held.“Many of us have to pay for our guests’ accommodation via transfers outside the country, and we use our credit cards. Usually the credit card company is in the name of one of the company managers, and this manager also has his or her personal card. All purchases accumulate and the limit is unique. If there are colleagues who have not yet exceeded the limit set by the Bank of Mozambique, it won’t take much longer. Then what will happen? Are we going to issue credit cards to all the workers (in the agency) to accumulate [each one’s] 700 thousand meticais? Is it legal to do that?” asked Neima Fakir, a representative of a Mozambican tourism agency present at the meeting.According to Fakir the “solution could be a bank transfer, but if a customer today wants to pay a hotel anywhere in the world and the bank does not transfer on the same day, the hotel will not accept the booking until they receive the money”.

“This is very bad for us because our sales will decline and we have workers doing nothing. We will not be able to pay wages, and we will either have to lay workers off or close the agency,” Fakir said.