President Daniel Chapo has called for the creation of financing lines for domestic construction companies and the establishment of a schedule to regularise state payments to contractors, aiming to strengthen the sector’s capacity and support economic recovery.

Speaking on Wednesday, 21 October, at a meeting with the Mozambican Contractors Federation (FME) in Maputo, the head of state stressed the importance of the construction industry to national development and demanded measures to allow domestic firms to resume and expand their operations.

“There must be very clear financing lines to nurture the national construction industry,” Chapo said, adding that the goal is to create conditions for Mozambican contractors to compete in international markets as well.

Quoted by Lusa, the President noted that the sector comprises around 1,200 contractors, and called for stronger financing and business support mechanisms to increase the capacity of domestic companies.

Chapo also acknowledged that delays in state payments are affecting the execution of works and the financial position of construction firms. He proposed the development of a payment schedule that would provide greater predictability in settling outstanding debts to contractors.

According to the President, the abandonment or suspension of certain projects is not solely the result of company failings, and may also be linked to delays in disbursements by the state.

In March this year, the Mozambican Contractors Federation estimated that state debts to companies in the sector — relating to road construction works — amounted to nearly 220 million euros.

At the time, FME president Bento Machaila warned that payment delays were undermining the financial capacity of member firms, including their ability to meet payroll obligations, forcing some to take out bank loans to honour their commitments.