Mozambique will merge two state-owned telecommunications companies in a restructuring aimed at returning the loss-making firms to profitability, a senior government official said on Tuesday.
The government will merge Mozambique Telecommunications (TDM) and Mozambique Cellular (Mcel), Council of Ministers spokesman Mouzinho Saide said, in line with government plans to cut spending as it struggles with a debt crisis that is crippling the economy.
The announcement comes after parliament approved an amended 2016 budget, as the southern African country imposes austerity measures to cope with tough economic conditions.
Mozambique, one of the world’s poorest countries but with huge untapped gas reserves, has been thrown into economic turmoil by revelations of financial mismanagement.
The government’s admission in April it had more than $1 billion of undisclosed debt has hit cash inflows, with the World Bank delaying approval of development loans while the U.S. government is reviewing the $400 million it provides annually to the cash-strapped country.
Finance Minister Adriano Maleiane said this month economic growth was seen slowing to 4.5 percent from the initial forecasts of 7 percent. Source: Reuters