The Center for Democracy and Development (CDD), a Mozambican civil society organization, considers that the Bank of Mozambique “worsens the discredit” of the regulator, after an audit disagreed with the financial statements of the institution.
The auditing firm PWC refuted, in particular, the omission of the Bank of Mozambique, in the 2018 balance sheet, in relation to the consolidation of the pension fund accounts of the employees of the regulator Kuhanha, with the argument that “there is no relevant economic sense that justifies the consolidation.”
Find out more about the financial statement of the Bank of Mozambique and why the Center for Democracy and Development is questioning the transparency of the financial institution, with our companion app. Born2Invest brings you the latest economic news in the world for you to stay informed.
The financial statements of the Bank of Mozambique are under question
For the CDD, the justification of the Mozambican financial regulator and the other flaws found in the 2018 accounts show the “discredit” in which the institution finds itself.
“The non-consolidation of Kuhanha’s accounts in the 2018 financial statements by the Bank of Mozambique worsens a climate of suspicion and discredit in relation to the regulator that has existed since 2017,” stated the analysis of the DDC.
The organization recalled that also in 2017 the auditor expressed reservations about the quality of the accounts of the regulator.
The DDC requires the Bank of Mozambique to clarify the guarantees it has put in place to ensure that there is no conflict of interest in the treatment it gives Kuhanha, since this entity purchased Banco Moza in 2017.
“How to ensure transparency and impartiality in this process? How does the regulatory triangle [Bank of Mozambique], supervised [Kuhanha] and supervised [Moza Bank] function?”
Transparency is extremely important in financial markets
The DDC pointed out that the proper functioning and efficiency of financial markets also depend on the image of transparency and integrity that financial institutions, including the central bank, convey to the public and companies.
“In addition to being a bad example as a regulator and supervisor of the financial system, the lack of transparency in the actions of a central bank can damage its reputation and limit the efficiency of monetary, exchange rate and financial policy,” reads the analysis.
The continued inconsistencies in the financial statements of the Bank of Mozambique are worrying and may set a bad precedent for commercial banks and other financial institutions operating in the national financial system, warned the CDD.
According to the independent audit report, “the individual and consolidated financial statements do not present the financial position of the bank and its subsidiaries in a proper manner.”
In the document, WB management considers that “there is no relevant economic sense to justify the consolidation” of Kuhanha.
“Only the subsidiary Sociedade Interbancária de Moçambique (Simo) was considered in the consolidation perimeter, since its object of activity [the country’s ATM network] is framed within the functions of the central bank,” it stated.
In the report, Kuhanha is classified “as a public interest entity, within a sector of activity regulated by the Mozambique Insurance Supervisory Institute and, as such, subject to regular independent audits,” added the central bank.
DISCLAIMER: This article was written by a third party contributor and does not reflect the opinion of Born2Invest, its management, staff or its associates. Please review our disclaimer for more information.
This article may include forward-looking statements. These forward-looking statements generally are identified by the words “believe,” “project,” “estimate,” “become,” “plan,” “will,” and similar expressions. These forward-looking statements involve known and unknown risks as well as uncertainties, including those discussed in the following cautionary statements and elsewhere in this article and on this site. Although the Company may believe that its expectations are based on reasonable assumptions, the actual results that the Company may achieve may differ materially from any forward-looking statements, which reflect the opinions of the management of the Company only as of the date hereof. Additionally, please make sure to read these important disclosures.
First published in Africa 21 Digital, a third-party contributor translated and adapted the article from the original. In case of discrepancy, the original will prevail.
Although we made reasonable efforts to provide accurate translations, some parts may be incorrect. Born2Invest assumes no responsibility for errors, omissions or ambiguities in the translations provided on this website. Any person or entity relying on translated content does so at their own risk. Born2Invest is not responsible for losses caused by such reliance on the accuracy or reliability of translated information. If you wish to report an error or inaccuracy in the translation, we encourage you to contact us.
Which of these lesser-known EV stocks will be the next Tesla?
The competition on the EV market is getting tighter, as several lesser known manufacturers are raising the interest of investors....
Gigantic cannabis plantation officially opened in Northern Macedonia
In addition to the cannabis plantation, PHCANN - which is also listed on the New York Stock Exchange - has...
Is the Ethereum 2.0 deadline bullish for the ETH course?
With the launch of Ethereum 2.0, a new era could begin for the young Decentralized Finance (DeFi) industry. The change...
Exit for an SME financed with equity crowdfunding: Cesynt shares on Euronext
Founded in 2010, Cesynt had already conducted a first equity crowdfunding campaign on Opstart in June 2018, collecting $297,000 (€250,000),...
The business environment in Morocco: the EESC calls for more effort
In its annual report, published in the Official Gazette on November 17th, 2020, the Economic, Social and Environmental Council in...
Africa7 days ago
Syngenta Morocco and Agrin help small farmers to cope with the effects of the pandemic
Cannabis6 days ago
CBOS survey: over 60% of Poles are for cannabis legalization
Biotech6 days ago
Ability Pharma closes €2 million round to advance antitumor development
Featured6 days ago
Moneyfarm launches smart bank transfer to invest directly from the current accounts of multiple banks