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José Reino da Costa


José Reino da Costa

Vice-Chairman & CEO, Millennium BIM


José Reino da Costa has served as CEO of Millennium bim and vice president of Impar Insurance Company since 2015. With a Bachelors degree in mechanical engineering and a post graduate in industrial engineering and E- Business, as well as an MBA in management, José Reino da Costa has developed his carrer in top managerial positions in sectors such as Banking, Insurance, Retail and Consulting. His career has seen him working in different countries such as Portugal, Romania, Macau, Angola, and currently Mozambique.

“This crisis has shown us that people can be extremely productive working from home.“

How is COVID-19 affecting Mozambique’s economic recovery?

I foresee a multi-faceted negative impact of COVID-19 on Mozambique’s economy. The first concern is the global impact of the pandemic. As countries across the globe are implementing lockdown measures, forecasts point to a 3% shrinkage in the global economy, while the IMF predicts a 1.6% contraction in the economy of the Southern African region. The effects on Mozambique will be even stronger, given that the country went through a traumatic 2019 due to the cyclones; while early forecasts in 2020 predicted growth above 5%, now even 2% growth forecasts are judged as too optimistic. Mozambique has limited fiscal space and high public debt; the country has been urgently advised to undergo a process of fiscal consolidation and control of public expenditures; however, expenditures to limit the impact of COVID-19 will put more pressure on the public debt. Fortunately, the IMF has agreed to limit the damages by granting a USD300-million loan to stabilize Mozambique’s balance of payments for the moment. However, COVID-19 is slowing down FDI in the country, and without investment the country will not have the means to push through fiscal consolidation in the coming years. Mozambique was keenly awaiting USD30-billion gas investments from ExxonMobil in 1H2020; however, it now looks like it will be delayed for a year, due to the ongoing uncertainty in the market. Overall, it is clear that economic recovery will not be seen in 2020.

How is the banking sector assisting the country during this crisis?

The banking sector is fundamental for the development of the economy and should play a crucial role during moments of crisis. At the offset of the outbreak, the central bank took a set of initiatives to assist the economy, and the whole banking sector was keen to abide. This included lowering interest rates by 150 base points and injecting additional liquidity in the market, in both local and foreign currency. Financial institutions have come together to deploy a series of measures to minimize the impact in the medium and long term, such as the delay in terms of payments for interests and, in some cases, capital. These measures will have a significant impact in relieving the debts of companies and individual borrowers, as well as benefitting new credit. However, these should not be long-term solutions, as lowering interest rates risks increasing inflation rates and prompting currency devaluation—a situation Mozambique witnessed all too recently and does not wish to relive. Besides acting on monetary policies, banks have taken actions to benefit customers, such as lowering banking service fees and encouraging the use of digital platforms—a crucial measure in the context of social distancing.

What measures has Millennium BIM put in place to face the challenges brought by COVID-19?

Our first concern is to protect our employees and our clients, ensuring the use of masks, disinfectants, and social distancing measures. We have split our employees into shifts, allowing a third of our employees to work from home. Our second concern is business continuity—the bank must continue to operate, and its services need to remain available to the public. We have implemented all the necessary safety measures while ensuring the necessary services we provide are not disrupted. In terms of corporate social responsibility (CSR), a priority for Millennium BIM has been to assist the country concretely in the fight against COVID-19. We cancelled the celebrations for our 25th anniversary in October and have allocated MZN15 million to Maputo Central Hospital, the largest public hospital in the country, which finds itself at the forefront of the fight. The hospital lacks rooms and equipment, so through this contribution we want to enable the hospital to have a more positive response to attend affected patients.

Given the current challenges, what changes do you envisage in your 2020 strategy?

COVID-19 has undoubtedly influenced our strategy, but in a way, we have been able to transform the challenge into an opportunity. The first aspect is digital transformation. This period of confinement has shown us that we must emphasize the digital connection with our clients. We already have a successful digital platform called IZI, though we are determined to improve our efforts in mobile technology and move to online customer care. This crisis has shown us that people can be extremely productive working from home, and with well-defined KPIs and indicators, we can make evaluations based on outputs. This will have a huge impact on the way we do business. On a more negative note, a central pillar of our 2020 strategy was to assist the gas mega-project ecosystem and the development of local content. Delays in the gas projects will thus represent a setback in our strategy. However, due to the financial crisis in Mozambique over the past few years, Millennium BIM has developed an extraordinary level of liquidity reinforcing its capital (at an astounding 45%). The strong liquidity and robustness of our balance gives us confidence that we will overcome this pandemic, while always ensuring we protect our workers and clients.



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