Mozambique:350,000 tons of pigeon peas destined to India stranded in Nampula
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Business people in the central Mozambican province of Manica want banks to finance agriculture to “revive” the economy, which they describe as “choked” by inflation.
“The Government must create conditions for agriculture to be finance-able,” João Bettencourt, a businessman from Manica, told Lusa.
José Chibante, another entrepreneur in the sector agrees. “Agricultural production and trade, including grain imports and exports, are a potential and should have bank financing.”
Chibante points out that Mozambique cites agriculture as a basis for development, but prospects are undermined by lack of finance – a complaint that reflects a reality apparent from the statistics.
Data from Mozambique’s Institute for the Promotion of Small and Medium Enterprises (IPEME) indicate that 75 percent of Mozambique’s micro, small and medium-sized enterprises fail to get finance not simply because of high interest rates but because they are not eligible due to the lack of collateral (guarantees) and organised accounting.
The situation was discussed last week in Chimoio, capital of Manica, at a meeting between business people and financiers promoted by Millennium Bim, one of Mozambique’s main banks.
Millennium Bim’s Nuno Vaz described 2016 as a “perfect storm”, combining war, the “hidden debt” scandal and consequent economic downturn, inflation reaching 28 percent and Interest rates doubling to 16 percent.
“The military conflict and the reversal of investments made 2016 a difficult year, especially for the business sector in the centre of the country,” Vaz said, promising that Bim’s new initiative would present solutions for credit, payments, international trade, among other aspects of business.
“We have a country that produces but imports everything from South Africa,” Filipe Marques, representative of the European Investment Bank (EIB), said, again complaining that agriculture, the basis for the country’s development, was little explored.
The sector, however, like transport, was “a risky business, because it can not control variables”, such as the weather and exchange rates.
Banker Moisés Jorge acknowledged Manica province’s agro-industrial and tourism potential, and said that Millennium Bim has been working to offer the business, and social fabric in general, offers that would boost the economy.
In a context of “financial scarcity, the bank needs to look at viable projects”, he said. Experience in other countries showed that “agriculture is subsidised by the state”, but it was nevertheless “possible to put together a financing scheme” for the sector.
Millennium Bim has been operating in Manica for 20 years, and in 2016 set up a business network with seven branches.
At the event last week, six companies, whose financial management was characterised as minimal risk, won scheme awards.
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