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One of the major reasons given by Mozambican manufacturing companies for not exporting the goods they produce is the high cost of the export licences demanded by the Mozambican authorities, according to a report launched in Maputo on Monday.
The report, launched at the “Public forum on Business Development”, documents the main conclusions reached by a Survey on Manufacturing Industries held in 2017, and details the challenges faced by such companies.
This was the second such survey, and covered companies in urban areas of seven provinces. Perhaps the most shocking finding was that over a quarter of the companies covered in the first survey, in 2012, had ceased to exist by 2017.
831 companies were covered in 2012. Of these, 216 have closed down, and 92 refused to participate in the 2017 research. That left 523 companies still in operation, and of these only nine reported exporting anything.
Acording to the report, “the great majority of the companies say that the main reason for not exporting is the high cost of export licences”.
Finn Tarp, the director of the United Nations University World Institute for Development Economics Research (UNU – WIDER) and a co-author of the study, pointed out that “international experience shows there are advantages in exporting. The growth and efficiency of companies increase, when they manage to export. The growth of manufacturing industry depends on access to foreign markets”.
Tarp said that the small number of manufacturing companies who export any of their goods reflects the reality of the manufacturing sector in Mozambique. “This is an illustration that Mozambique is still very far from take-off”, he said. “To achieve this, it is absolutely necessary to think about how to obtain efficiency, and attract competitiveness for exporting. That requires a favourable investment climate, and we don’t see any great effort for this”.
Tarp called for an investment policy and climate geared towards increasing export capacity.
The report shows that Mozambican companies face difficulties in their supply chains, in terms of quantity, quality and regularity of supplies. Access to bank credit is strongly limited, due to the high interest rates charged, and the large amount of collateral demanded by the banks.
The legal and regulatory environment is regarded as such an obstacle that almost half the business people and managers interviewed said they feared the authorities would close their companies down.
Despite the regular claims by the government that it is reducing red tape, business people still run into difficulties when they try to formalise their companies. The report says they mention “lack of transparency and the occasional act of corruption at the moment of registration”. They also complained of arbitrary behaviour by the government officials who inspect workplaces.
The report claims that lack of transparency and corruption keeps many companies in the informal sector rather than going through the difficulties associated with formal registration.
The report was produced with the support of the Finnish and Danish government. At the opening session of the Forum, the Finnish ambassador, Laura Torvinen, said supporting this project will contribute to the public debate on development policies, since “a dynamic private sector is fundamental for economic growth and prosperity in all countries”.
She claimed that dynamic private business “is a key to job creation, trade and innovation, which are of critical importance for poverty reduction and inclusive socio-economic development”.
The director of the Economics Faculty at Maputo’s Eduardo Mondlane University (UEM), Fernando Licucha, said that the UEM is participating in this project because its institutional mission is “to produce and spread scientific knowledge, through research, as a basis for teaching, learning and extension, educating future generations with humanist values”.
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