Mozambique: Business owners ask that Local Content policy includes public procurement

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Mozambique: Business owners ask that Local Content policy includes public procurement

9:35 CAT | 25 Jul 2025

Photo: CTA

Mozambican business owners today called on the government to expand the local content policy to public procurement, especially for Small and Medium-Sized Enterprises (SMEs), criticizing its limitation to the oil and gas sector.

“It is essential to expand its scope to public procurement in order to prioritize goods and services that incorporate domestic raw materials, local labour, and Mozambican or Mozambican-invested capital,” urged the president of the Confederation of Economic Associations of Mozambique (CTA) at the opening of the 11th Business Environment Monitoring Council in Maputo.

Álvaro Massingue stated that the expansion of the Local Content policy will “boost domestic production and ensure a greater circulation of wealth within the country,” thus calling for a review of the Public Procurement Regulation, a provision that, for the private sector, fails to ensure “the effective inclusion of national companies, especially SMEs, in large public contracts.”

“The CTA proposes an urgent review of this legal framework, with the introduction of mandatory clauses that guarantee the participation of Mozambican companies,” Massingue argued.

The CTA also requested a minimum period of 60 days for public consultation on any proposed economic legislation, especially those with a fiscal impact, stating that the “rushed approval” of laws results in “gaps and imperfections” which generate negative impacts on the economy.

In the same intervention, the CTA suggested reforms focused on fiscal stability and predictability, including the suspension of the introduction of new taxes and the definition of a maximum limit for all taxes and fees applicable to economic operators.

According to business leaders, it is necessary to undertake a comprehensive review of all tax regimes with a view to promoting business formalization, reducing the tax burden, and thus increasing tax revenue.

Business leaders also asked the government to suspend the introduction of the new Specific Consumption Tax (ICE) until companies recover from the post-election crisis, pointing to the destruction of industries during the protests.

READ: Mozambique: Businesses call for exchange rate stability amid forex shortage concerns

In the same speech, the private sector again complained about the costs of importing equipment, inputs, and raw materials, advocating for an effective reduction in customs duties on capital goods and technology.

“Even in cases where the customs tariff provides for exemption from customs duties, additional charges are applied that ultimately nullify the intended benefits, compromising public policy objectives,” said Massingue, citing the healthcare sector as an example. Despite exemptions on the import of certain components, there has been a progressive increase in fees and charges, with “excessive” costs for registering and retaining medicines and other medical equipment, he maintained.

Massingue also called for easier issuance of business and specialized technical visas.

“The slowness, arbitrariness, and opacity in the entry visa granting processes for investors, entrepreneurs, and specialized technicians continues to be a barrier to foreign direct investment. We propose the creation of a special, expeditious, and predictable regime for business and specialized work visas,” Massingue said.

He also called for a focus on funding for SMEs.

“The CTA proposes concrete and urgent measures, including the creation of guarantee funds and concessional credit lines, the effective development of a Development Bank, the strengthening of training, verification, and technical assistance programs, the promotion of production chains with large companies, and the creation of a National Observatory for SMEs,” the CTA president said.

The proposed Local Content Law – requiring oil and gas companies in the country to purchase locally produced goods and services and hire local labour – is currently in public consultation.

Source: Lusa