Mozambique: Politicians open twice as many companies as others – researcher

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Mozambique: Politicians open twice as many companies as others – researcher

6:24 CAT | 23 Jun 2022

File photo: Lusa

Researcher Sam Jones said on Thursday that the creation of companies owned by politicians in Mozambique had risen twice as much as the number of companies created by people without political positions, warning that this can create conflicts of interest.

“When someone is in power, we see that the number of companies they open grows 30% more than other people who do not have political power, that is, they become more central to the business network, and the number increases by 50 to 100% more than in the case of people without political power,” the researcher told Lusa on the sidelines of the NOVAFRICA 2022 Conference on Economic Development, which runs until today in Carcavelos, on the outskirts of Lisbon.

Speaking following the presentation of a study on “Doing Business while holding public office: Evidence from Mozambique’s firm registry,” the researcher from the World Institute for Economic Development of the United Nations University (UNU-WIDER) in Mozambique explained that the link between the business and political world is not necessarily bad, but warned of the strong possibility of conflicts of interest.

“In Mozambique, when someone is in power, there is a moment when they open more companies, they become more important within the business world, this indicates that there is a very close relationship between the business world and the world of politics, which is not necessarily bad, but one should be aware that it can create major conflicts of interest in terms of political decisions,” the British researcher told Lusa.

Aske about concrete cases, namely those linked to the scandal of the hidden debts, Sam Jones answered: “We all know that there are some conflicts of interest, but we cannot assess this within the database. It is a quantitative study on who is in power and the growth of that person’s business and his family”.

Laws to prevent business interests from overriding the public cause exist in Mozambique, but the main problem is the implementation of the legislation rather than the lack of regulation, he said.

“Mozambique has some legislation, but the problem is its implementation, transparency is critical, the registration of assets of politicians and ideally that they are transparent as well,” said Jones, noting that the areas where there is greater creation of companies by active politicians are in the provision of services to other companies, construction and finance and investment companies.

The link between the business world and the world of public administration “is not necessarily bad. The relationship is normal in many countries, but the possibility of conflicts of interest increases much more. The difficulty is having a business world that can contest and discuss public policies, rather than accept them, which is important in Mozambique,” he warned.

The study by the British academic covers the period from independence from Portugal, in 1975, to 2019 but focuses mainly on the 1990s, with increased business activity.

Source: Lusa