Government and World Bank financing irrigation with US$57 million - Mozambique
[Photo: Adérito Caldeira / A Verdade]
Mozambique Minister of Industry and Commerce Ragendra de Sousa has revealed that the government has secured promises of funding for another rice production project, this time in Mopeia.
“Bringing in rice from Thailand, with the transportation costs… It is our production that must be more efficient, and should in no way be more expensive than production from abroad,” Minister Ragendra de Sousa says.
Mozambique consumes approximately 600,000 tons of rice annually. Several state, private and public-private projects have been implemented with the aim of reducing rice imports, currently standing at around 300,000 tons, to the cost to the state coffers in 2018 of US$221 million, 20 percent up on the figure for 2017.
Taking stock of Mozambique’s participation in the 2nd Africa Investment Forum organised by the African Development Bank in neighbouring South Africa, Minister Ragendra told reporters on Friday (November 15) that he had received commitments from investors interested in investing about US$45 million in a mass rice production project in Mopeia District, Zambezia province.
Asked why rice and other domestic agricultural products end up more expensive than imported ones, the Minister of Industry and Commerce said: “Importing or not depends on trade policies. Don’t ever forget that transport is part of the cost structure of any product. Bringing in rice from Thailand, with the transportation costs… It is our production that must be more efficient, and should in no way be more expensive than production from abroad.”
Ragendra de Sousa said that one has to look at “the cost structure, the profit margin, the return on capital… These are all variables that are perfectly malleable to make production competitive. We have fertile land, we have available water, the machines cost the same in Mozambique or in Zimbabwe, so the cost of fixed capital is the same.”
“We continue to promote rice because we are sure that, being an efficient producer, [domestic production] has to be cheaper [than imported rice] because the Thai or the Pakistani use the same factors of production: capital, labour and land,” the minister said, explaining: “The theory according to which production in Mozambique is more expensive… Only when I am distracted do I accept it.”
By Adérito CaldeiraSource: A Verdade