“The State should not be your only client” – Nyusi to Maputo business people

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“The State should not be your only client” – Nyusi to Maputo business people

7:45 CAT | 21 Apr 2017

Noticias (File photo) / Filipe Nyusi

Mozambican President Filipe Nyusi on Thursday night told the national business class to stop regarding the State as their only client and source of survival.

Speaking in the district of Marracuene, in a meeting with business people from Maputo province, Nyusi warned that anyone regarding the state as the sole client is in for a rude awakening, since that market is shrinking, given the government’s policy of cutting expenditure on goods and services.

“You shouldn’t look on the state as your only client, because that will have a negative impact on business life”, he warned. “Now that the State is slimming down, the room for contracting goods and services is also getting smaller”.

He was reacting to calls from some of the businesses for government protection. They wanted the government to give priority to Mozambican companies in the supply of goods and services for the state. “We feel it is necessary to give privileges or make room for the small national companies so that they can grow”, said the chairperson of the Maputo Provincial Business Council, Candido Bila.

“What happens now in tenders is that they are swallowed up by foreign companies with much greater capital”, he complained.

Nyusi reacted by telling his audience to stop thinking of themselves as companies of just one province. “Internationalise yourselves”, he urged. “Don’t just be companies of Maputo province. Be companies of all of Mozambique, and also of the southern African region, where you can find clients. We shouldn’t just have a single client. Let’s stop being dependent on just one client. Make an effort to have the muscle and the capacity for this”.

Companies could start small scale, subcontracted to undertake parts of some jobs, and then gradually create the capacity to work on larger projects, rising to the demands of the market.

Responding to demands to prioritise national production, Nyusi said the country would certainly gain if all consumer goods were produced inside Mozambique. But before Mozambique could dispense with certain imports, local companies must be certain that they can meet the full demand.

He cited the poultry industry as an example. Up until 2018, he said, Mozambican producers will not be able to supply the full market demand for chickens.

The government was protecting the Mozambican sugar industry (through a surtax on imported sugar), he said, because the local industry did have the capacity to meet domestic demand. However, the challenge of refining sugar inside the country remains. Nyusi said that soft drinks companies such as Coca-Cola would stop importing refined sugar, if the Mozambican sugar companies were to refine sugar to the specifications they require.

Bila also complained about the lack of water for irrigation, Nyusi replied that the government wants to provide water for all key sectors of the economy, but human consumption takes priority.

Lack of rainfall in the Umbeluzi river basin, the source of drinking water for Maputo and Matola cities and Boane district, has forced the Maputo Regional Water Company (AdeM) to restrict water supplies, pumping water to each urban neighbourhood only every other day. As part of the restrictions, the government banned the use of water for irrigation in the Umbeluzi Valley, severely affecting commercial agriculture, including major producers of bananas, such as the company Bananalandia.

Nyusi said that, if the scarce water supplies were not handled carefully, that could have serious impacts on human lives.

Source: AIM