“The war must be stopped so that there is investment” – Mozambique Business Association

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“The war must be stopped so that there is investment” – Mozambique Business Association

3:03 CAT | 01 Nov 2016

Lusa (File photo) / Rogério Manuel

The president of the Confederation of Economic Associations of Mozambique (CTA), Rogerio Manuel, said yesterday that the political and military crisis was the main cause of the business environment in Mozambique deteriorating, and called for a rapid end to the fighting.

“The political and military crisis is the main cause of the poor business environment. We need to end the war quickly so that there is investment and so that investors have confidence,” Manuel told Lusa on the sidelines of a Mozambique-Norwegian business forum in Maputo.

Manuel was reacting to Mozambique’s three-position slide to 137th place in the World Bank’s “Doing Business” index which came out last week. In two years, Mozambique has fallen eight places, with the study concluding in its latest edition that there has been regression in virtually all aspects analyzed.

“No one will come out and invest in a country at war,” Manuel says, “You’d just go to South Africa.”

The CTA president also warned that the political and military crisis creates an image abroad where “people think that the whole country is at war and do not know that these are small outbreaks of conflict”.

This perception of “total fear”, he continued, affects even Mozambican entrepreneurs. “No-one is investing” in sectors such as agriculture or other areas outside the cities, but are holding back their money “for better times”.

Manuel also referred to the adverse effect of falling commodity prices, rapid devaluation of the metical against the dollar, galloping inflation and reduced investment.

“There are several things we have to look at, that I am referring to the public-private dialogue to get some improvement in the Mozambique business environment,” he said.

In late July, the president of the CTA said that companies needed a good business environment but that there was just the opposite, and accusing the government of doing little for the private sector.

“Companies need a favourable business environment, where they have lower transaction costs, enjoy speed in decision-making and the elimination of all state bureaucracy. In Mozambique, exactly the opposite is the case,” Manuel told the opening of the Annual Private Sector Conference.

Speaking in the presence of President Nyusi and several members of the government, the president of the largest Mozambican business confederation complained that “those who produce or want to produce have no incentive to do so”, face high interest rates and have to “pay the costs of an inefficient state bureaucracy”.

Rogério Manuel recalled that, in 2015, a public-private dialogue model was approved, but “one year later, the situation remained as it was and, in some cases, had deteriorated due to the inertia of some leaders.”

Source: Lusa