What is the largest obstacle to overcome in the development of the business environment in Mozambique?
CARRIE DAVIES Uncertainty is quite simply the single largest issue. Legal certainty is essential for businesses to invest, grow, and develop. Businesses can manage in a legally complex environment, but uncertainty, such as regular changes to legislation, uneven implementation, and high levels of discretion are extremely detrimental to them. The level of uncertainty in Mozambique's legal framework is the single largest obstacle.
ROGÉRIO MANUEL We are fighting to solve the problems and overcome the challenges we face year after year; one of them is the integration of local and international companies. Businesses operating in Mozambique can be from the US or UK for example, but if the company is registered in Mozambique, the CTA defends that company. The first problem is communication. For example, if there is a large international drilling company looking for catering, it may have difficulties securing the most appropriate local partner. There is often an international tender that is poorly advertised to companies in Mozambique, and thus no one bids for the contract.
What sort of regulatory changes do you think still need to be made to improve the business environment in Mozambique?
CD While regulatory changes to reduce the centralized control of the business environment and reduce government interference in business activities would be welcome, above all a reduction in the number of changes to legislation thus creating stability would be more important. There is a need to reduce the uneven application of legislation and new legislation should be drafted in such a way as to limit the amount of discretion available to the public administration.
How does the CTA work with international companies that invest in Mozambique?
RM The CTA is a promoter of business in Mozambique, and our budget comes from the government. What we are doing is selecting special companies, often the largest companies in Mozambique—Vale, Rio Tinto, and Mozal—that are all members of the CTA. We have invited them to be part of a smaller group of the 25 largest companies along with the CTA, which is called the National Business Council (CEN). These companies advise my board on issues private businesses face. We participate in meetings with them about once a month, where we sit down and discuss the issues, as well as being in constant touch by e-mail. Every day, the government is bringing up new issues to be discussed or laws to modified through the CTA.
What trends can you identify with regards to the development of local SMEs, and to what extent have SMEs benefited from megaprojects?
CD There is some development in the SME sector. However, the changeability and uncertainty of the business environment makes it relatively unwelcoming for SME level investment. The growth of the economy based on large-scale investments depends on a trickle-down effect, with SMEs potentially providing products and services to other business several tiers below the major investors. There is significant focus in this area currently and in 2013 ACIS is introducing an online procurement platform that will facilitate access to local suppliers for major investors and access to markets for SMEs.
How is the CTA working to improve Mozambique's ranking in the World Bank's Doing Business report?
RM We have identified 12 points that caused our ranking to fall, which we have shared with the government. These points have nothing to do with the writing of policies, and in fact we simply struggle to implement the policies we have amended. The relevant ministries are listening and working to rapidly address the points; they have set strict deadlines. On those dates we are going to check if each point still needs to be looked at or solved.