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Business Still Facing Many Constraints

So far efforts to make the business environment in Mozambique simpler and more constructive for the economy have not met even half the expectations of national and foreign businesses working in the country, warned Salimo Abdula, chairperson of the Confederation of Mozambican Business Associations (CTA), on Thursday.

Addressing a meeting of the Expanded Consultative Council of the CTA, Abdula said that the business environment remains "very complicated", and he blamed this on sectors of the government who refuse to carry our President Armando Guebuza's slogan that "Decisions taken must be implemented".

These government institutions were not implementing the mechanisms defined by the government itself to facilitate business, accused Abdula, cited in Friday's issue of the independent newsheet "Mediafax". They included ministries, provincial directorates and district administrations.

"The ability of some ministries to implement the decisions taken remains limited", he said. "We need to revisit and revise the consultative mechanisms, and improve the ways of implementing the agenda we have agreed".

But not everything was bleak. A survey recently undertaken by the CTA shows that licensing a company can take around 30 days - a significant improvement on the claim made by the World Bank, in its "Doing Business 2007" report, that it takes 113 days to license a company.

(These World Bank reports, relying on anonymous sources, should be taken with a large pinch of salt. Yet, despite the obvious flaws in its methodology, foreign donors and even the government set benchmarks based on the "Doing Business" report.) Nonetheless, Abdula regarded the improvement as slight - because there were still lengthy delays in obtaining environmental impact studies or land use rights.

Businesses continue to regard the banking system as their worst nightmare. Abdula considered the interest rates charged by banks as "really scandalous".

He also attacked the inspectorate of the Ministry of Industry and Trade for undertaking "destructive" inspections, rather than prioritising dialogue between institutions.

Prime Minister Luisa Diogo attended the meeting and recognised that some difficulties do indeed limit business activity in Mozambique. But she pledged that the government is committed to dialogue with the business class, in order to guarantee that the private sector is a reliable and secure development partner.

Diogo said that the government's anti-poverty strategy rests on the assumption that the business sector is a genuine creator of wealth, and should thus be given the necessary conditions for its development.

SOURCE: AIM


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