Mozambique seeking to be most competitive southern African economy by 2015

20 July 2006

Washington, United States, 20 July – The Mozambican government is finalizing with the World Bank a plan to boost economic competitiveness with the aim of becoming the most competitive country in the region by 2015, officials have said.

The International Monetary Fund, in its latest report on Mozambique published Wednesday, welcomes the initiative and considers it “vital” that Maputo takes action in areas such as labor market flexibility, justice and property rights, as well as private participation through public sector partnerships in infrastructures.

The IMF recognizes that “there has been some progress made in improving access to finance, both bank credits at multilateral financial institutions and in the widening of the national electronic banking network.”

Finance and energy were, together with corruption, seen by international entrepreneurs as the three main hurdles to business in Mozambique in the World Bank study “Doing Business 2006”, which ranked the country in 110th spot in a list of 155 countries.

Taking into account Mozambique’s improved business climate, the IMF also recommends publishing of more frequent and rigorous statistics to “facilitate the creation of efficient policies.”

The IMF granted a loan of US$ 2.4 million last month to Mozambique after approval of the new stage of its economic assistance program to the country.

“Main risks” to the implementation of a program of economic growth identified by the IMF are continuing world hikes in fuel prices, lower than expected tax revenues and a “hasty” tax decentralization.

The IMF also calls attention to the need for “vigilance” in commercial transactions relating to “mega projects”, such as the Mozal aluminum smelter and the Sasol gas processing plant, with a view to lowering external vulnerability, particularly in terms of debt.

According to IMF figures, these mega projects last year accounted for imports worth US$ 393 million in payments and US$ 504 million in services, with a trade surplus of US$ 365 million, taking into account exports to the value to US$ 1.3 billion. (macauhub)