Mozambique: Cotton production to be liberalised

19 March 2009

Maputo, Mozambique, 19 March – Cotton production in Mozambique is due to be liberalised, bringing an end to the current concession system, according to Mozambican newspaper, Notícias.

The paper cited the document entitled, “Reflection on Models for Development of Cotton” approved by the Council of Ministers, according to which cotton will start being produced on a free market basis, for which it is necessary to undergo a transitional phase of reforms, which will last seven years, a period that is considered to be reasonable for a return on investment and to set up the conditions needed for liberalisation.

Despite its strategic importance, the cotton sub-sector in Mozambique faces problems that range from a lack of adaptability of varieties to the inefficiency of packages to control blights.

There are also some administrative constraints, such as the financial frailty of companies, the poor state of access roads for transporting cotton, the inexistence of credit and agricultural insurance schemes and management of market shocks.

In the face of all these constraints, the Government has approved a document, the execution of which is expected to bring significant changes to the sector, including changing current concession contracts. (macauhub)