Study shows that Mozambican industry is “stagnant”

24 January 2014

Mozambique’s industrial sector is “stagnant” according to a study on the sector published Thursday in Maputo, which analysed over 700 micro, small and medium-sized Mozambican companies and paints a picture of an uncompetitive sector.

Put together by Mozambique’s Ministry for Planning and Development and in partnership with the Confederation of Economic Associations, Copenhagen University and the Business Climate Fund, the “The Manufacturing Industry Survey – 2012” (IIM-2012)” outlines a less than optimistic view of this industrial sector of the Mozambican economy.

Based on an identical survey carried out in 2006 (IIM-2006), researchers analysed 761 companies and concluded that the sector had developed only weakly in terms of production and competitiveness since the last survey.

“Given the average annual growth of 8 percent of the Mozambican economy this suggests that industrial SMEs are falling behind the rest of the economy,” said Augusta Maita, assistant director for Policy Studies and Analyses of the Ministry.

Noting that Mozambican companies had a “very high level of survival” Danish economist Finn Tarp, of Copenhagen University said that “this is a sign that things are not going well.”

In an analysis of perception of constraints facing businesses in terms of business development, the researchers were “surprised” by some data, such as a drop in the concern of businesspeople about access to bank loans: 66.2 percent in 2006 and 47.5 percent in 2012.

According to Tarp this figure shows that companies “are not looking to grow,” and is evidence of the sector’s “stagnation”.

IIM-2012 concludes that most companies – 88.5 percent – made use of their own income and that just 8.2 percent requested bank loans to carry out investments.

The researchers also showed concern about companies reducing their number of workers instead of increasing staff numbers.

Pointing to the example found in a sample of 92 small companies, the study showed that 23 of them became micro companies and just 11 of them rose to become medium-sized companies in the period. (macauhub)