Energy and mining companies hire all available qualified workers in Mozambique

5 December 2011

London, United Kingdom, 5 Dec – The rapid expansion of the activities of mining companies is “drying up” all of Mozambique’s qualified workers leading the government to launch exceptional measures, including a review of the labour law, according to the Economist Intelligence Unit (EIU), of The Economist group.

The latest EIU report on Mozambique noted that the “severe” labour constraints that lead to companies having difficulties finding qualified staff, also extend to some services for associated sectors, such as engineering and construction.

“Service companies capable of meeting the needs of large multinationals have been flooded by the current level of capital influx, involving billion-dollar investment projects,” the EIU economists said.

The total value of mining investment projects in Mozambique is estimated at US$11.6 billion, with coal accounting for the largest slice, of US$7.1 billion.

Due to these investments and the start of production of these projects, the economy is expected to maintain its upward trajectory over the next few years, with growth of 7.3 percent in 2011 to 8.5 percent in 2013, according to the EIU.

The labour market in Mozambique has a deficit fo qualified workers on several levels, including senior and middle management and technical and semi-qualified staff.

According to the EIU, teaching is not sufficiently focused on the needs of the private sector and foreign companies have also had difficulty adapting to the strict Mozambican labour laws, which limit jobs taken by foreign workers to 5 percent of the total when staff number more than 100.

The limit is 8 percent for companies with between 10 and 100 workers, and 10 percent for companies with up to 10 workers.

The number of engineers, geologists and metallurgists trained each year is around 20 to 30 at the country’s largest university, in Maputo, and around the same number at the main polytechnic institute.

In order to adapt, some companies have been hiring workers that are not entirely qualified, whilst others have been taking on foreign workers as short term consultants, with renewable contracts, sub-contracting companies or outsourcing for specific contracts.

Given these difficulties, the EIU noted, the government has responded to calls from the private sector, namely the Confederation of Economic Associations (CTA), and in October concluded a review of the labour law specific to the mining and oil sectors.

Although the quotas remain unchanged, companies in these sectors will now be allowed greater flexibility to employ foreigners through contracts of up to six months, and need only inform the authorities rather than applying for the contracts to be approved.

Specific investment projects may receive approval from the government for their foreign worker quotas to be increased.

Another solution that has been found is to grant authorisations to expatriate workers when it can be proved that qualified workers cannot be found locally. (macauhub)