Mozambique: Domestic Producers Need Protection and Farm Bank says CTA

“We continue to spend lots of money importing products that we could grow locally” because domestic producers are not protected and cannot obtain credit, according to the president of the Confederation of Mozambican Business Associations (Confederac?a?o das Associac?o?es Econo?micas de Moc?ambique, CTA), Roge?rio Manuel.

In order to encourage foreign investment, the sugar industry and Coca Cola were given high protective tariffs to discourage competing imports. But such protection is only allowed for international companies, not for domestic producers. “There should be incentives for the domestic producer. Here, there are no protection policies for producers of rice, tomato, potato, among others. If there were protection for domestic producers, entrepreneurs would have more than enough incentive to invest in agriculture.”

The other issue is agricultural finance. “We cannot discuss the production of rice or other agricultural products based on commercial funding. This is unthinkable and unsustainable – it has to be a specific funding. Only a crazy entrepreneur would go to a commercial bank for a loan at twenty-some percent interest to invest in agriculture.”

A decade ago donors and lenders blocked the setting up of a development bank. Later BNI (Banco Nacional de Investimento, National Investment Bank) was set up, but “BNI is not playing the role of a development bank. Since its inception, it has been focused on large investments in infrastructure and energy.” Manuel continued: government “recently invested millions of dollars – which it borrowed from Brazil – to buy equipment to mechanise the agricultural sector. But these machines are in the hands of people who rent them out to farmers – activity that should have been undertaken by a development bank, but the donors did not agree.”

Manuel is caustic about the government. “There is talk of a local production strategy, but this is merely political talk – behind the speeches there is no tangible activity related to local production.” He continued: “Recently, the economist Ragendra de Sousa – who was appointed Deputy Minister of Industry and Commerce – said that in Mozambique there are no business people – just people with business cards and that’s it. This is ridiculous, and I think it is this perception that some govenrment officials have, a way of seeing national businessmen as not going anywhere.” But it seems as if the only entrepreneurs they know are just the ones only with cards in their pockets, he concluded.

Source: Mozambique News Reports & Clippings.