CEO (MCNet)

Interview conducted in Portuguese by Alejandro Dorado Nájera (@DoradoAlex) and Diana Lopes.

 
Your company is responsible for a technological breakthrough (Single Electronic Window or JUE in Portuguese) that revolutionized revenue collection and merchandise processing in Mozambican Customs, which is vital in the management of goods from Mozambican ports and airports, for the creation of reliable statistics and for the collection of State revenues. Could you explain to us how the JUE works?

The prospect of MCNet is large and a part of the logistics of this country. Our platform is involved in everything related to moving goods in and out the country. It intervenes providing information to all entities that interact within the chain, in both domestic and international logistics. JUE is involved in the collection of the Customs Authority’s customs duties and in trade facilitation.

The JUE is a platform that is the result of the reform of the Mozambican State in country's critical areas such as the example of the tax collection. In 2002-2003 the country was cited as one of the most corrupt countries and, within the public sector, the police and the customs were the most marked. The Government then decided to move seriously on transparency in customs. JUE is the result of this effort from the Mozambican State to reform customs procedures and thus bring credibility to the public finances of the country.
It is a public-private partnership (PPP) which has the international part as majority shareholder with a 60% - the Escopil and SGS consortium that I represent-, the Confederation of Economic Associations of Mozambique (CTA) with 20% and also the Mozambican State represented by the Ministry of Economy and Finance with the remaining share of 20%.
SGS is the technological partner: a Swiss firm specialized in the inspection of goods. This company has developed a technology, the single electronic window, which has two levels: the first, with the internal processes, is the Costumer Management System, where our customs authority monitors the customs process to provide the proper permits. Then, we have the second platform, Tradenet, more commercial, that is where all other stakeholders of the foreign trade sector chain interact: commercial banks – we have 13 or 14 banks interconnected with JUE out of 18 in the country – and 200 other customs brokers, the Central Bank, and also freight forwarders and shipping agents.
 
What are the degree of implantation and the structure of the JUE?

The JUE is implemented in 80% of the territory, thanks to our service providers and our interaction and efforts, not only in bringing synergies between them and the JUE, but also in catalyzing the specific requirements and needs of the system, transferring these responsibilities to the partners allowing them to also grow at the level of our demands. For that to happen, an increase in investment on our part and on the part of our suppliers was required.

In the telecommunications area: we have an excellent data center; ISO quality in infrastructure and in information security.
We have 6,000 technicians in total interacting around the JUE. Ninety-five percent of trained technicians are Mozambicans, including customs officers who we have formed without dismissing anyone, just reframing their skills and providing training in our centers in Maputo, Tete and Beira.

We cooperate with the Government and its needs us to expand our services to cover all exchange boundaries. We are all over the territory: rail, port, and land borders, all ports and airports and also in the dry ports like Tete.

What does the JUE mean in terms of saving time for port users? And, in terms of increased tax collection for the State and fight against corruption?

One of the major gains of the JUE is that, in terms of import / export processes, we went from 32 to 7 steps. We went from a 7-day waiting period at the port of Maputo to spending 24 to 48 hours for an operator to make a pre-declaration, and make the payment for the goods to pass directly through customs. In fact, we are eliminating the concept of warehouse and storage in the customs and the goods will go directly to the operator’s warehouse. If the goods are stored by customs, it is either because they aren’t clear or because the operator is not prepared for the JUE.

In addition, the Central Bank, which can monitor the volume of monetary transactions today, can see the companies importing and exporting, which is very important for the balance of payments and to create statistics for the Central Bank, the National Statistics Institute (INE) and the Investment Promotion Centre (CPI).

Now we can make the interconnection between the Central Bank and commercial banks and transactions are made via JUE. The Central Bank has visibility to know who makes the letters of credit to find out which bank issued these letters and if they are paid or not, important for the control of the Central Bank. The JUE helped to organize and bring credibility and reduce financial fraud at that level.

Also in the interaction with the other customs, the major goal at this point is to be able to cross the information that is declared leaving Mozambique and entering in another country to be able to close the leakages of the financial system of the country.

Does MCNet have plans to expand to other countries?

We received requests from interested neighboring countries, such as of South Africa, Zimbabwe, Namibia, Malawi and Botswana, to know how the JUE works. We have also been proactive in visiting some countries to explain our experiences and good practices to other regions.
We also worked on the integration of our system in the region to be able to better integrate logistics with other countries to bring benefit to local and international operators trading to and from Mozambique.

These models always need local institutions. We have a partnership with SGS, a Swiss firm, and the mix between our knowledge of the country’s characteristics allied to the international experience of SGS and their knowledge of the technology has resulted in the product that we have developed, the JUE. For the success of the product, you need to know your product but also the local characteristics of their market where you want to implement it. Each site has its specificities, its own legislation and its people’s characteristic behavior. It is very important to have a local partner and our implementation model cannot be understood without the existence of a local partner.

The fact that the country has a technology like the JUE can be decisive for the choice of the investors when choosing a port of landing or shipment of goods. How does MCNET disclose the opportunities the JUE offers abroad to improve the competitiveness of Mozambican ports?

At the regional level we conducted a road show and visited the authorities of Malawian, Zimbabwe, Democratic Republic of Congo, among others to inform about the process and the impact of the implementation of the JUE had. We promoted our work within the business community and did advertising about the JUE in those countries. Today there is a strong awareness of what Mozambique is reaching in terms of the level of information technology and in this specific case applicable to the customs field.

Finally, what is the message that Mr. Samo Gudo wants to convey to potential investors and readers of HBR about Mozambique and investment opportunities its technology offers?

Our platform is very well implemented. Managers know very well the characteristics of geography and these are key factors to be able to expand to other sectors where we think we can find synergies. Experience in countries like Ghana, where JUE expanded to other sectors for both internal and external taxes, can be a good inspiration.
The Tax Authority is the same, the staff are almost the same too, infrastructure, integration with the Central Bank, the network of commercial banks, the data center, and quality certifications are already developed. The JUE is prepared to take other projects. We are mature, have the knowledge and are ready and willing to launch other projects.

For the readers of Harvard Business Review, and talking about the country, the level of foreign and domestic trade of Mozambique has grown considerably in recent years and the cutting-edge systems that are to facilitate trade in other countries are also in Mozambique, as in the case of JUE. These technologies will reduce transaction costs, improve the doing business environment in the country and bring predictability in processes for both, the exporter and the importer. This means that these synergies created by this platform are creating a suitable environment to optimize the competitive advantages of Mozambique.

We are preparing the country and creating conditions for investors to realize that it is worth investing in Mozambique