Question 1: How did you
find the Ministry when you arrived, what were the main
challenges that you had to face at the beginning, and
three years later, what are your main achievements?
Answer 1: I came from the real economy where people want
quick leaders and simplified processes. There was already
a building up process to simplify the administrative process
within the government.
After three years at the head of this ministry, I'm very
happy to say that we have achieved quite a lot in this
respect. It is now very easy to get a license or permit
to establish your company. You can generally get a quick
response from the institutions. Of course you do not get
the same response from all the institutions and in all
provinces of the country as some are more advanced then
others. There is still work to do to make it better, and
I am doing my best to keep up with the promises that haven't
been immediately achieved. The different speeds of transformation
which has a lot to do with the local culture, local knowledge,
and local human resources but there is a huge process,
and we are establishing a real public-private partnership
with a process of interaction between the goals of the
private sector and what the economy really needs. This
partnership also helps us identify the bottlenecks and
difficulties in the industry. Every year we have a conference,
a National Conference, between components of the private
sector and the government. We identify a list of current
problems that are restraining the development of the industries
within which we identify the ten majors ones.
Then we commit ourselves and I'm very happy to say that
we have achieved that development and we have even achieved
the transformation of the bodies in interaction. And we
are also implementing the Red Tape program to fight against
corruption by simplifying processes, which is the most
crucial thing. We do believe that without making large
efforts on simplification, corruption will remain. To
make the economy work, we have to have simplify processes
and make it every time much easier for the company to
establish themselves thus definitely reducing the strength
of the sectors where corruption is still present.
Question 2: You mean that the shorter the process,
the less corruption?
Answer 2: The shorter the process, the more simplified
it is, the better benefit for the economy. What we have
been trying, through a governmental program, to do is
to make the legal system much easier. Thus to create
a company we are going to establish a one stop shop
facility. You can get in one shop everything: certificates,
import authorization cards, tax card, etc. Today this
is a huge challenge because we need to change the culture
of the people and traditions. And something very important
is to give a good vision and mission to the people that
have been doing that value added process. They need
to feel that they are part of this new process, they
need to change their culture, and need to change their
position. But we have very good support from all the
different departments. We believe that in the next 24
months company registration will be very simple and
as good as in any other country. Today we believe that
it is a crucial issue. We are also looking for other
difficulties in the process that we believe restrain
economic development. In fact we are looking at the
labour law in order to see where it can be used as an
instrument for development instead of being seen as
a restraint. But we need to understand that it is also
a social issue. So as we evoke this interaction between
the private sector and the government, we also need
to build up on the relation between trade unions and
government.
There must be a common ground where everybody gets involved
in the decisions and so we can end up with the social
contract that will reflect the engagement of development
that is also socially responsible. We need to create
such a balance to obtain sustainable development for
Mozambique.
Question 3: Having read several of your quotes over
the past three years, you have repeatedly stated that
foreign investment is crucial for Mozambique's development.
What are the policies you are putting in place to make
Mozambique more attractive to foreign investments?
Answer 3: I think we have done a lot of reforms on incentives
for attracting investment and there is a concern with
the development issue to make all the regulations as
understandable and precise as possible to investors
in order to create an attraction point for investments
in Mozambique.
Obviously what we need to do also at the same time
is to get some initiatives that will be shown as a success
story. By the way, Mozal was for us a success story.
We understand that as a mega project its impact on the
economy can be very important on a macroeconomic level.
It might not be the same on job creation, but it does
give a perception that every thing is possible in terms
of investment and people can understand that what we
promise to deliver we are going to deliver. The good
example is that the Mozal project was designed to be
the terminated in 31 months and it was terminated in
35 months. The investors initially they may have some
conservative approach, but by perceptions they realize
that it was not the case. To strengthen this idea we
have the case of the MOZAL II program, which is the
extension of MOZAL, which was designed to finish in
19 months and was actually finished in 15 months. So
in the second phase with the knowledge of the investors
from the first phase we achieved to improve our delivery.
Obviously the merit resides mostly on the investor but
the entire infrastructure reacted in such a way that
there was an improvement on the delivery of services.
That's the type of flag we want to put and we see that
it is possible and tell you what that is a very crucial
thing. Investors need to develop a model of development
and once agreed we will comply but he needs to prepare
a full perception of what he is going to do, of what
his intentions are. Thus maybe the preparation must
be more carefully made to guarantee the success of the
investments. The good thing is, once we agree on a certain
model, on a certain project we deliver and every time
we are delivering better than we did before. As an example
we have the second phase of Mozal. We will have a MOZAL
III project in the future and I am sure we will do even
better. That means that there is a progress within the
government structure to respond to a real need. To get
this good perception of it is a crucial factor on this
partnership between the public sector and investors.
When we think of MOZAL initially being a high tech initiative
there were some doubts about the local skills. But it
is very good to know that for the training program,
that was very comprehensive and very well designed by
the investors, the success rate was very close to 100
per cent and every body applying for training was successful.
This could have created another problem to the investor
as they obtained more people than they needed initially.
Nevertheless this demonstrates that the skills in Mozambique
are good.
Even if foreign investments on free zones only allow
you to have a 10 per cent expatriate labour force, initially
the MOZAL project had a 15 per cent quota. MOZAL today
is under a 10 per cent quota, only after two years on
the project. This demonstrates that the perception that
local labour force cannot fulfill the job is wrong.
There is potential, there are skills, there is a labour
force that is basically trained to be effectively go
through training programs.
MOZAL no longer needs to have that 15 per cent expatriate
quota that was put in place to attract that investment
because of the labour force perception problem. In fact
the government agreed to adjust the quota to 15 per
cent just to solve this perception problem.
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Today we are happy because
in such a short period of time, the MOZAL project has
come back into the regular framework with a 10 per cent
quota, the full legal term, and this also proves that
the Mozambican people are skilled.
Question 4: For investors, the efficiency of the
work force and their skills is a crucial factor. You
therefore believe that this is an advantage Mozambique
possesses?
Answer 4: Yes I believe so. If you have an investment
here you need to agree with the work force on the conditions
of work. Once you agree on these conditions, all of
us will comply. It is not very uncommon that the labour
force does not comply. Once you agree with the labour
and the Trade Unions, there is no way the labour force
will not comply. On the other hand if you do no have
an agreement and only go with a normal work contract
on an agreement then you may have a risk.
Question 5: What can you tell us about the bilateral
or multilateral agreements like the AGOA and SADC in
which Mozambique is involved?
Answer 5: Concerning the SADC agreements, the removal
of tariffs to have access to markets and the reduction
of taxes are obviously investment incentives. The Ministry
of Industry and Trade is prepared to assist any investor
to identify the specific initiatives. Into the future
the SADC markets will integrate into a free trade area,
which will naturally take some years, but is an ongoing
process of disarmament of tariffs. Also under the AGOA
agreement there is a huge potential for industries,
as there are 4 thousands plus items with very generous
rules of origin that can have access to the United States
free of quotas and tariffs.
The agreements that we have with Europe and that we
are now reviewing to establish new agreements is also
quite attractive. We, as a country that is basically
agricultural, we have a huge potential for agro industries
with a good market access to Europe which is an important
factor for agricultural development which has a big
potential. Agriculture and agro industries are the growth
engines of the future and Mozambique is going to be
a huge source of agricultural products. We do have also
other areas that are very important as for example Metrogas.
It is true that this is in South but we are making exploitation
now in the center and we expect to find new gas reserves
and it may be that we find oil. In fact if there is
gas present we should find oil. The South has become
a huge attraction because the available networks and
because there are lots of industries that need thermo
power, and with gas at a very competitive price there
is a huge development potential. In fact power development
has a very big potential in the region and this is very
attractive to various industries. In fact in short term
we have huge capacity available for industries and that
is why MOZAL is here, that is why we are talking about
other aluminum smelters.
Question 6: This concentration of industries demonstrates
the attractiveness of Mozambique. Could you explain
to our readers the nature of this attractiveness?
Answer 6: All the incentives, all the taxes regimes
do act as a differentiation factor. We are really engaged
and we are trying to give a Mozambique a difference,
and this is our main preoccupation. But if you look
at the regions within Mozambique, the one that is more
developed is the one closer to biggest market, which
is South Africa. Obviously, being various national economies
become interrelated and with our commitment to African
integration this will increasingly true. It is true
that we are trying to put in place all the incentives
to make things happen quicker in the North and the Center.
Nevertheless we cannot pay for it. Our obligation is
to create the necessary conditions to increase these
regions attractiveness. We need to develop infrastructures
in the North and the Center in order to make it more
favorable for investments. But again we don not have
the resources necessary for that and that is why we
trying to create the environment that will attract these
resources and consequently the development of the regions.
It is going to dependent on our progress in terms of
stabilizing the economy and maintaining the peace. We
can already see some progress in various provinces in
the North, in Nampula for example, where small and mediums
companies are coming out and flourishing. The development
process is picking up although these are still small
investments. With the Nacala Corridor, that will open
a flow of traffic between Malawi, Zambia and Mozambique,
we expect to make the region and Nacala a hub for inter
land trade. In the future it could become a hub for
trade directed to other destinations in the region.
Thus we need to improve infrastructures and that is
why we say that the Zambezi river bridge project is
crucial as one of the richest province we have is the
Zambezia Province. Everything can be produced in the
province and thus it has a great potential. Nevertheless
the local domestic consumer market being so far apart
make the transport costs unsustainable and the result
is that imports can compete with local production. Again
the reason is the lack of infrastructure. The Zambezia
Province is the richest in terms of agriculture and
industry potential but is also has the highest poverty
index capital because it cannot take advantage of this
potential. Thus the importance of the Zambezi River
Bridge Project and in general, the development of infrastructure
across the country.
Question 7: There are various examples of Multinational
Corporations operating profitably in Mozambique. What
are the reasons of their success?
Answer 7: All of these companies have been successful
because of their culture, which makes them follow the
structures. They did not try to skive them but instead
they go straight forward analyzing the projects, their
needs and their difficulties. Then they come up to the
government and present their project and state their
needs. The government then collaborates with them to
set up the project in the most effective way. In fact
the government is the first institution to give advice
and help these projects get started and make the investment
a success. The message is that we, at the government,
with our team, strive to be partners in all these projects.
We want every single investment to be successful. We
are opened to come out with the proper advise, proper
recommendation, and if needed to put our human resource
as we have done for Mozal, Sasol and others. We give
all our best because we cannot and do not want to miss
the success for any investment project in Mozambique.
Question 8: In 2002 you had a growth rate of 63
per cent in industry in comparison with 2001. There
is a new Mozambique that is coming into place. Could
you tell our readers about the real Mozambique?
Answer 8: The new Mozambique is a peaceful Mozambique,
which is the crucial factor because Mozambique has always
been here. Obviously with the war we did not attract
investment. Today with this precious peace we have,
Mozambique has come alive. Peace is here and it will
remain. The other change has been in the engagement
in deep economic reforms. We are moving forward and
our commitment to make Mozambique a successful country
will remain. Peace and engagement are the two words
that describe best the new Mozambique.
Question 9: What would be your final message to
our readers.
Answer 9: Mozambique and the government are working hard
to develop the country. We have committed and we have
proofs of positive results. We have reformed the economy
and stabilized the macro-economy. Today all is needed
is for investors to come and realize this by themselves.
NB: Winne shall not be held responsible for unedited
transcription past the fifteen days delay after remittance
of the latter.
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Honorable Carlos
A.S. Morgado