Download - Competition Policy And Private Sector Development In Mozambique Presentation By Alberto Bila
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Competition Policy And Private Sector Development In Mozambique
Presentation By
Alberto Bila
UEM - Faculty of Economicsand
ADECOM
Mauritus 29-30 of March 2007
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IntroductionMozambique environment
- Peace and Macro-stability
- Growth average – 8%
- GDP per-capita +/- 285USD
- Population 19 million
- GDP = 5.5 billion USD
- =-
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Mozambique environment
- Agriculture – 25% of GDP
- Industry – 35% 1%
- Services – 40% 5%
- FDI projects improved external trade balance
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Economic Policy Context
1. Macro-economic reform policy reform
- ”Economic reabilitation Program” 1987
- Raise production levels
- Reduce financial imbalances
- Create a basis for growth
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Economic Policy Context
- Fiscal Adjustments
- Devaluation of the currency
- Agriculture – Government controled prices of few items (sugar, bread, fuel and medicine)
- Crips rose
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2. Domestic and external trade policy
Set out objectives Rehabilitation and expancive of the commercial out
work Stabilishmentof trade systems ( including incentives) Creation favourable environment for private sector
development Revision of commercial code and trade laws Development of human resourses
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Competition Policy Scenario in Mozambique
Need for competition policy: - 43% consumers affected - Effectiveness of existing regulation - Competition law to cover all enterprises
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3. Investment climate and business incentives
Investment law is aimed at attracting local and foreign investors
Exemption from customs
Tax incentives (ten years maximum)
Industrial free zones (IFZs)
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4. Industrial Policy
•Aims- Developing industry and making better use of natural
resources- -increasing the value added to products- - Diversity national industry- - Subsisting imports of intermediary goods
- •Indicates the role:- - state is to regulate and supervise the development of
industry- - private sector is to invest- - informal sector in generating employment and
income.
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5. Poverty Reduction Action Plan (PARPA)
Overall objects
- reduce living in poverty from 70% 1997 to below 50% by 2010
- economic growth
- public sector investment in infrastructure and institutional reform.
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Environment for private sector development
• GOOD• - creating a stable macroeconomic environment • - liberalizing controls on foreign exchange
transictions;• - liberalizing prices licensing and other controls • (domestic markets and external trade)• - rationalising tax and tariff structure• - liberalizing investiment laws• - actively promote foreign investment and exports.
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Private sector dev. In Mozambique
••SMES in MozambiqueSMES in Mozambique
- Little priv. Sector development - SMEs supper the most from adverse economic conditions and
little conducive business climate
•The failed potencial of privatization for private sector development
- under-developed network utilities - Financial policy envirnment lilted towards foreign investors - stock-market in its infancy
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Private sector dev. In Mozambique
• The costs of doing business in Mozambique - Direct costs such as labocer are not high
productivity
Unit labour costs
Mozambique 11-12 +/- 0.25%
Africa 14 0.16%
China 18 0,23%
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Private sector dev. In Mozambique
- Indirect costs account for 20-30% of costs
Energy: 1/3 of total, transport telecom, security - Limited acess to finance -Limited market acess
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Insufficient and Deficient Infrastructure development
•Obstacles
- Effect of lack and disruption in energy supply
-high transport costs
- Major improvment: TELECOM
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Insufficient and Deficient Infrastructure development
•Access to infrastuture: Energy botleneck and exclusion of rural population .
% of total of pop.
% rural % urban
Electricity 25 10 65
water 54 51 80
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Insufficient and Deficient Infrastructure development
• Electrification rate – 20%
• TELECOM: impressive progress
- fixed 3 per 100 inhabitants
- mobile 9 per 100 inhabitants
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A limited access to finance
•Bank credit to private sector in 2005 (in % GDP) 3%
•Adopting axisting lending institutions of tools - More towards on integral system for financing
SMEs
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Limited market integration
• Trade Issues
- limited intra-regional Trade
- limited insertion in world economy ( nom trade-barriers)
- Emerging markets ( China)
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A predatory public sector
•Taxation, corruption and inefficient regulation - doing business paying tax rabk/ 17580
•Not social trouble
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Key messages
•Rethinking the role of state in Mozambique
- Limiting interface with private sector activity last increase dialogue
- Strengthening institutional capacities ( regulators framework and public sector management