by Bayano Valy – SANF 04 no 109
Except for one candidate and his party, all Mozambican political parties have promised, albeit with slight differences in approach, to create a favourable business climate and by extension, increase jobs.
Indeed, the issue of jobs dominated much of the campaign period with parties vowing to increase the current figure of formal employment which stands at slightly over 521,000, just five percent of those in the active age group who make up about 8 million.
Employment figures suggest that the remaining 95 percent are either in the informal sector and agriculture, or not employed at all.
Out of the 521,000, about 125,000 are civil servants. The private sector argues that it could employ more if the state could create more incentives for job creation.
Such incentives could include reduction of company tax, getting rid of the clumsy red-tape, reduce customs duties, overhaul the labour law to make it easy to fire workers, among others.
Abdul-Magid Osman, a former Finance Minister, recently said that bureaucracy hinders business in the country. He said that, according to the World Bank, it takes on average 153 days to register and obtain authorisation to start a business in Mozambique.
This is much longer compared to regional countries such as South Africa where it takes 36 days, and 38 in Tanzania.
As for firing workers, Mozambique seems to have the costliest procedures in southern Africa.
So the political parties and respective candidates have taken this into consideration and accordingly seem to want these concerns addressed.
President Joaquim Chissano, who is due to step down when a winner from the 1-2 December elections has been announced, said that the ruling Frelimo party candidate, Armando Guebuza, would continue where he had left from, that is, protecting the gains the country has made under his leadership, and advance social and economic well-being.
It was under Chissano and Frelimo that from the first general elections in 1994, the country registered an impressive average Growth Domestic Product (GDP) above seven percent in successive years.
The combined average GDP growth rate in the Southern African Development Community (SADC) has been around 2-3 percent during the last five years.
Mozambique’s GDP per capita stood at US$80 in 1994, but has now climbed to US$250. However, the business sector argues that although the growth is welcome, it is not sustainable as this growth is largely aid-based rather than business-based.
So the private sector has urged the forthcoming government to reverse this situation. Economist Hopólito Hamela told SANF that “there’s no doubt there’s economic growth. Mozambicans dress better than in 1994, but the problem is that this growth is not sustainable.”
“The growth is not due to investment in the private sector, or job creation. It is hugely dependant on foreign aid than work from Mozambicans,” said Hamela.
He said it is necessary to reverse the current programmes and concentrate on the private sector.
Only by investing in the national private sector “can the businesspeople generate money and more investment, and thus have money to pay taxes and wages.”
So the trick for the future government to emerge from the 1-2 December general elections is likely to be finding the right ingredients to change aid-dependency.
The ruling party has managed with some success to reduce aid-dependency. In 1999, Mozambique’s state budget was 60 percent aid-funded. Prime Minister Luísa Diogo, who is also minister of finance, says that it now stands at 50 percent.
“We want more [local funding],” said Hamela, adding that “aid-based development is not good for the country.”
It is against this backdrop that Guebuza told his rallies that should he win, he will create conditions to render the country more competitive and attractive to national and foreign private investment.
He also said that he would promote small and medium scale companies; create flexible and less expensive mechanisms; as well as promote the development of huge business projects.
Furthermore, to stimulate national production, he would continue adjusting and aligning the customs’ tariff book which has been strongly criticised by the private sector for being a hindrance to business.
The main opposition candidate, leader of the former rebel movement, Afonso Dhlakama, also promised more jobs to Mozambicans.
He criticised “high level”of corruption in the state apparatus and pledged overhaul the civil service.
The only opposition candidate who hardly mentioned employment was Carlos Reis, leader of the Social-Liberal Party (SOL), who has been campaigning for federalism.
However, the private sector was pleased with the emphasis on investment-driven job creation. “Fortunately, the two main candidates have spoken of changes and all speak of creating more jobs,” said Hamela. (SARDC)
