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Questions on Productive Development in Mozambique

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Questions on Productive Development in Mozambique Questions on productive development in Mozambique Carlos Nuno Castel-Branco, Nelsa Massingue & Carlos Muianga (editors) IESE Questions on productive development in Mozambique Carlos Nuno Castel-Branco, Nelsa Massingue and Carlos Muianga (editors) Questions on productive development in Mozambique BACKGROUND PAPERS FOR THE DANIDA PROJECT, ‘ADVOCACY AND RESEARCH FOR PRIVAte-secTOR BUSINESS DEVELOPMENT programme’ (PSBDP 2011–2015), COORDINATED BY THE BUSINESS ENVIRONMENT Fund (FAN) Carlos Nuno Castel-Branco, Nelsa Massingue and Carlos Muianga (editors) www.iese.ac.mz Títle Questions on productive development in Mozambique Editors Carlos Nuno Castel-Branco, Nelsa Massingue and Carlos Muianga Design and layout COMPRESS.dsl Proofreading COMPRESS.dsl Printing and finishing Compress.dsl Register No. 8378/RLINLD/2015 ISBN 978–989–8464–25–5 Print run 500 Editor’s address Av. Tomás Nduda 1375 Maputo Mozambique September 2015 ACKNOWLEDGEMENTS This collection is a result of collaboration between the Institute for Social and Economic Studies (IESE) and the Business Environment Fund (FAN) and aims to transform the results of the research that has been carried out by the IESE in order to promote public-policy debate related to the development of productive capacities and business in Mozambique. The editiors of this collection would like to thank the authors of the papers and the FAN team and its partners for their valuable and critical contributions and for the suggestions. Acknowledgement is also extended to business associations, the Confederation of Business Associations (CTA), unions, the media, and all who contributed to the production and diffusion of, and debate on, the selected topics. In particular, we would like to thank the following IESE partners for their continuing institutional support: the Swiss Agency for Development and Cooperation (SDC), the Royal Danish Embassy, the Ministry for Foreign Affairs of Finland, the Irish Department of Foreign Affairs (Irish Cooperation), IBIS Mozambique, and the Embassy of Sweden. Furthermore, this collaboration project was undertaken with the financial assistance of FAN. 1 TABLE OF CONTENTS List of figures, tables and maps 3 Author biographies 5 Introduction 9 PART 1: STRUCTURAL QUESTIONS ON PRODUCTIVE DEVELOPMENT 11 Business and productive capacity development in economic growth and industrialisation Carlos Nuno Castel-Branco 13 Questions concerning development of the productive base in PARP: Implications for strategies to develop the national business class Carlos Muianga 38 Challenges of financing the private sector in Mozambique – reflection on the implications of the resort to domestic public securities debt for financing the state Fernanda Massarongo 49 Linkages between large foreign investment projects and local suppliers: The promise of development Epifânia Langa & Oksana Mandlate 59 PART 2: TRENDS AND REFLECTIONS ON PRIVATE INVESTMENT 79 Private investment trends in Mozambique: Questions for reflection Nelsa Massingue 81 Chinese investment in Mozambique: Characteristics and trends Sérgio Chichava 96 PART 3: RURAL DEVELOPMENT AND INDUSTRIALISATION 111 Challenges of rural development in Mozambique: Critical contribution with debate on basic postulates Carlos Nuno Castel-Branco 113 Regadio do Baixo Limpopo (Xai-Xai, Gaza): Awakening a ‘sleeping giant’? Ana Sofia Ganho 148 Opportunities and constraints in respect of agriculture in Regadio do Chókwè Ana Sofia Ganho & Phil Woodhouse 173 The rise of tobacco agriculture in Mozambique: Questions and challenges for a transforming sector Helena Perez-Niño 202 Women processing cashew nut: Reflections on work, investment and gender in the province of Cabo Delgado Sara Stevano 232 2 Informal savings and loans groups: Opportunity for expansion of business for the private sector in Mozambique? Analysis based on a case study of Inhambane and Manica provinces Fernanda Massarongo, Nelsa Massingue, Rosimina Ali & Yasfir Ibraimo 251 The road ahead: The development and prospects of the road freight sector in Mozambique – a case study on the Beira Corridor Helena Perez-Niño 269 The differentiated impact of the expansion of sugar production on the well-being of agricultural workers and communities: The case of Xinavane and Magude Yasfir Ibraimo 290 Rural labour markets (RLMs): Why are they neglected and what are the implications for the productive structure in Mozambique? Rosimina Ali 308 PART 4: PUBLIC SERVICES AND DEVELOPMENT OF PRODUCTIVE CAPACITIES 323 The private sector in the context of reforms in the agriculture sector in Mozambique: An analysis based on local experiences Salvador Forquilha 325 Governance and public services at district level: The involvement of the private sector Salvador Forquilha 340 Businesses in ‘penury’. The problematic of the emergence and involvement of the local private sector in the provision of public services: The case of Nacala district Domingos do Rosário 351 Inharrime by its roads: Notes on decentralisation and public services in a district in Inhambane province Euclides Gonçalves 368 Other IESE Publications 383 3 LIST OF FIGURES, TABLES & MAPS List of figures Paper 3 Figure 1: Stock of DPIM in millions of Meticais and as a percentage of GDP and as percentage of public revenues Figure 2: Evolution of interest rates charged by commercial banks and of the reference rates (April 2010–January 2013) Paper 4 Figure 1: Evolution of the volume of business of Company J Figure 2: Evolution of the volume of business of Company K Figure 3: Concentration of business volume in companies linked to Mozal Figure 4: Evolution of the business volume of Company A, 2001–2007 Figure 5: Composition of the client portfolio of Company B, 2000–2011 Paper 5 Figure 1: Total private investment approved – by source, 1990–2011 Figure 2(a): Total private investment approved by province, 1990–2011 (as a % of total investment approved) Figure 2(b): Private investment approved by source and by province, 1990–2011 Figure 3(a): Total private investment approved by sector ,1990–2011 (as a % of total private investment) Figure 3(b): Private investment approved by sector and source, 1990–2011 (in %) Figure 4: Total private investment approved with and without mega-projects (1990–2011) Figure 5(a): Private investment in Mozambique without mega-projects, 1990–2011 Figure 5(b): Weight of investment by source with and without mega-projects, 1990–2011 Figure 5(c): Weight of investment by sectors of activity with and without mega-projects, 1990–2011 Figure 6(a): Exports with and without mega-projects, in percentages Figure 6(b): Imports with and without mega-projects, in percentages Paper 6 Figure 1: Chinese FDI by sector (2000–2010) Figure 2: Employment generated by Chinese FDI (2000–2010) Figure 3: Chinese FDI by province (2000–2010) Figure 4: Employment per province generated by Chinese FDI (2000–2010) Paper 10 Figure 1: Tobacco production, 1979–2011 (in tonnes) Figure 2: Tobacco – value of exports by country, 1990–2011 (1 000 US$) Figure 3: Tobacco – area under cultivation by province (ha) Figure 4: Plot of mean tobacco export value per ha for the harvest years 2007–2011 Paper 11 Figure 1: Women employed by sector: Trade, Hospitality and Cashew Paper 12 Figure 1: Cash flow of a group in Manica – example of how SLG cash flows work Paper 13 Figure 1: Volume of containers handled at the Port of Beira Figure 2: Volume of general bulk cargo handled at the Port of Beira Figure 3: Container traffic in the Port of Beira, by country Figure 4: Volume of general cargo handled in the Port of Beira, by country Paper 14 Figure 1: Evolution of the workforce in AdX, by sex and category – January 2005 to July 2012 Figure 2: Number of permanent and casual workers in AdX – April 2011 to March 2012 Figure 3: Percentage of agricultural workers by pay scale (A, B & C) – January 2010 to May 2012 Paper 15 Figure 1: Percentage distribution of the EAP by occupational situation in rural areas of Mozambique Figure 2: Percentage distribution of the EAP by occupational situation in the rural areas of Mozambique – 2007 census Figure 3: Recruitment of wage labour by small and medium farm holdings (SMFs) in Mozambique – TIA 2005 and TIA 2008 Paper 16 Figure 1: Typical structure of the district government Figure 2: Contribution of the agricultural sector to GDP Figure 3: The cassava business in Namigonha locality – from the producers to the brewery of Cervejas de Moçambique 4 List of tables Paper 3 Table 1: Weight of DPIM in total savings Table 2: Domestic public debt stock during the period when the Bank of Mozambique cut the reference interest rates Table 3: Comparison between interest paid on the domestic public debt and expenditure on priority sectors Paper 4 Table 1: Concentration of production in the main subsectors of the manufacturing industry Table 2: Sectors of activity of the companies in the sample Table 3: Orientation of companies to other mega-projects Table 4: Pattern of concentration of business volume in companies A, B, O and P Table 5: Diversification of clients in companies A, B, O and P Table 6: Patterns of diversification within companies A, B, O and P Table 7: Pattern of diversification of activities by means of capital in companies A, B and O Paper 5 Table 1: Investment approved in agriculture and agro-industry, and in mineral resources and energy Table 2: Mega-projects approved in Mozambique in the 1990–2011 period Table 3: Analysis of the 2006–2011 period Paper 6 Table 1: Number of projected jobs created by investment in approved projects Paper 8 Table 1: List of
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