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DECENT Work, a Recipe for Growth a Market SYSTEM Analysis Of MARKET SYSTEMS DEVELOPMENT FOR DECENT WORK MARKET SYSTEMS DEVELOPMENT FOR DECENT WORK DECENT WORK, MOZTRABALHA With support from the Govern- ment of Sweden, the ILO imple- A RECIPE FOR GROWTH ments the MozTrabalha project, which seeks to create and im- A MARKET SYSTEM ANALYSIS prove employment outcomes in both urban and rural areas, by OF THE RESTAURANTS AND focusing on the implementa- tion of employment-intensive CATERING SECTOR infrastructure investments and green enterprise solutions, and IN MOZAMBIQUE by creating opportunities to ac- cess productive employment May 2018 for women and female-headed households. The project pursues a market systems development approach as the unifying framework. The application of this methodology has been supported by ILO’s project The Lab. This paper summarises the find- ings of the market system analy- sis of tourism restaurant and catering sector in Mozambique. To request the full report please contact: [email protected] I. DECENT JOB OPPORTUNITIES Between 2006 and 2014, 47% of direct investments in Maputo were implemented in the tourism industry and 34% of new jobs were provided by this sector. In Mozambique, the hotel, restaurants and retail trade The province is also home to around 24,000 tourism sectors are increasingly recognized as a major source workers, which represent 40% of all jobs in the sector. of economic growth and potential employment. Re- cent forecasts in particular related to tourism growth In the Northern region, Cabo Delgado offers a differ- and the liquefied natural gas (LNG) boom present ent though positive scenario for the development of opportunities to create jobs and enterprises that can restaurants and catering services. This originates in cater to the increasing number of clients arriving in the gas and oil developments which forecast the es- Mozambique. tablishment of large campsites for thousands of work- ers in the industry. This scenario will bring about op- Maputo, the main gateway to the country, has the portunities to offer and develop catering services, as largest concentration of business and leisure tourism, well as business tourism products. which offer great potential for the development of food establishments and products that can comple- Lastly, the Inhambane province, as one of the most ment the offer of this important tourist destination. prominent tourist destinations in the country, offers a 1 solid local production through which small-scale pro- ducers sell to traders and businesses caterings. How- ever, the country still faces significant challenges to reap the benefits of new investments for the benefit of the local workforce and enterprises. II. THE TOURISM BUSINESS COSTS RESTAURANTS 3 .5 5 Labour costs 1 AND CATERING Sales and marketing expenses 2 4 . 2 SECTOR Food and beverage 8 Supplies 6 8 , The sector of hotels and restaurants 0 Rent 3 contributed to 2.4% of the coun- 8 . Utilities 3 try’s GDP in 2015, thus decreasing Repairs and maintenance its participation in comparison with Induced corporate social 6 1 , 2010 . However, in output terms, 0 responsability costs 1 the total contributions of hotels and 2 Other expenses 7 2, 3, restaurants are constantly growing in 18 1,6 the last ten years and are expected 8 to increase in the upcoming decade2. 12,20 Regarding employment, while the ag- ricultural sector is still the dominant employment provider in the country, Figure 1. Tourism business costs (source: SPEED Program 2014) the total contributions of tourism and travel to employment in 2017 constituted 7.9% of employment and tourist arrivals, was owed to per- total employment (770,000 jobs). For 2018, this is ceptions among tourists of insecurity due to political expected to rise by 6.1%3. In the past, the tourism risks, as well as to an underperforming South African sector’s poor underperformance, in terms of direct economy4. Nevertheless, the sector is expected to re- cover in the upcoming years, in part due to the reactivation NORTH CENTER SOUTH of gas and oil megaprojects. • Cabo Delgado, Nampula • Sofala, Manica, Tete and • Maputo, Gaza and A handful of variables deter- and Niassa Provinces, Zam-bezia Provinces. Inhambane Provinces. mines the profitability of tour- also called ‘the Jewel of • Rich in natural resources, • National and regional ism in Mozambique: labour Tourism”. wildlife conservation destination for sun and productivity and costs, costs of • Destination for inter- and preservation, exotic beach holidays, and for national, national and animals. business and leisure tour- imported inputs (primarily food regional markets. • Destination for adventure ism. and beverages), and efficiency • Tourism mainly con- tourism and ecotourism. • Concentrates almost 50% in the movement of visitors. centrated in Nampula, • Destination for business of the national tourism Nacala and Pemba cities. (Beira city, which is the (over 50% of the total An analysis of the tourism • Rich in natural resources, second largest city in registered businesses in industry in 2014 identified tropical islands and Mozambique and impor- tourism are here). beaches, and large tant regional economic • Tourist infrastructure ‘food and beverages’ as one ecotourism development centre), but also for sand is accessible and more of the major costs of tourism, opportunities. and sea. developed in this area. greatly due to their high costs. • Growing interest by inves- • Destination targeted by • Most of the restaurant In Mozambique, 70% of food tors in new project infra- domestic and regional and catering activities are structures such as hotels, markets. also concentrated in the and beverages are imported. hostels and campsites. Maputo area. In some tourist destinations • Poor culinary and like Cabo Delgado, this figure gastronomy development rises to more than 90%. This targeting tourists. indicates the need to develop locally-produced and cost-ef- Figure 2. Main tourist zones in Mozambique and characteristics 1 African Economic Outlook (2018), Mozambique profile 2 WTTC (2018) 3 WTTC (March 2018), The Economic Impact of Travel and Tourism March 2018, Mozambique 2018 Annual Research Key Facts 4 Deloitte (2016). Mozambique’s Economic Outlook. 2 fective sources of food for businesses in Mozambique. Nonetheless, the vast majority of the supply chains of locally produced fruits and vegetables are inefficiently developed mainly due to weak commercial links. La- bour is still the primary cost, representing 24% of the total tourism business costs in Mozambique. Tourist zones are usually subdivided into three: north, centre, and south, in which several major tourist des- tinations are located. Each of these presents different geographical, and socioeconomic development pro- files, which define the conditions under which restau- rants and catering services may or not develop. The following table provides a description of their most distinctive characteristics. Regarding the restaurants and catering services value chain, the following figure allows a general visualiza- tion of the goods, services and businesses from food production until the final sale. Using a demand and supply perspective, the next section provides a de- tailed description of the types of businesses involved in the supply of goods and services, current and po- tential demand, as well as its implications on the la- bour market. PRODUCTION & SOURCING SERVICE PROVISION SALES PRODUCTION PROCUREMENT PREPARATION, MARKET AND & PROCESSING & TRADING PROVISION F&B CLIENTS AGRO PRODUCTS TRANSPORT RESTAURANTS RESIDENTS & HOTEL MEATS&POULTRY STORAGE INTL TOURISTS & PACKAGING SNACK BARS BEVERAGES DOMESTIC TOURISTS SMALL SCALE COFFEE SHOPS SEA PRODUCTS TRADERS BARS EVENTS TRADITIONAL WHOLESALERS LOCAL FOOD & RETAILERS CATERING OIL & GAS BUSINESS PRESENCE OF PRESENCE WOMEN (FRESH PRESENCE OF WOMEN FRUITS AND OF WOMEN CATERING VEGETABLES) BUSINESS (LARGE;MOSTLY FOREIGN) 70% OF FOOD & BEVERAGE IMPORTED Figure 3. The restaurants and catering services value chain 3 A) MARKET DEMAND B) MARKET SUPPLY Mozambique has a great potential for catering and The formal tourism sector is served by a total of 6,675 restaurants as they are under permanent local market business units in Mozambique6. This includes ac- demand. The market for these services and products commodation, restaurants, catering businesses, casi- is mainly domestic (residents) in urban areas (90% nos, and coffee shops. Out of these, 1,752 business of the demand), and to a lesser extent by the tourism units in restaurants and catering are represented by market (10%)5. However, in leisure tourism destina- SINTIHOTS. Of these units, 75% correspond to small tions the demand basis changes for residents (20%) businesses, 20% to medium and 5% to large. and tourists (80%). In general, local small-scale processing units and busi- nesses do not meet basic standard requirements. As RESTAURANTS, BARS & CAFES CATERING a result, only the large ones, dominated by foreign invest- RESIDENTS TOURISTS EVENTS OIL & GAS ments, are used as suppliers by the catering industry. Cabo • 90% of demand • 10% of demand • Local and busi- • Catering services Delgado has several formal in urban areas in urban areas ness events for workers of oil (both domestic and foreign) • 20% of demand • 80% of demand • Small, medium & gas companies in leisure tourism in leisure tourism and large compa- • Large and foreign suppliers; however, most of destinations destinations nies are present companies domi- the products and inputs for • Usual channels: nate this market catering businesses related in accomoda-
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