Mozambican economist João Mosca drew a bleak picture of the country’s economy, highlighting the difficulties in creating an encouraging business environment, but also pointing out the many opportunities that Mozambique offers to investors.
“A stable economic policy is needed. There are essential imbalances and investments need to be made less vulnerable,” said the economist on Tuesday during his speech ‘Mozambique: Between the financial crisis and a new economy’ at the AIP Foundation conference cycle on ‘Lusophone Africa: The Prospect in View’,
“The professor ended up giving us many reasons not to invest in Mozambique,” one businessperson who attended the debate said, summarizing the Mozambican economist’s speech.
João Mosca explains his pessimism.
“It is difficult for me to make a very optimistic speech because conditions do not allow it. I am a serious person – I do not do optimism management. But I am reasonably hopeful –there are good things to come and the future could be very good, because Mozambique has potential. The current government is very receptive to investment and Mozambican society is very plural in political, religious, ethnic and social terms.”
But Mosca continues to list the main risks for foreign investors, from poor public services to the difficulties in accessing credit, “corruption at all levels” and a “fragile and inefficient state, with a strong centralization of decisions in the central organs”.
“There is macroeconomic instability, public policies are often inconsistent and public services are not efficient,” he said.
“There is the possibility of political and social conflicts, and citizens’ lives are subsidized to the tune of 40 percent. There is fictitious management at the central bank, which supports the metical to avoid inflation and protect imports,” Mosca, maintains.
And civil society is becoming stronger. Mosca cites the Prosavana project, an agricultural megaprogram financed by Brazil and Japan in the provinces of northern and central Mozambique.
The objective of this project is to convert subsistence agriculture into market production.
“The Prosavana project was paralyzed because of criticism and by social networks, which do not exist in Angola and are becoming increasingly active and influential,” he concluded.
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