UNCTAD's draft Investment Policy Review (IPR) of Mozambique proposes a strategy to increase and diversify foreign direct investment in the country, integrate it more closely into the local economy and enhance its contribution to sustainable development. At a national workshop organized in Maputo on 11 November, Amélia Nakhare, Vice Minister of Planning and Development, welcomed the report and expressed the Government's intention to use its recommendations to improve the country's investment environment.
The presentation of the draft report was followed by a rich discussion on the pivotal role of private sector development and on the need to move the reform process in Mozambique forward. Chairing the meeting, Lourenço Sambo, Director General of the Investment Promotion Centre (CPI), acknowledged the participants' call for strong political leadership in bringing about reform.
The IPR, undertaken at the request of the Government of Mozambique, is the first step of a programme of technical assistance that will help the country leverage foreign direct investment for inclusive growth and sustainable development. Additional support will follow, aimed at assisting the implementation of the recommendations of the report.
The IPR advocates further reforms and improvements in investment-related regulation, not only to make business operations easier (in particular for small- and medium-scale investors), but also to protect better the national interest, including through effective competition and adequate taxation of corporate profits. From a strategic perspective, the IPR encourages Mozambique to "look beyond mega-projects" in its efforts to attract foreign investors. Attention should be paid to matching the country's development needs with investment opportunities. In particular, the integration of foreign investors into the local economy should be a top priority, as should the attraction of labour-intensive projects given the dire need for job opportunities.
The IPR also suggests measures to maximize the impact of mega-projects and promote public-private partnerships (PPP) for infrastructure development. It advocates reforms to the recently adopted law on PPPs and mega-projects and warns about the potential pitfalls of dependency on the exploitation of natural resources.
Additional measures and institutional reforms are suggested to improve the effectiveness of investment promotion. These include stronger focus by the CPI on investment promotion, strengthened advocacy efforts and an improved public-private sector consultation mechanism.
The comments and feedback received from the Government and other stakeholders will enable UNCTAD to finalize the draft report. The final version of the IPR will be released in early 2012 and discussed during an intergovernmental peer review in Geneva.