During the formal presentation of the Investment Policy Review (IPR), Amélia Nakhare, Deputy Minister of Planning and Development of Mozambique, told the Commission that the review was vital, given the country's current economic context. The IPR recommendations, she stressed, would be instrumental in improving the country's business environment and in attracting more private investment to accelerate social and economic development.
A final draft of the IPR had been discussed previously at a workshop held in Mozambique with Government officials and private-sector representatives.
James Zhan, Director of UNCTAD's Division on Investment and Enterprise, told the Commission that the IPR identified a number of areas that needed to be addressed if Mozambique was to attract investment beyond "mega-projects".
The review suggests targeting foreign direct investment (FDI) that can match Mozambique's needs to generate employment and to diversify its economy into sectors where the country has a competitive advantage. In this regard, it recommends reforming the country's investment laws to place all investors on an equal footing. This particularly needs to cover small and medium-sized enterprises, both domestic and foreign, which are affected the most by heavy regulatory requirements and licensing procedures. In addition, the review calls for increased flexibility in foreign-exchange transfers, and for a reform of fiscal policies which currently favour mega-projects. Furthermore, it recommends steps to foster fair competition, to facilitate access to land, and to enhance the skills of the Mozambican workforce.
The IPR counsels the Government to take measures to maximize the impact of the mega-projects that it has undertaken, and to leverage public-private partnerships for infrastructure development. Finally, it urges strengthening of the country's investment promotion institutions, and says that public-private dialogue on investment issues should be reinforced.
Political stability, structural reforms and an opening to the global economy have generated robust growth since Mozambique emerged from civil war. The commencement of large-scale industrial projects via FDI in the mid-1990s sent a strong signal to the international investment community that Mozambique was "open for business", the IPR notes. FDI inflows have increased steadily since then. However, the review finds that the FDI attracted so far has had a limited impact in terms of helping the country to achieve its development goals - which are chiefly the fostering of formal job creation, business linkages and technology transfers. To overcome these limitations, UNCTAD recommends adopting an investment strategy that looks beyond "mega-projects".
Representatives of the international community participating in the discussion on the IPR were optimistic about Mozambique's potential to attract investment, but stressed the need to improve investment regulations and national infrastructure if the country wants to attract greater and more diversified investment flows.
UNCTAD produces IPRs at the request of developing countries; 35 such reviews have so far been carried out.
Following the meeting, UNCTAD hosted a business networking dinner in collaboration with the Swiss-African Business Circle. The dinner provided an opportunity for international investors to discuss the potential of the Mozambican market directly with the Government delegation.