The Confederation of Economic Associations (CTA) warned that concentrating rice and wheat imports under the Mozambican Cereals Institute (ICM) will jeopardize investments exceeding USD 500 million, as well as potentially lead to the loss of 30,000 jobs.
“The measures in question put at risk more than 10,000 direct jobs and over 20,000 indirect jobs, potentially causing the breach of already signed international contracts, direct and non-compensable financial losses, a reduction in private investment, and, as a consequence, weakening the State’s fiscal base,” the association stated in a letter sent to the Ministry of Economy.
In the document, published by Lusa, the private sector highlighted that private operators have already invested more than USD 500 million, arguing that replacing entrepreneurs with a centralized model jeopardizes existing investments, devalues industrial and intellectual property assets, and undermines consumer confidence.
The business community also pointed out the “structural insufficiency in national rice production, which is currently unable to meet domestic demand in terms of volume, diversity, and regularity,” emphasizing that a change to the current model would require 300 hectares suitable for rice production, including irrigation systems, and 30 processing units with an installed capacity of around 1.5 million tons.
According to the CTA, this quantity would be needed to meet the annual consumption of about 700,000 tons of rice, whereas national production currently stands at around 80,000 tons. “Regarding wheat, Mozambique is entirely dependent on imports, with no significant local production. In this context, any disruption in the import chain would pose a high risk to the regular supply of foodstuffs, directly impacting the cost of living.”
Last week, through a Ministerial Decree, the government announced that it will henceforth import cereals “exclusively,” with particular focus on rice and wheat, through the ICM. The measure aims to curb illegal foreign exchange outflows, ensure market supply, and stabilize domestic prices for these essential products.
In this regard, the private sector warned that “excessive restrictions and centralization can create incentives for smuggling, informality, cartelization, and systemic corruption. This approach does not guarantee an actual increase in national production, nor is it an appropriate tool of exchange rate policy; it could eliminate competition, cause additional costs, and increase vulnerability in supply and price rises.”
The letter emphasized that granting the mandate to the ICM occurs without legal clarity, operational capacity, or a proper regulatory framework, creating a high risk of litigation, regulatory uncertainty, and loss of confidence among national and private investors.
“The decision to assign the mandate to the ICM was made without prior consultation and engagement with the private sector, a procedure that contravenes good economic governance practices, regulatory predictability, and the principles of public-private consultation,” it concluded.
Source: Diário Económico
