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MEF: “Manufacturing Industry Has Stagnated Over the Last Decade and Is Showing Signs of Decline in Several Areas”

MEF: “Manufacturing Industry Has Stagnated Over the Last Decade and Is Showing Signs of Decline in Several Areas”

The national manufacturing industry, which continues to play a key role in Mozambique’s economic growth, has stagnated over the past ten years, with signs of decline in several aspects.

This is the conclusion of a recent report on the national manufacturing industry, released by the Ministry of Economy and Finance (MEF) and its partners, which aims to document the evolution of companies in the manufacturing sector over the past decade.

Entitled “Survey of Mozambican Manufacturing Industries (IIM-2022), the study covered the main urban areas of seven provinces, namely Maputo city, Maputo province, Gaza, Sofala, Manica, Tete and Nampula.

As one of the reasons for the phenomenon, the report, cited by the Mozambican Information Agency (AIM), points out that 68% of companies requesting bank financing have difficulties in accessing credit, and an average interest rate considered to be one of the highest on the continent.

The authors of the document reached this conclusion based on the assessment of the investment climate and the market mix, instruments used in economic analyses.

To this end, the study draws the attention of the Executive on the need to renew policies that support economic growth, looking at the manufacturing industry as a real engine of development.

“The sector has had significant difficulties in progressing as desired and in contributing to the much needed economic transformation, industrialisation and development in Mozambique. There is no significant evidence of industrialisation, despite the long-term focus on supporting industrial enterprises,” the document reads.

The report also states that between 2012 and 2022, the number of companies contributing to the national social security system through the National Social Security Institute (INSS) remained stagnant.

Further on, the document also considers that the number of companies operating in the manufacturing sector has also reduced, since of the 831 companies interviewed in 2012, only 355 were still in operation in 2022, “which means that the remainder ceased to operate, that is, closed their business”.

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As a solution to revitalising the manufacturing industry, the survey proposes reducing the number and costs of licences and inspections required for businesses, deepening value chains that will allow for specialisation and cooperation of businesses to increase productivity, improving linkages to international value chains, and understanding why the supply of finance for private sector activities is slower to react to growing demand for credit.


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