The outgoing Representative of the African Development Bank (AfDB), Pietro Toigo, believes that private companies in the country lack robustness, a fact that makes it difficult for them to access a higher type of financing.
In an interview to the newspaper “Noticias”, on the balance of his four years as the head of that financial institution in Mozambique, Toigo believes that the constraints of the private sector are related to its fragmentation and the fact that it is very small.
“The companies that consider themselves large are actually small and medium-sized, and this restricts a little the ability of entrepreneurship to access a certain type of more comprehensive financing. Agriculture is based a little bit on informality and interpersonal relationships and that also restricts a little bit the ability to invest in the sector,” Pietro Toigo explained.
According to the outgoing ADB Representative in Mozambique, the private sector lacks the capacity to make strong and sustainable connections between Small and Medium Enterprises (SMEs) and mega-projects, which will be a major challenge. And to overcome these problems, the source stressed that the institution he heads has several projects to support SMEs in the country, such as those working along the Nacala Corridor to make stronger use of this logistics platform.
As for the business environment, Toigo said there are gains, although occasional reforms are still needed. “Historically, the country has a predominance of the public sector over private and a level of bureaucracy that can often stifle the private sector,” Toigo said.
However, drawing on “Doing Business,” the source said there are interesting considerations in the report in the different provinces. He said that in some, you can see indicators that they perform much better in some provinces compared to other provinces.
