Now Reading
New Government’s Economic Measures: Most Are Good Ideas But There Are Management and Transparency Challenges

New Government’s Economic Measures: Most Are Good Ideas But There Are Management and Transparency Challenges

The reforms announced by Daniel Chapo include measures such as the privatisation of non-strategic public companies, the creation of the Mozambique Development Bank, the simplification of business licensing, tax reform, greater transparency in the management of natural resources with direct benefits for local communities, the fight against corruption through the creation of a State Procurement Centre, and the modernisation of the judicial system with the introduction of electronic bracelets for minor crimes. These proposals were generally well received, as they represent a visible effort to address some long-standing problems, with the intention of boosting the economy, strengthening public management and promoting sustainable development.

However, for economist Moisés Nhanombe, a professor at the Higher Polytechnic Institute of Gaza, while the economic reforms proposed by Mozambican President Daniel Chapo present significant benefits for Mozambican economic recovery, they face substantial challenges that could jeopardise their implementation. Among the risks highlighted are corruption, political and social resistance, and the state’s lack of technical and institutional capacity demonstrated in past initiatives of this kind.

Daniel Chapo takes office as the new Mozambican President

In an interview with Diário Económico this Thursday (16), Moisés Nhanombe began precisely with this point and praised the fact that measures such as the privatisation of public companies, the creation of the Development Bank of Mozambique and the simplification of business licensing can boost priority sectors such as health, education, agriculture and infrastructure. However, he emphasises that the implementation of these policies requires integrated strategies and effective supervision and transparency mechanisms.

According to Nhanombe, the main benefit of privatising and granting concessions to public companies is to reduce the financial burden on the state, allowing resources to be redirected to essential sectors. These measures, he pointed out, can improve efficiency and productivity in privatised companies, but they face important challenges.

There is political and social resistance due to the possible loss of jobs and services, as well as the need for a robust regulatory framework to avoid monopolies and guarantee the provision of essential services.

The economist also emphasised the importance of technically training the state to structure concessions in a transparent and effective way, warning that without the necessary preparation, the process could result in unsatisfactory consequences for the Mozambican economy and society.

Regarding the creation of the Development Bank of Mozambique, Nhanombe emphasised that the institution could play a crucial role in financing strategic projects, especially in sectors such as infrastructure, agriculture, tourism and manufacturing.

‘Institutional reforms should focus on transparency, tax simplification and strengthening public institutions, while international integration can be explored by making greater use of the free trade zone and seeking external financial and technical support’

Moisés Nhanombe – Economist

However, the economist warns of the risk of falling into practices of ‘mismanagement and corruption’, emphasising that the bank may face challenges in operating sustainably without aggravating public debt. According to Nhanombe’s analysis, ‘it is essential that there are independent supervision mechanisms’ and that financing is managed ‘with clear criteria of economic viability and social impact.’

The simplification of business licensing and the tax reform proposed in the President’s economic plan were praised by Nhanombe, who highlighted their potential to attract foreign investment and formalise the economy.

However, the economist drew attention to technical challenges, such as the lack of technical and administrative capacity to implement them. According to Nhanombe, there is also the risk of losing tax revenue in the short term, which must be balanced with other sources of revenue.

With regard to transparency in the management of natural resources, Moisés Nhanombe emphasised that public concessions and the payment of royalties to local communities can promote social justice and income redistribution. For the economist, this is a promising initiative, but it requires strict oversight mechanisms.

Nhanombe said that, if well implemented, transparency in the natural resources sector could attract reliable investors and improve Mozambique’s international reputation. However, the economist warned of the need to prevent the capture of resources by local elites or corrupt groups.

In the judicial sphere, Nhanombe considered the introduction of electronic bracelets for minor offences to be innovative. The economist emphasised that the measure could reduce prison overcrowding and maintenance costs, as well as promoting more efficient social reintegration.

For Nhanombe, the fight against organised crime and criminal networks is essential for strengthening public security and the rule of law, but these initiatives require investment in technology, training for agents and effective coordination between judicial and security institutions.

The proposal to create a State Procurement Centre was also assessed by Moisés Nhanombe as a necessary but challenging measure. According to the economist, it is crucial to guarantee independence and transparency in the management of this centre, but internal resistance from players who benefit from current practices could hinder its implementation.

Moisés Nhanombe – Economist

In order for the reforms to achieve their objectives, the economist recommended several concrete measures, including the promotion of public-private partnerships (PPPs) to attract investment in strategic sectors and reduce the pressure on public resources. Nhanombe also suggested training civil servants in areas such as concessions, monitoring natural resources and financial management, as well as digitising and automating bureaucratic processes to improve efficiency and reduce corruption.

See Also

The economist also emphasised the importance of exploring international integration, making better use of free trade zones and seeking external technical and financial support to strengthen public institutions and climate resilience. Moisés Nhanombe recommended the creation of performance indicators and regular evaluations of reforms to adjust policies and ensure their sustainability.

In the social sphere, Nhanombe suggested investing in technical education, creating programmes for vulnerable populations and creating jobs in strategic sectors. For the economist, political dialogue and the restoration of trust between civil society, trade unions and businesspeople are crucial to increasing the legitimacy of the reforms.

The reforms proposed by President Daniel Chapo represent an opportunity to transform Mozambican economy and improve the population’s well-being. However, as Moisés Nhanombe emphasised, the success of these measures depends on careful, transparent and inclusive implementation, with a focus on technical training, institutional strengthening and the involvement of society. For the economist, ‘the moment demands political courage and responsibility, but the foundations can be laid for a more prosperous and sustainable future’.

Text: Felisberto Ruco

SUBSCRIBE TO GET OUR NEWSLETTERS:

SUBSCRIBE TO GET OUR NEWSLETTERS:

Scroll To Top

We have detected that you are using AdBlock Plus or other adblocking software which is causing you to not be able to view 360 Mozambique in its entirety.

Please add www.360mozambique.com to your adblocker’s whitelist or disable it by refreshing afterwards so you can view the site.