Mozambique’s Local Content Association considers the creation of a specific law on local content to be premature, claiming that the country still doesn’t have enough experience in the field of natural resource exploitation.
The position was defended by Elthon Chemane, president of the association, during a seminar held at the Maputo International Fair (FACIM), where he warned that hasty legislation could be used against national interests.
Chemane emphasised that creating a law at this time would be risky, as its application would depend on a still limited understanding of the issue at a domestic level. According to him, the lack of clarity and the subjectivity of the legal provisions could allow multinationals to use the law unfavourably for Mozambique.
Compared to other countries, Chemane pointed to the example of Angola, which has revised its local content law eleven times without achieving the desired progress.
On the other hand, Brazil, which does not have a specific law, has made significant progress in the management of its natural resources. This comparison reinforces the thesis that the existence of a local content law is not decisive for a country’s development.
The association’s president argued that the discussion on local content should begin with the signing of contracts with multinationals, which in Mozambican President’s case are concessions and not production sharing contracts.
This means that the risk of the investment is not shared, and it is necessary to carefully evaluate the demands made of foreign companies.
Chemane also mentioned that many Mozambican companies do not have the capacity to fulfil the demands of multinational companies that operate with high capital.
A law that obliges multinationals to use a high percentage of national companies, such as 50 or 75 per cent, could result in situations where they are unable to respond, causing potential losses.
The association suggests that the development of the local content industry should involve not only the government and the private sector, but also investors.
Chemane proposed that the government select a credible and experienced body capable of contributing effectively to the formulation of local content policies.
He concluded that, at the moment, Mozambique would benefit more from a ministerial policy or strategic guidelines rather than a formal law. The creation of a specific law could be useful in the future, when the country has gained more experience in managing its natural resources and interacting with multinationals.
