Govt advised not to count its chickens

Mozambique needs to develop and invest in domestic business before attempting to boost expansion by running a 'Buy Mozambique' campaign, say economists.

Financial analyst Silvestre Filipe Jnr, of the Mozambique Debt Group, a local civil society coalition, told IRIN that although he supported the campaign, it was premature and non-specific. "We don't yet have the capacity to supply the national goods on the scale that is demanded - our industrial sector is very weak to be competitive with those prices abroad."

He said the government should invest in a particular sector to make it globally competitive before promoting it. "We are a rural economy - there is no huge investment in agribusiness," he pointed out.

Concerned over low consumption of local produce, the Mozambican government launched its campaign in January this year.

Joseph Hanlon, a senior lecturer in development policy and practice at the London-based Open University, also highlighted the lack of long-term technical and financial assistance for developing agribusinesses, which could help clear land, build dams, plant trees, do research into developing appropriate crops and create business-support structures.

A recent survey commissioned by the International Finance Corporation (IFC), the private-sector funding arm of the World Bank, said the greatest barrier to commercial development was the high cost and lack of access to credit, with businesses reporting that 90 percent of working capital and nearly two-thirds of investment were financed out of their own funds. High interest rates and prohibitive collateral requirements were also cited as major problems.

"Our people are very poor - we can't ask them to act like patriots and buy chickens, for example, that are more expensive," said Filipe. He suggested the government should rather lead by example by buying locally produced goods, such as chickens, from local farmers.

Small agriculturally based businesses, like those promoted by the General Union of Cooperatives of Maputo (UGC), founded by poor women during the worst years the Mozambican civil war, could do with some support in the face of stiff competition from cheaper imports.

Elena Almeida, 42, a single mother of four children, has run a small-scale poultry farm since her husband left her 12 years ago and is one of the women the UGC has helped to become economically independent. She had not heard of the campaign, but commented, "People want to buy goods from abroad because they are cheaper, and they think the quality is better."

Over the past ten years her chicken sales have given her economic independence. Using some of her average monthly profit of around four million Meticais (about US$148) - well above the minimum wage of less than $50 - she has been able to build a four-roomed house in the semi-rural suburb of Mahotas, a 30-minute drive from the capital, Maputo. Besides her home and a production shed housing 750 chickens, she also has a lush vegetable garden and mango, papaya and orange trees.

Last year, after imported Brazilian chickens were selling for about 35,000 Meticais - half the price of local ones - the market slumped. There was an outcry from UGC, whose membership of around 180 cooperatives had produced 2.8 million chickens. Fernando Domingoes, director of UGC, said the Brazilian chicken had been undervalued to reduce import duty.

The authorities have since clamped down and more stringent import taxes have been enforced to protect local production. "Now, the problem is a lot to do with the mentality of the people," said Domingoes. "I am a vet by profession - I know our chickens are fresher, more nutritive and tastier than the Brazilian chickens, but people think quality produce only comes from outside the country. They look at the packaging rather than the product inside."

The 'Buy Mozambique' campaign was critical, he added, particularly since the Southern African Development Community has been reducing tariff barriers and all local produce in Southern Africa would eventually have to compete regionally.

Almeida conceded that she needed financial support to help make her poultry business more competitive. "I have so many dreams - I do not have my own transport to take the chickens to market, for example."

As much as 75 percent of the population depended on small-scale farming, and the government would have to invest in agriculture, Filipe commented. "I am not sure that at this rate Mozambique will have the capacity to compete in the regional market."