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Wednesday, 08 December 2010

African Industrialization Day 2010 marked in Mozambique

MAPUTO, 8 December 2010 – To mark Africa Industrialization Day in Mozambique and discuss the challenges of the industry in the country the UNIDO team joined forces with the Institute for Social and Economic Studies (IESE) and the Industrial Association (AIMO).

IESE has published several studies about the constraints faced by the industry in Mozambique and the impacts of the so called “mega-projects” in the local economy, and AIMO is currently leading discussions and actions to make the local industry more competitive.

A joint seminar, titled “Challenges to industrialization in Mozambique” and held on 7 December, brought together some 120 Government officials and decision-makers, industrialists, academics, students, the general public and media. 

The seminar’s panel discussion was lead by the Head of UNIDO Operations in Mozambique, Jaime Comiche; the former Minister of Finance, Abdul Magid Osman; the Director of IESE, Carlos Nuno Castel-Branco; the Chair of AIMO, Carlos Simbine;  and a senior researcher at the Witwatersrand University - School of Economic and Business Sciences, Nicolas Pon-Vignon. 

Carlos Nuno Castel-Branco said that industrialization should not be regarded as sector specific, but as a continuous construction, cumulative and dynamic of primacy and dominance of a way of organizing the economy and the society, the production and productive relationships, capacities, resources and transactions. Mozambique’s economy, he said, relied on the mining industry exporting non-processed commodities and importing processed goods. As a consequence, the country’s economy does not generate any spin-off and does not feed itself.

He said the main challenges for Mozambique’s industry were linking accumulation, production and distribution; the adequate use of mineral resources; the reduction of macro-economic vulnerability; the reduction of dependency (public and private) from external aid; and dynamics of regional competition and integration.

Carlos Simbine said that the current industry in Mozambique could be characterized by a manufacturing sector which in the last five years represented about 14 per cent of the country’s GDP; by an accumulating investment in the local industry, excluding the so-called mega-projects, represented only 4 per cent of investments in the economy, during the same period; expensive raw materials; lack of quality assurance; low qualification labor and by obsolete technologies.

The way forward, according to him, was to develop fiscal and financial incentives to modernize manufacturing medium and small businesses; enhance linkages with foreign direct investments (FDI); enhance funding allocating to technical, vocational and engineering training; and greater investment in natural resource-based value chains.

Nicolas Pon-Vignon said that foreign direct investment was not a panacea for industrial development and that the two main approaches (“invest where we tell you vs. invest where you want”) may lead to divergent economic performances. In weak policy environments FDI tends to escape tax, prevent technological spillovers and disregard hiring and training of local staff.

In 1989, the UN General Assembly proclaimed 20 November Africa Industrialization Day. African countries can reflect on this Day on the progress made towards achieving strategic and sustainable industrial development.

The seminar was mostly conducted in Portuguese. More information on the event and presentations by key speakers, can be found at:  http://www.iese.ac.mz