Vienna/Maputo, 8 May 2008 - An agreement to initiate a European Commission - funded Euro 6.65 million project to promote export - led growth and to improve the investment climate in Mozambique was signed at the Ministry of Foreign Affairs and Cooperation in Maputo on 8 May 2008. The project, scheduled to run for two and a half years will be jointly implemented by UNIDO, ITC and UNCTAD. UNIDO is contributing US$ 900,000 to the joint programme.
The agreement was signed by (pictured left, from left to right) the Head of the Mozambique Delegation of the European Commission Glauco Calzuola; Head of the UNIDO Regional Office, Stefano Bologna; and Mozambique's National Authorizing Officer of the European Development Fund, Henrique Banze.
To reach the overall goal of promoting export-led growth and improving the investment climate, the project will focus on three clusters of activity that broadly define the areas of intervention of each of the partners: The Quality Promotion cluster, to be implemented by UNIDO, will strengthen the National Quality Institute - INNOQ (in its task of providing quality services in the fields of metrology, standardization and certification); the Trade Information cluster, to be implemented by ITC, will strengthen the Institute for Export Promotion- IPEX in its task of advising exporters and investors on availability, access and quality of services; the Facilitation of Trade cluster, to be implemented by UNCTAD, will strengthen the capacity of the Mozambique Customs Service to reduce the time and cost of import and export operations.
The type of assistance to be provided by the project was determined by the Diagnostic Trade Integration Study (DTIS) for Mozambique carried out under the Integrated Framework (IF) initiative.
The project also addresses the constraints identified in the World Bank's Doing Business Report for Mozambique (See http://www.doingbusiness.org/). The 2008 report ranks Mozambique 134th in the world (out of 178 countries) for ease of doing business, placing the country in the region of a “high cost economy”. The foreign trade (trading across borders) ranking is 140. Mozambique still needs on average 27 days for clearing a typical export operation (38 for a mean import operation), and the average cost of a container for a typical export operation is as high as US$ 1,155 (US$ 1,185 for a mean import operation). Mozambique has some way to go to catch up with one of the best performers of the SADC region – Mauritius – which ranks 27th in "ease of doing business" and 17th in foreign trade (trading across borders). The average number of days to clear a typical export operation in Mauritius is 17 (16 for an import). The average cost of a container for export is US$ 728 (US$ 673 for import).
The Mozambique public institutions that will lead the clusters: the INNOQ; the IPEX; and the Customs Service are themselves at varying levels of capacity. The work to be done in each cluster varies accordingly from the general to the particular.
The leading institution for the Quality Promotion Cluster, the National Institute of Standardization and Quality, INNOQ, has received limited attention and financial support from government till now and lacks many fundamental means (suitable premises for one). The approval of a National Quality Policy by the Council of Ministers in 2003 was a promising step in a new direction. A fundamental issue for the INNOQ is to harmonize its standards and procedures with SADC Member States INNOQ has been linking closely with SADC Secretariat on the Standardisation, Quality Assurance, Accreditation and Metrology (SQAM) project. Given that the number of existing materials and procedures available to harmonize are quite limited in number the INNOQ recognises that there is an urgent need for production of national norms.
Similarly basic issues need to be addressed in the area of metrology, where for instance, INNOQ is unable to calibrate and/or verify weighting instruments with a measurement capability higher than 50 kg in the Provinces due to lack of equipment and the lack of transportation means.
On certification, the challenge is to make the enterprises aware of the advantages of being certified (As an example of extremely low certification culture only nine Mozambican companies are ISO 9001 certified and just one is ISO 14001 certified), and to promote its use as an instrument of competitiveness. The cluster will attend to the basic institutional capacities of the national quality system. The SADC-SQAM project could then contribute to regional harmonization. The cluster will also upgrade existing laboratories in export-priority sectors and support them towards their international accreditation (in coordination with other donors such as SECO that are active in this area).
The leading institution in the Trade Information cluster, the Institute of Export Promotion, (IPEX) was created in 1990 and has received continued support within the limitations of the state budget. The regular budget of the institution has been steady at around € 460,000 p.a. (staff of 40 people). The main need within this cluster is to involve the private sector more actively in the identification of needs, and then deliver the information and advisory services in a user-friendly way.
Finally, the leading institution in the Trade Facilitation Cluster, the Customs Service, is the one, among those mentioned here, that has received the most support in recent years, having concluded last year a large reform process implemented by the government with strong financial and technical support from the UK’s Department for International Development (DFID). Consequently the activities proposed for this cluster are more focused. It will address two specific requests from the private sector: the introduction of al electronic payment system for user of customs’ services (currently payments are only accepted in cash or through bank deposit); and the implementation of a “Single Window” system to simplify the clearing process of foreign trade transactions.
For further information, please contact:
in Vienna Emilio Vento
in South Africa Stefano Bologna
in Mozambique Steven Dils