Supporting the Policy Environment for Economic Development
SPEED+

Trade

The Mozambican Export Promotion Agency (IPEX) is generally regarded as having been ineffective in promoting export development in Mozambique. For that reason, the Ministry of Industry and Trade (MIC) has requested a second proposal to establish an Institute of External Trade (ICEM) in Mozambique. It was envisioned that ICEM would build on the resources of the existing IPEX, and would take a broader role in improving export competitiveness of Mozambican firms than the current relatively narrow focus of IPEX. Following the request from MIC, the Confederation of Mozambican Business Associations (CTA) requested an assessment to review and evaluate the probable impact of that proposal on Mozambican exports, the costs of the new institute, and its probable effectiveness in the light of best practice in trade promotion. On the basis of the assessment, it is unlikely that the new Institute would significantly alter the current trend in Mozambican exports, or address the current barriers which obstruct export growth, specially the supply side problems with export and the wider problem of firm competitiveness. Moreover, many of the proposed actions have been found to be already undertaken by the Investment Promotion Centre (CPI) in Mozambique. Looking at general trends in trade promotion organizations worldwide, it has been seen that no single agency can provide all of the support needed for successful exporting. Instead of investing extra time and resources in establishing a new institute, priority should be on the establishment of a National Trade Development Strategy.

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In 2006, Mozambique was ranked 137 in the World Bank's Doing Business report, out of 175 countries analyzed. This poor result shows that the private sector in Mozambique faces serious problems with the institutional enabling environment. The country's ranking falls in the bottom one-third internationally in the areas of starting a business, employing workers, trading across borders, enforcing contracts, and closing a business.

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The U.S. Trade and Investment Conference held in Maputo, was organized by the Investment Promotion Center (CPI) and the TIP MOZ project. It represented a platform for discussion and analysis of the current situation of Mozambique in the international trade world as well as consolidates future steps to develop strategies of cooperation and help Mozambique grow one point further in its capability and efficiency in trade. The attached report presents a summary presentation that looks at identifying strengths, opportunities and potential areas for investment as well as existing conditions and infrastructure for future endeavors in the country.

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Excises Tax in Mozambique - Comments on Government Proposal to Increase Taxes

The purpose of this note is to provide CTA a critical analysis of proposals contained in a discussion paper by Mozambique's Ministry of Finance, from 28 April 2008, to amend Specific Consumption tax (ICE). The ICE, passed into law in 1998, is an excise tax levied on a relatively narrow band of imported and domestically produced goods. Recently, the second proposal was accepted by the Council of Ministers and is scheduled to be passed by parliament shortly.

 

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The Preshipment Inspection Agreement recognizes that GATT principles and obligations apply to the activities of preshipment inspection agencies mandated by governments. The obligations placed on governments which use preshipment inspections include non-discrimination, transparency, protection of confidential business information, avoiding unreasonable delay, the use of specific guidelines for conducting price verification and avoiding conflicts of interest by the inspection agencies. The obligations of exporting members towards countries using preshipment inspection include non-discrimination in the application of domestic laws and regulations, prompt publication of those laws and regulations and the provision of technical assistance where requested.

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In April, 2006, the Council of Ministers issued Decreto n.o 10/2006 authorizing the introduction of non-intrusive customs inspections using modern scanning technology, through a concession to a private-sector operator. The Decreto suggests that the concession arrangement was motivated by the high cost of procuring and operating the scanning equipment (contornar a problemática dos elevados custos que o equipamento acarreta). The Decreto also provided for the concessionaire to recover its costs by charging fees to the shippers. The Government then awarded the concession to Kudumba, a new Mozambican company.

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Proposal to Improve Trade Data for the Mozambican National Statistics Institute

Foreign trade data are employed in a number of official capacities by the Mozambique government and international institutions such as the International Monetary Fund (IMF) and World Bank. The data form the basis of monetary controls (exchange rates), fiscal policies, tax collection, and national accounting of industrial and agricultural activities. Moreover, INE trade data are employed by numerous local and international institutions for monitoring the state of the Mozambique economy and for negotiating foreign trade agreements. They also provide important resources for monitoring and evaluating micro- level projects and issues such as industry and agricultural development as well as monitoring unfair trade practices such as price dumping.

 

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