Supporting the Policy Environment for Economic Development

Proposed export surcharge on pigeon peas

The Government is proposing a 20% duty (ad valorem) on the export of pigeon peas for a period of 5 years. The arguments put forward by the Government in its proposal are: (i) the need to protect an emerging/infant pigeon pea processing industry, and (ii) the opportunity to generate additional government revenue, not only through the collection of the export duty but also by reducing and/or eliminating the potential occurrence of under-invoicing pigeon pea exports.

The history of the imposition of export duties is long and diverse. The economic reasoning for the imposition of export duties is based on assumptions raised by the Government, but the impact of an export duty varies according to the country controlling or not controlling the market of the product that is object of an export duty. In the case of countries with a relatively small and open economy, such as Mozambique, the imposition of an export duty on peas will without a doubt create distortions and disincentives in the pigeon pea market, with all conceivable negative implications for the production and export of pigeon peas and for the economy.

In response to requests received to comment on the proposed legislation SPEED prepared three Notes, which are available below in Portuguese and English.

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