Supporting the Policy Environment for Economic Development
SPEED+

Previous Publications

The anti-corruption package of Mozambique has been reviewed in accordance to the international treaties the country has ratified and other soft law mechanisms. As such, the present report was written taking into account the international standards to prevent and combat corruption, to which Mozambique is party to – the United Nations Convention Against Corruption (UNCAC), the African Union Convention on Preventing and Combating Corruption (AU Convention) and the Southern Africa Development Community Protocol Against Corruption (SADC Protocol).

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Due to the importance of the agricultural sector in Mozambique the government has approved several policies to support the development of this sector including the VAT exemption for agricultural products. However, it seems that for the private sector is not clear how the fiscal system works in this sector including the VAT exemption. Moreover, the Mozambican Parliament has recently approved a bill that alter the Value Added Tax (VAT) code, exempting from VAT some imported commodities that constitute raw materials for the animal feed industry such as maize and soybean. For some segments of the society the impact of such an exemption on domestically produced maize and soybean can be negative. This study - which is a SPEED response to a CTA request - reveals what is the VAT regime for agricultural products in Mozambique and how it works in practice for small, medium and large enterprises. The study also presents the main implications of waiving the VAT on imported maize and soybean for the competitiveness of domestically produced maize and soybean and for the different sectors including animal feed and food industry. The study conclude that this exemption cannot be effective on an environment where most of the domestic farmers are not registered and consequently have no fiscal number (NUIT) and cannot produce a legal document to be presented to the Tax Authority. Also, 82% of maize and soybean farming is done by family producers which fall under the Simplified VAT Regime. Under this Regime there is no deduction of the VAT paid on inputs. Additionally, the reimbursement process is difficult and time consuming. Thus, under this environment VAT is most of the time a cost for the farmers and for the food and animal feed industry.

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Developing sustainable tourism concession models in and around Mozambique’s key protected areas, is one way for the Government of Mozambique (GoM) to get the private sector engaged, to enable communities to benefit from tourism development, job creation, and to help Mozambique’s tourism industry grow. When designed and implemented correctly, tourism concessions can greatly benefit a wide range of stakeholders, while ensuring the conservation of natural resources and biodiversity.

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In August 2011, the government presented a draft Tourism Decree (18/2007), and asked for a private sector opinion of the paper. Among other things, the Decree outlines the standards for rating hotels and other tourism facilities (e.g., three stars, four stars, etc.). Femotur, the Federation of Tourism Companies, asked for help from SPEED to facilitate the collection and aggregation of opinions from the private sector about the decree. With the findings of this report, Femotur will present the Ministry of Tourism with a comprehensive position paper that incorporates global and local trends.

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Land is one of the most important existent natural resources in the country, given that it is from land that a large part of the wealth of countries and their inhabitants is produced and extracted. In Mozambique, land has been dealt with, with special care, in an attempt to reconcile the need for economic development with the most appropriate way in which to respond to social issues which are related to land.

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Under Objective 3 of the SPEED Contract, the SPEED Team will strengthen business associations throughout Mozambique so that they become better engaged in the policy advocacy process and lobby for an improved business environment. We will provide assistance business associations to strengthen internal capacity and participate effectively and sustainably in the policy process at the national, provincial and local levels.

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This presentation/report sets out a pragmatic and systematic framework for estimating the monetary benefits for Mozambique from business environment reforms supported by USAID’s SPEED project (hereinafter, the “project”). The framework can be applied to a variety of issues, including policy changes, regulatory measures, efforts to strengthen the implementation of reforms, and even interventions aimed at preventing the introduction of new regulatory obstacles to trade, investment and job creation.

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The requirement of “documented expenses” for income tax purposes and the “taxa liberatoria” are the two biggest tax issues adversely affecting the agricultural sector. The income of thousands of smallholder farmers and the agriculture production of these farmers could be protected by dealing with this issue. If these issues are not dealt with soon, the market for small farmers could drastically diminish. If these problems are not addressed, it may become cheaper for firms to import agricultural products than buy from local farmers. In fact, there are reports that maize is now exported to Malawi where the produce is properly documented and then it is re-imported into Mozambique. This arises because buyers cannot legally buy from unregistered farmers without paying substantial taxes, either through the 20% “taxa liberatoria” or through fines that increase costs 67 percent.

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The Government of Mozambique approved on February 2010 the creation of a new Port Terminal in Nacala which was later concessioned to a private company (NCL & Africa Import and Export Ltd) to operate it. The purpose is to unblock the Maritime international terminal which is completely overloaded. The two terminals were operating simultaneously providing the same services to exporters and imports until January 18, 2012, when the customs authority announced a mandatory use of the new terminal by the exporters. Against this background, ACIANA (Commercial and Industrial Association of Nampula), representing the business community in the north of the country, in general, and exporters, in particular, has begun a dialogue with the Provincial Government of Nampula with the aim of discussing the following issues: the mandatory use of TEEN, the absence of the minimum working conditions required to an export port terminal, the cost and length of using it.

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