Africa-Press – Mozambique. Mozambique is going through a critical moment in its economic trajectory. The structures that should sustain growth and ensure the well-being of the population are weakened by a series of structural issues, from the informality that dominates the productive sector to the shortage of qualified workers. These challenges, far from being insurmountable, require an urgent and coordinated response between the public and private sectors, combined with a strategic role for the Academia.
It was during the inaugural lecture at the University of Save that Hélder Muteia, former Minister of Agriculture and FAO Sub-regional Coordinator for Central Africa, made a clear and direct diagnosis of the biggest obstacles that Mozambique faces in its path of economic development.
Throughout his speech, Muteia did not mince words in underlining the need for a paradigm shift, pointing out the structural weaknesses but also the opportunities which, if well seized, could transform the Mozambican economy.
Formalising the informal economy
Hélder Muteia began his analysis by highlighting the negative impact of informality, which predominates in Mozambique’s business sector.
According to Muteia, the national business community is still in a very early and vulnerable phase, exacerbated by the informal nature of many production units.
“Informality prevents the integration of production units into the country’s fiscal and financial processes, which in turn makes it impossible to formulate effective public policies for the sector,” he said.
The figures are alarming: 80% of the country’s economic operators operate in the informal sector, and almost half of Mozambique’s gross domestic product (GDP) comes from this area. Informality limits the capacity for innovation, hinders access to credit and promotes unfair competition, compromising human capital and access to markets. The lack of regulation and public policies that integrate these units into the formal economic system is one of the biggest barriers to sustainable growth.
For Muteia, the solution is not the marginalization of informality, but its gradual formalization.
He argues that it is necessary to create mechanisms that encourage small business owners to take the step towards formalization, through tax incentives, training and support for business management.
“The economy cannot continue to be sustained by production units that do not comply with tax and financial regulations. We need an economic system that is inclusive, but also fair and effective,” he stressed.
Transaction costs
Another central issue addressed by Muteia was the issue of high transaction costs, a structural problem that severely penalizes the competitiveness of the Mozambican economy.
He gave the example of beans, one of the most consumed agricultural products in the country. “In a district like Sanga, a can of beans that costs 600 meticais can reach 1,200 meticais in the city of Lichinga, after traveling just 100 kilometres. This price increase is not due to the transformation of the product, but rather to the weight of transaction costs,” explained Muteia.
Transaction costs include everything from transportation, which is made more expensive by poor road quality, to obstacles imposed by bureaucracy and insecurity along trade routes. Muteia stated that the transportation system and market regulation in Mozambique are extremely inefficient, making trade more expensive and, consequently, increasing the cost of living for citizens.
Academia and skilled labour
In addition to informality and transaction costs, the lack of skilled labour also stands out as one of the main challenges facing the country.
Hélder Muteia was emphatic in stating that Mozambique’s education system is still unable to train professionals who are suited to the challenges of the market.
“Young people leave university with diplomas, but without the practical skills needed to develop the productive sector. This limits not only the competitiveness of companies, but also the country’s economic development,” he warned.
Many recent graduates are unable to integrate efficiently into the labour market, as they do not have the technical skills required by companies. Businesses, in turn, feel the lack of a qualified workforce to boost productivity and innovation.
The solution, according to Muteia, involves greater coordination between the education system and the needs of the market, with a focus on technical and vocational training, so that young people can receive practical training and quickly enter the job market.
Collaboration with the business sector
For Muteia, the key to solving these problems lies in collaboration between academia and the business sector.
He argues that universities should take a more active role in training qualified professionals who are capable of innovating and contributing directly to the country’s economic development.
“The great advances of humanity have always been possible thanks to collaboration between Academia and business. Mozambique needs a similar model, where universities train people with practical skills, and businesses provide the necessary resources and experience,” said Muteia.
In addition, Academia should also be a partner in creating innovative solutions to the structural problems the country faces. “Academia can help develop solutions that improve economic management, the efficiency of production processes and the competitiveness of companies,” he concluded.
Using gas revenue to invest in key sectors
One of the most controversial points addressed by Muteia was the exploration of gas and oil. For the former minister, excessive dependence on natural resources can be dangerous for Mozambique’s economy.
“Gas exploitation can be a poisoned gift if it is not managed responsibly. Although natural resources can generate wealth, public policies are needed to ensure a fair and sustainable distribution of these benefits,” he said.
Muteia warned that hydrocarbon exploitation tends to generate an unequal distribution of wealth, concentrating the benefits among the elite and leaving the vast majority of the population out.
“It is essential that the income from the exploitation of natural resources be channelled into a sovereign fund that allows investment in crucial sectors such as education, agriculture, health and infrastructure,” he argued.
For him, economic development cannot depend solely on the exploration of natural resources, but must be supported by a solid industrial base and public policies that promote inclusive growth and economic diversification.
Hélder Muteia concluded his speech with a message of hope and challenge. Mozambique has everything it needs to become a prosperous and inclusive economy, he noted, but a joint effort between the government, the academia and the private sector is needed.
“Economic challenges can be transformed into opportunities, but we need to act with determination, innovation and responsibility,” he concluded.
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