Alberto Clementino A. Vaquina, Prime Minister of Mozambique, speaks to Upper Reach about the opportunities that abound in the country outside its minerals industry, with the government regarding the private sector as “a partner for development and not as a rival” as it strives to create a new entrepreneurial class that will serve as a key tool in reducing poverty and increasing prosperity. After the 1992 General Peace Agreement, signed in Rome by Frelimo (the government) and Renamo (rebels), Mozambique achieved internal peace. Since then it started to gradually rebuild not just its infrastructure but also its dignity and image. It has also found hydrocarbon reserves of ground-shaking magnitude. The country is now creating a legal framework, an economic base and a political administration that is getting ready for the big leap forward toward a consolidated development. What is your evaluation of the current situation and how do you envision the next 10 years?
For the next 10 years, we expect the illiteracy rate to be among the lowest possible indices; we expect the population to achieve higher degrees of technical education. We want a population that is able to face the challenges of their own existence, as individuals, as families, communities and a nation.
Mozambique currently has many internal opportunities and the best way to make the most of them is to generate knowledge. For this to happen, it is crucial to prepare Mozambicans with hard skills to enter the job market. Using the opportunities that result from the mining industry, we need to form a more solid entrepreneurial class than the one we have, to be ready to face the needs of the internal market and equally enter other markets using our potential.
In the area of health, considering our current work, we need to reduce infant and maternal mortality, and to bring down HIV/AIDS infection rates and reduce malnutrition and nutritional deficit, which affect a large section of the population.
When we imagine Mozambique in the next 10 years, we dream of a country with a substantial reduction in foreign dependency, a country able to face most of its needs, open to cooperation with the world, in circumstances where there are tangible advantages for Mozambique. You mentioned the creation of an entrepreneurial class as a tool to reduce poverty and create new opportunities. What are the policy tools needed to create an entrepreneurial class?
We need of a set of concrete actions that can guide us to our objective.
Firstly, the general education of the population. We need education in a broader sense, to improve living standards and also to create new entrepreneurs and satisfy the need to perceive risks and advantages involved in the process of doing business. We need our entrepreneurs to perceive that doing business is not a selfish activity, but rather an activity that provides services to the community through job creation, and the improvement of production and performance through its contribution to the state’s revenues, which will lead Mozambique to achieve a better provision of income.
Some obstacles that certain entrepreneurs identify as not favourable for the consolidation of the private sector come from the legal framework that needs to become more business friendly.
We must also mould the mentality of state employees so that we are promoting development, especially in the private sector, to which we must look at as a partner for development and not as a rival of public interests. These efforts to develop our entrepreneurial class must generate an environment so that any Mozambican is willing and able to apply his or her knowledge and finances accordingly.Speaking of risks, most of the countries where energy resources have been discovered have suffered one of the most dangerous development traps: the ‘Dutch Disease’, where the appreciation of the currency – as a result of natural resource exports – limits exports and the internal growth of the economy and the capacity of businessmen to expand. What is the strategy of Mozambique to avoid this path?
Ever since our country started with the exploration of resources on a large scale, the Government has oriented the population and the large companies on the need to look at the development of Mozambique in a global way. We are a country with a large availability of arable land. The potential for agriculture, tourism, conservation, fishing and infrastructure is enormous. Natural extractive resources can contribute to the growth of the country but they cannot shift our focus. During the last 10 years we saw growth that was always above the 7% mark; this enormous expansion was not led by coal, gas or oil.
The fact that these resources have been discovered does not mean that we will immediately see the monetary results: it is a long process, which takes a lot of investment and time. Even when we begin to see the outcome, we will start experiencing the benefits through the contributions of companies to the tax system. There will be a great increase in the government’s budget, but not all the money will come from the exploration of resources. The way we look at the mining industry should not be obsessive; it will bring dynamism to development, but the mining industry will not be the one to resolve all our problems. Starting today, we have to prepare ourselves for a future in which we will no longer have any natural resource to extract. This is the only way to make us sustainable and prepared for tomorrow.
The way to keep ourselves viable is to develop our traditional activities, especially those related to sustainable resources and perennial reproduction; it all depends on how far we want to explore them or not. Also the training of our human capital is essential, so that Mozambicans are not only able to explore the opportunities of the mining industry, but also look at the global needs. There we will easily see many work opportunities like agriculture and agro-processing, tourism, livestock production, etc., without necessarily depending on the mining industry.
If our entrepreneurs become more solid and widely supported, they will discover other new activities or associated activities, or even economic activities that are not related to any existing industry. This knowledge creation and dissemination of best practices will be the factors that will allow the economy to be sustainable in the long run.
We are also working on major changes in the infrastructure sector, involving roads, bridges, railroads, ports and the overall social infrastructure. We still have the challenge of overcoming the situation of children studying outside classrooms and of those that do not have desks at school, as well as expanding health services to cover more mothers and offering more assistance to children. All of this requires a big expansion of infrastructures and services.
Our budget still depends almost 40% on interventions from other countries, our global partners. As a matter of sustainability, the challenge is to stop depending on donations and other loans so that we can afford our change with our revenues. This will also shift the focus on a third group of countries which could be in a situation worse than ours and whose situation is riskier and needs more direct attention. If today we receive, tomorrow we can give.
It all depends on the growth of our economy and on our self-esteem. Nobody likes to always receive what belongs to others, therefore we want to achieve self-sufficiency with our own work and turn into an independent country that can respond to its own demands.In a recent interview with the Norwegian Minister of International Development, you spoke about the need to create a stronger sense of duty by consolidating “citizenship”, which is created only when people pay taxes and feel they can claim benefits and representation. This concept of citizenship by taxation will help to expand the fiscal base of Mozambique. What is the strategy to integrate more people into the tax collection cycle?
We were living not so long ago in a situation in which our budget depended 70% on donations and/or foreign loans. Thanks to our financial organisation, before as well as after the creation of the “Fiscal Authority of Mozambique”, we are structuring our economy so that our fellow citizens participate with their own earnings.
We want to resolve the problems of the country with the State Budget; the government is not the one who will benefit from the contributions of the citizens. The government is mainly a structure that collects them and returns the contributions in the form of benefits for the people, who often are not provided with free public services or good infrastructure. The returns are merely a form of channelling their contributions.
If today we are in a situation of dependency of nearly 40% of our budget, we are transmitting the message that there has been a progressive growth of contributions, not only from firms, but also from individuals; nobody (except in cases foreseen by the law) is exempt from contributing in line with what their own income is. There are thousands of businesses in the UK and Europe that do not have the size of the big multinational companies, but they do have the financial capacity and willingness to invest in a growing market such as Mozambique, in sectors such as food production, logistics, infrastructure, etc. What will be the role, in the next 10 years, of medium-sized international firms in this new map of development that the current government is drawing and what is expected from them?
An increase in foreign investment will allow us to resolve some of the current challenges in areas such as railroads, ports, telecommunications, etc. All commerce, all goods and every service that exists in this country needs an interconnection structure and a more functional structure, allowing acceleration in our training capacity to face our internal demands and the exploration of certain resources.
At the moment there is an obsession with mineral resources and there are resources that end up left aside: we have a lot of land and the need to feed not only ourselves but also the entire world, and we believe an investment in agriculture in Mozambique can help in answering Mozambique’s own internal needs and transform our country into a breadbasket.
Mozambique is at a very early stage with regards to industrialisation. All the potential areas for investment need a major financial push, these are the areas in which foreign private investment can make the difference; we can provide the human resources to answer our own internal demands.The dream of Samora was to bring about a second independence and according to President Guebuza, we are on the road to achieving it. Speaking about the next 10 years, what does it mean to get closer and closer to achieving a second independence?
The fight for national liberation is the beginning of Frelimo. In 1964 the party had freeing the land and the people as its main objective. We freed the land: Mozambique is an independent country. We now need to liberate people from poverty, from illness, from dependence on others, and create a base in such way that our children wake up with basic needs covered and they can look to the future with more hope.
We free the people so that Mozambicans can speak with their heads held high and can relate to others, all across the globe, as equals – not only as a recipient country, but rather an active participant in global development.Finally Prime Minister, the world is saying that the 21st century belongs to Africa; it belongs to women and belongs to entrepreneurs in emerging markets. What will be the role of the most important asset that this country has: its women?
Women are a priority without a doubt. Our Government has a framework in place called “Program for the Liberation of Women” which already derives from the times of the fight for national liberation in which it was defined that the liberation of women is not an act of charity but rather a duty; it does not result from a humanitarian and compassionate position, as President Samora used to say. Instead, the liberation of women is a fundamental condition for the triumph of the revolution; we cannot liberate a country in which more than half of the population end up being victims of oppression in their own homes and society.
The matter regarding the education of a girl comes in our managing the initiative as a key program, because as a philosopher once said: to educate a man is to educate an individual, but to educate a woman is to educate a society. There are studies showing that if in a marriage only the man has been educated, there are no guarantees that their kids will go to school. However, if the woman is the one who has been educated, the probability that all her children will go to school is much higher. So with that in mind, we already know where to start, or where to continue, which is by empowering women and giving women more opportunities.
I have worked as manager at several levels and the type of seriousness and commitment to challenges varies with gender. Normally, women are more committed to the causes, since the majority of their income goes towards the wellbeing of their family, whilst with men it is not always verified, this commitment in lieu of the wellbeing of the family.