Structure and performance of manufacturing in Mozambique

Abstract

This survey was designed to research a number of basic issues, including the composition of the manufacturing sector, sources of growth, major impediments to growth, the composition of the labor force, and accessibility to finance in Mozambique. A team of World Bank staff and local consultants visited and conducted interviews with almost 150 manufacturing firms of all sizes in most parts of the country, covering a number of topics, including discussions of business start up, the collection of basic accounting data, and discussions of what business services the firms would like. The interviewers also spoke with a sample of workers from each of the firms. The survey was similar to ones conducted by the Regional Program on Enterprise Development (RPED) in seven other sub-Saharan African countries, and it is thus possible to compare some of the results in Mozambique with similar countries. Although there are severe impediments to growth, including lack of finance, a shortage of skilled labor and poor infrastructure, real growth rates in the manufacturing sector in Mozambique have averaged more than 6 percent in recent years and appear poised to increase. The business environment is often cited as a particular problem, but we find that firms are extremely confident about the future, much more so than in other African countries. Mozambican businessmen are not only confident about their own future, but also that the government will continue its reform policies and the country as a while will prosper. This paper begins by providing a description of the sample, which is then followed by a brief overview of growth and changes in the manufacturing sector since colonial times. Next what firms perceive as their major business problems is discussed. This is followed by discussions of manufacturing firms' access to finance, the labor market and infrastructure problems. Finally, a short section explores the business services firms in Mozambique need.