Ambassador Pittman’s Participation in the Conference on Doing Business in Mozambique

During the Ministry of Industry and Commerce’s (MIC) Doing Business Conference the Ambassador focused on “Aligning Government, Private Sector and Developing Partners Priorities Regarding Business Enabling Environment.” Durante a Conferência sobre Fazer Negócios realizada pelo Ministério da Indústri

Boa Tarde

Your Excellence President Nyusi,

Your Excellence Minister Tonela,

Dear colleagues,

Ladies and Gentlemen,

It is a pleasure to be here today, and an honor to speak about such an important topic.  I applaud the leadership of Minister Tonela to host such a conference, and of President Nyusi to signal his commitment to improving the business investment climate.  The ease of doing business is what will ultimately determine the growth of Mozambique’s small and medium businesses, and therefore the growth of its economy and ability to create jobs for all its citizens.

Mozambique, with is abundant fertile land, favorable trading position, hardworking people, and rich mineral resources should be a land of opportunity.  It is not difficult to envision booming foreign investment, Mozambican firms contracting with mega investors, national enterprises establishing joint ventures with outsiders, thriving transit trade, and a productive and competitive agricultural sector – all of which are providing employment and enriching the lives of Mozambicans.  But it is time to stop talking about “potential.”   It is time to make real progress.  And that requires a vibrant private sector.

And one thing is clear.  The private sector cannot thrive if high risk premiums impede its access to capital, if an overly bureaucratic process delays its ability to start a business, if regulations constrain it from contracting with mega investors, if government policies restrict its ability to engage in international and regional trade, if the government fails to make prompt payment for goods and services requisitioned through public contracts, or if the business climate does not ensure a level playing field for all.  Businesses in Mozambique operate in a high cost and high risk environment.  This often tempts them to lobby the government for protectionist regulations and policies, which disrupt the market, chase away foreign investors, prevent competitive industries from developing, and in the end hurt the people of Mozambique.

The United States Government has been proud to partner with the Government of Mozambique to improve the business enabling environment for the past twenty years.  A lot of good work has been done but the world has also changed.  Today, if the Government of Mozambique really wants to achieve economic growth rates for the economy as a whole, not just the extractives industry, and to create jobs for all citizens, new energy is needed.  With this in mind, I would like to highlight three critical points.

First and most important, the job of improving the business environment is not the job of one Ministry.  It belongs to the entire Government of Mozambique.  I know that Minister Tonela has been given the task of addressing key barriers to investment; however I’d like to encourage you to think about this agenda as inter-Ministerial and critical to the growth of the entire country.  What we call in the United States a “Whole of Government Approach.”  We can see the examples of countries that have made extraordinary gains in their investment climates, such as Rwanda and Georgia.  What was it that made the difference for them?  Many experts argue that the difference was high level government commitment to making real progress.  Inter-ministerial coordination is not easy, but it can be achieved if the Government makes it a priority.

Second, there is a proliferation of dialogue platforms and policy matrices about improving the business climate, but with this proliferation comes some confusion and lack of focus. Speaking as a development partner that would like to support the Government of Mozambique to achieve its highest development priorities, I think we need to focus on those elements of a strategy that are most important and start addressing those.   As we have initial successes we can broaden these efforts.   So, I would like to propose an idea. For 2018, we should choose – let’s say – five priority reforms and see if they can be achieved in 2018.  This may mean postponing action on other also important reforms, but it offers – I think – a better chance of completing work – and seeing results – on those priority reforms.

Third, measuring progress is key.  Adopting new regulations or legislation alone should not be seen as the end of any reform effort.  It is imperative that high-level, inter-ministerial government engagement continues throughout the implementation process to evaluate progress, to assess actual impact, and to course correct when required.  For this to happen, we must ensure that clear, measurable performance targets for any reform effort are established at the outset and that impact data is collected, shared, and analyzed on a regular basis.  And when that data demonstrates that the desired impact has not been achieved, political leaders must be willing to make bold changes either in policy or implementation in order to put progress back on track.

Finally today, I want to emphasize that Mozambicans are not alone in this reform effort.  We can see this in a concrete way just by looking around the room today.  International donor partners, including the United States Government and the international private sector remain committed to supporting the improvement of the business enabling environment in Mozambique.  We are all prepared to stand and work with you in order to achieve your goals.  As we often say, “estamos juntos.”

Thank you.