Mozambique’s SMEs need more support - CNBC Africa

Mozambique’s SMEs need more support

Southern Africa

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Mozambique recently voted in its municipal elections. PHOTO: Getty Images

“The rest of the country, which really depends on the small and medium-sized businesses for its growth and for its employment generation, is still lagging quite far behind. The imbalances look as if they’re likely to grow rather than diminish,” Colin Waugh, a partner at SCP Africa, told CNBC Africa.

“We’ve had, just in the last few weeks, the release of the World Bank’s Doing Business report, which shows Mozambique has improved very slightly from the 142nd position to 139th in the world – [its] not really an encouraging indicator. At the same, a lot of the obstacles which small businesses have often cited in the past, such as high interest rates for access to credit, really haven’t improved.”      

Mozambique voted in largely peaceful municipal elections on Wednesday. This comes after tension and violence in past months between the government and the main opposition group.

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“The election results are still coming in but most of the big cities, the big municipalities have already given clear indication of which way they’re going. There’s been a big transformation in the opposition alignment from former main opposition party Renamo, who still hold the second highest number of seats in parliament, to the new Movement for Democratic Mozambique, who have boosted their showing right across the country quite dramatically,” Waugh explained.

“It’s a big change in the Mozambican landscape and I think it means there’ll be an exciting presidential election this time next year.”   

While Mozambique is expected to reap the rewards of its growth and development, Waugh believes that the imbalance between large and small business will continue to grow if it is not addressed soon.  

“This is one of the big challenges now for the economy as these mega-projects start to come on stream over the next five to 10 years. There’s a worry that the imbalance tends to favour the full-on corporations, and that imbalance may grow – the very high unemployment in economy cannot be addressed through the growth of small businesses,” he said.  

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