Norway believes that sustainable and inclusive economic growth in the poorest countries contributes to the alleviation of poverty. Increased value creation, productivity and employment through establishment of new companies are key elements in such an approach. However, in many development countries the framework for the private sector is weak. The lack of a conducive framework hampers business development, as well as local and international investments. Framework conditions include a broad spectrum of conditions such as peace and political stability, good governance and responsible macroeconomic policies, as well as more business related laws and regulations, property rights and transparent management of the companies. Norwegian development cooperation policy puts priority to the creation of improved framework for private sector development, investment climate and infrastructure, as well as building capacity through vocational traning and women’s economic participation.
The private sector is increasingly viewed as an engine for growth and development in Mozambique. Economic growth has over the last few years been driven by large capital intensive projects such as the MOZAL Aluminium smelter, the SASOL gas project, heavy sand mines, and more recently coal mine projects as well as oil and gas exploration projects in northern Mozambique. Large capital intensive investments are expected to continue and to secure employment. The development of local content will remain an important topic for both decision makers and investors. Notwithstanding these recent developments, Mozambique remains one of the world’s poorest countries. Of the 24 million Mozambicans, less than a million have a formal job. Although mega projects have contributed massively to Mozambique’s overall economic growth, employment of scale can only be achieved in the more labour intensive sectors such as agriculture and agri-businesses, where up to 80 % of the population provide their livelihood.
Norwegian support to private sector development in Mozambique
Industries and companies developing as a result of the enormous gas discoveries in the northern province of Cabo Delgado could potentially employ many Mozambicans. However, the petroleum industry is highly specialised and currently Mozambique lacks skilled workers. Under the Oil for Development Programme Norway supports the Ministry of Education/PIREP to build capacity through technical and vocational training related to the oil and gas sector in Cabo Delgado. The project foresees public schools potentially under complete or partial management of private entities, as a private public partnership. In addition, Norway supports an enterprise development project in Palma in the Cabo Delgado. A study to help design the intervention will be launched together with ENH Logistics, a subsidiary of the state owned oil company ENH.
Being a sector that provides livelihood to the majority of the Mozambican population, Norway assists the development of agri-businesses. The Beira Agricultural Growth Corridor, an idea originally stemming from the Norwegian fertilizer company YARA, assists the development of local partnerships between the public, private companies and development agencies to promote commercially viable agri-businesses. Norway promotes rural and farming enterprises through collaboration with the National Corporate Business Association Cooperative League of United States of America (NBCA CLUSA). Furthermore, Norway supports a programme on conservation agriculture, gender and land rights through Norwegian People’s Aid.
Norway believes companies have an impact on social development where they operate. They therefore have a responsibility that extends beyond value creation. Norway supports the promotion of Corporate Social Responsibility through cooperation with the local Institute of Directors’ initiative to draft the Mozambican Code of Corporate Governance. Moreover, as a partner to the common fund of Liga Moçambicana dos Direitos Humanos, Norway supports Liga’s work on the implementation of the United Nations Guiding Principles on Business and Human Rights in Mozambique.