Maputo, November 22, 2007 —
Improving infrastructure, supporting smaller businesses, and creating a more favorable environment for investments are high priorities for IFC as it strives to expand its development impact in Mozambique, IFC Executive Vice President and CEO Lars Thunell told reporters at the end of his first visit to the country today.
The two-day visit highlighted IFC’s commitment to its well-established partnership with Mozambique. Thunell met with government officials, development partners, local private sector representatives, and several IFC clients.
“Mozambique’s strong economic growth provides an encouraging example of how the private sector supports development and helps reduce poverty,” Thunell said. “IFC is well placed to support business and policy objectives that meet the country’s challenges, and innovate to invest in more projects and sectors.”
IFC’s strategy in Mozambique focuses on mobilizing direct investment to economy’s key sectors, including tourism, mining, energy, and financial services. IFC also aims to strengthen access to finance for the private sector, help develop infrastructure, and improve the investment climate. IFC Advisory Services programs focus on areas such as increasing the linkages between large investments and the local economy and increasing private sector awareness of HIV/AIDS issues.
IFC has several programs in place to support small and medium enterprises in Mozambique, including the Mozambique SME Initiative, a $12 million program supported by the Swiss and Finnish governments. The program provides financing and advisory services to the country’s small and medium companies with the aim of creating a more viable private sector and attracting investors to the small business sector. Under the program, long-term funding to companies can be up to $1 million, combined with hands-on partnership and support in key business functions, including marketing, management, human resources, and information technology.
Earlier today, Thunell launched the MozLink manual (Developing SMEs through Business Linkages – The MozLink Experience
Version 1.0
). In it, Mozal and IFC present a framework tested by the large aluminum smelter and step-by-step practical guidance on how to replicate the MozLink experience to create competitive small and medium enterprises that can be integrated into the supply chains of large companies. IFC recently expanded the number of large corporate partners in its Mozlink program from one to five. The program aims to link 100 local small and medium enterprises to the supply chains of large companies to expand opportunities for local businesses.
IFC is considering other programs to boost smaller businesses in the country, including support to financial institutions to increase their lending to the sector and microfinance initiatives.
Earlier this month, IFC recognized Mozambique was one of the top five reformers in Africa based on the
Doing Business 2008
report, an annual publication by IFC and the World Bank. Mozambique replaced legislation dating from 1888 with a new commercial code that introduces stricter corporate governance rules and strengthens the rights of minority shareholders. The new code also modernizes the business registration process, cutting provisional registration and making notaries optional. Start-up time for new firms fell by almost three months, while specialized judges for commercial cases should improve court efficiency.
Despite these improvements, Mozambique still ranks number 134 out of 178 on the ease of doing business. IFC is working closely with the government to make additional reforms that will improve the environment for businesses.
Since its first investment in 1986, IFC has committed $208 million for its own account, to 22 projects in Mozambique.
About IFC
IFC, a member of the World Bank Group, fosters sustainable economic growth in developing countries by financing private sector investment, mobilizing private capital in local and international financial markets, and providing advisory and risk mitigation services to businesses and governments. IFC’s vision is that poor people have the opportunity to escape poverty and improve their lives. In FY07, IFC committed $8.2 billion and mobilized an additional $3.9 billion through loan participations and structured finance for 299 investments in 69 developing countries. IFC also provided advisory services in 97 countries. For more information, visit
www.ifc.org
.
