The Mozambican Association of Industries (AIMO) believes that the government’s decision to monopolize the import of cereal, particularly rice and wheat, could cause a negative impact on companies dependent on external raw materials. According to the government’s decision, the cereal imports, particularly rice and wheat, must only be carried out by the country’s Institute of Cereals (ICM) in order to “combat practices such as over-invoicing, illegal currency outflows and duplication of invoices in the import process for these products.” In a statement, AIMO claims that the government’s measure will force the companies to lose their autonomy, resulting in increased costs and the risk of stock shortages if there are delays in procurement, financing or customs clearance processes. “AIMO acknowledges the government’s strategic objectives, namely strengthening control over foreign exchange outflows, combating over-invoicing and duplicate invoicing, as well as the need to ensure the stability of domestic supply.
However, the effectiveness of the measure will depend on transparent, predictable and participatory implementation, involving the private sector in defining technical and operational procedures”, reads the statement. The association also warns of constraints on companies’ financial planning, as they will have to adjust their working capital management models, foreign exchange exposure and predictability of delivery times. “We are not aware of any industries that we represent being associated with the irregularities pointed out by the government.
We believe that these companies manage the industrial sector’s import operations rigorously. It is necessary to distinguish between possible offenders and operators who fully comply with the law”, reads the document. In order to minimize the measures n negative impact, AIMO calls for adoption of a model that would control the import chain with competitiveness, stability and sustainable growth in the industrial sector.
Read Full Article on Club of Mozambique
[paywall]
“However, we are committed to cooperating with the government. The predictability of public policies is crucial to ensure investment, employment, and competitiveness. The association also assures that it will monitor the implementation of the measure, consulting with industrial companies to assess its impact”, reads the note.
For its turn, the country’s Confederation Business Associations (CTA) believes that the government, through the ICM, does not have the capacity to handle cereal imports. “Each importer has its own supplier and knows its raw materials. While the ICM does not have the necessary expertise to carry out procurement and ensure the same quality that some importers currently guarantee.
The ICM cannot regulate and, at the same time, be responsible for imports”, CTA said. According to the association, the measure could lead to inefficiencies, increased product prices and even the closure of some companies. “Companies that are able to pass on the costs to the end consumer will do so.
Those that are unable to do so may close down. We will be faced with a market in which the only seller will be the ICM, with no room for price negotiation, as is currently the case with international suppliers.”
[/paywall]
