Business Advisory Working Group Mozambique

Transcription

1 Business Advisory Working Group Mozambique MEETING MINUTES Date of Meeting: 20 November 2014 Place of Meeting: Maputo, Southern Sun Time: From 8h30 to 13h. Agenda 1. Welcome and Introduction By: BAWG Chair 2. Review and Approval of Minutes By: BAWG Secretariat 3. Presentation and Discussion of Group Challenges in relation to Land / DUATs By: BAWG Chair and Co-chair 4. Financial Services for the Group By: Banco Terra 5. Review of the food fortification draft regulations By: USAID/SPEED 6. House Keeping Issues a. BAWG Revised Concept Note / ToRs b. BAWG Results Based Work Plan (Hot Topics for Follow Up) c. Date and Place of Meeting Any Other Business (AOB) An initiative under: With the support of: &

2 Support Documents Participants Working Language: Minutes 1 The following documentation was made available to all participants, prior and during the meeting: 1. BAWG Meeting Minutes Nº 1 2. Programme Document on Food Fortification 3. Banco Terra Presentation for the Group 4. BAWG Concept Note / ToRs 5. BAWG Results Based Work Plan The meeting gathered 11 companies who are signatories of the LOI. Other participants included representatives from CTA, USAID, SPEED, Grow Africa, CEPAGRI, MINAG, Banco Terra, IDH Sustainable Trade and other institutions also did attend the meeting. Full list of participants can be found in Annex I. The meeting was held in English, as this is the group s working language. There was simultaneous translation English-Portuguese-English. Mariam Umarji from MB Consulting moderated the meeting. She kicked off by welcoming and thanking everyone for the presence and participation in the meeting. There were no other businesses added to the agenda. 1. Welcome and Introduction By: BAWG Chair The BAWG Chair, Shaun Cawood welcomed all the participants and invited each participant to introduce himself to the group (name, company and area of activity). 2. Review and Approval of Minutes By: BAWG Secretariat The facilitator Mariam Umarji presented the Minutes of the first BAWG meeting held on 12 th September 2014, which was approved without objections. She explained that in the last meeting various difficulties were presented by the LOIs companies in running business in Mozambique and as it was not possible to address all the issues, they selected some considered as "key 2 to be discussed in next BAWG meetings in detail. Access to Land/DUAT (Direito de Uso e Aproveitamento de Terras) was chosen as the key issue to be discussed in the current meeting. 3. Presentation and Discussion of Group Challenges in relation to Land / DUATs By: BAWG Chair and Co-chair The BAWG Chair asked each company (LOIs signatory) to present the problems faced in relation to Land/DUATs. Below is a summary of the difficulties presented: Chokwé - Banana Plantation Company: Has no permanent DUAT, the temporary DUAT was extended twice, despite employing 500 people. The Provincial Government of Gaza says it will issue the definitive DUAT only when all the area of land is being used (or about 800 ha). There are companies with 1 These minutes are a summary of the key aspects discussed and key interventions. More interventions than reported have occurred during the meeting but are presented in a summary format. 2 In the first meeting each participant was called to present (in order of importance) 3 areas that where impeding their development in the country. Page 2 of 6

3 definitive DUAT but not investing. Banks ask for guarantees and they do not fund companies without having a final DUAT. Cahora Bassa - Chicoa Fish Farm: Have a provisional DUAT after 2 years and it is still waiting to get the permanent one. The company is not comfortable to start any work without permanent DUAT. In addition, the representative noted that the processes in Mozambique are very slow with significant transaction costs. It takes long to start a business - reduces the competitiveness of Mozambique. As an example, in Zambia, we can get the equivalent to definitive DUAT in just a month, he concluded. Others issues raised by participants: there is need for more access to information on land availability; there is no registration of free spaces/cadastre; how to proceed with companies that does not produce/not using the land but has the definitive DUATs? The group chair, Shawn Cawood, spoke about his company, which had the same problems in getting DUAT for 2000 hectares of land in Tete. The solution was to divide the land into two blocks and request by plots. That was a strategy of making the process more flexible. People are afraid to invest because in absence of definitive DUAT with a risk of losing the entire investment. I am part of a medium enterprise and it is very difficult to obtain financing. But once one has a definitive DUAT things get less difficult. The bureaucratic processes in Mozambique require patience. Guillermo Machado from ETG (LOI company) noted the importance of realizing the logic and concern of the government. Some people apply for large extensions of land with the sole objective of selling it out. For that reason, government staff is suspicious of applications for huge plots of land. Carlos Mabule from SPEED: land cannot be used as collateral because according to the constitution the land belongs to the state. And the government has the power to transfer the DUAT to the third parties (pass the DUAT to those who have power to invest). Lúcia Luciano, Director of Economy, National Directorate of the Ministry of Agriculture (MINAG), concurred with other participants who remarked the following points: Government is monitoring land concessions that are given to investors and they are not using it. The monitoring process is aimed to allow government to transfer the land not in use to other potential investors really want to produce; Most of the time, investment plans submitted to government do not have complete information, e.g.; access to finance; There is a law to be implemented, if there is no use of land in two years, the government withdraws the DUAT; Provisional DUAT's are provided more easily but the permanent ones depend on what is being done in the interim. There is a land cadastre in MINAG but it is not available to the public. According to CEPAGRI s representative, Sérgio Covane, obtaining DUAT is really a problem but the waiting time has been significantly reduced. The strategy explained by Shaun Cawood of dividing the land in small portions is good and it does work by reducing time and Page 3 of 6

4 allowing flexibility. Sometimes MINAG receives applications for big plots of land, but after analysis government finds that the proposed project could be done in a smaller area. Mr Covane announced that CENACARTA is doing a mapping of free areas; DNTF has a department that holds a list of areas with definitive and provisional DUATs. And the area is being improved and there are situations that hinder this mapping such as the "land occupations in good faith." These are where families live for many years without a DUAT. BAWG chair thanked everybody for the debate and interventions. The participants then agreed in the following: (i) To send a summary table to MINAG with a detailed information on the difficulties of each company in each province and this will be sent to the MINAG in order to facilitate and follow up to their problems; (ii) MINAG has to advance information to the provinces and establish a period to have this info available. Disclose LOIs by Province sending a letter to each Provincial Directorate of Agriculture; (iii) Suggested identification of land mapping using different colours, for example, yellow for occupation in good faith, green for LOIs with DUAT, red for LOIs without DUAT, etc. to have reports on that. In provinces where there are more investments of LOIs, there should be more access to information; (iv) Suggest MINAG to make public the land cadastre it has. They can even publish it on a regular basis and by province. The representative of MINAG agreed to follow up on this point and said they will try to coordinate at provincial level the situation of each company taking into account that there is an accessible database only available to government officials. 4. Financial Services for the Group By: Banco Terra (José Jeje) José Jeje from Banco Terra did a presentation on the bank s services on agribusiness. The presentation is in Annex II. The following points were highlighted: To fund an investment, Banco Terra requires a DUAT of at least five (5) years but government only offers provisional DUAT's which contradicts with the requirements of the bank; It also requires the Infrastructure registration, but again without DUAT that is difficult to obtain; There must be sufficient guarantee for the financing of the Bank, the contract and the existence of a company is not enough; The Bank has to analyse all the risk involved in the investment; The Bank need a solid guarantee, if the investment does not work the bank needs a backup; interest rates are high and they do not allow sustainability of small farmers; There is no relation between central bank s interest rates those from the commercial banks; The companies could not agree with the existence of subsidized interest rates in the Banco Terra; In any Bank, the time and process are very long and the introduction of simple measures such as a full check list of all the Page 4 of 6

5 required elements to access the loans could be shorten the procedures. Mariam Umarji summarized the morning discussion, welcomed the CEPAGRI Director, Abdul Cesa and introduced the SPEED-USAID consultant for the next point of the agenda - food fortification. 5. Review of the food fortification draft regulations By: USAID/SPEED Carmen F. Forsman, consultant SPEED-USAID consultant presented an analysis of the Fortification Staple Foods in Mozambique. The presentation is in Annex III. From the presentation the following should be highlighted: In Mozambique, people do not have much access to nutrition; This fortification will add quality to food; The fortification standards should be carried out seriously and the private sector can help monitor the consumption of these products; Plan is not realistic in Mozambique - products from other countries have different technical standards; Need for fortification of this legislation to add value to the products to be exported and increase bargaining power with exporters To implement this program a cost assessment is required; The Government should bear a social responsibility to educate consumers to consume foods with more micronutrients. Fortification requires the using of logo. 6. House Keeping Issues The facilitator introduced the representatives of CTA in the meeting and suggested them to invite this group to CTA discussions on the subject. CTA was represented by Tatiana Marla, who thanked the organizers and said they are open to suggestions and new working dynamics. a. BAWG Revised Concept Note / ToRs The facilitator, Mariam Umarji, spoke on group's composition concept note and its terms of reference discussed in the first meeting. And no changes were made to the Concept Note. Rosário Marrapusse, representative of SPEED Program, requested reports or feedback from the companies of the meetings in order to make the group more dynamic. Nelson Guilaze, economist from USAID gave a briefing on Private Sector Working Group (PSWG) which discussed many aspects related to policies and said that PSWG can accept and discuss some of the BAWG issues. The facilitator requested the companies to be more active by sharing more information, commenting on the Basecamp and making available additional information from other provinces and other countries. b. BAWG Results Based Work Plan (Hot Topics for Follow Up) Mariam Umarji asked what the group wants to change or see changed from one meeting to another. Suggested write a letter to CEPAGRI, detailed LOIs companies and their problems. The following actions Page 5 of 6

6 Annexes: were determined for follow-up: Circulate a paper for each company for them to detail difficulties in this area (RESPONSIBLE MB Consulting) Draft a letter to MINAG/CEPAGRI on clear problems of each company and detail company information (RESPONSIBLE - SPEED with MB Consulting assistance) A letter from CEPAGRI and MINAG to the provincial directorates of agriculture explaining that these are the LOIs companies in these provinces, and also describing the New Alliance and its objectives (RESPONSIBLE SPEED). c. Date and Place of the third meeting (Meeting 3 in 2015) The group agreed that the next meeting will be held in February, date, time and place to be circulated in due time. The following suggestions were given for the next meeting: Next meeting will address the Labour Law; Some participants suggested the participation of other banks to deliver presentations and participate in the discussions; At each meeting, each company will talk about what it does and the successes achieved (a company working in the production of cassava offered to share its experience in the next meeting); 7. AOB CTA shall be included in the communication list (Tatiana Marla); CTA will send with existing association and their vocations - Become a member of some associations, facilitates some procedures (Tatiana Marla); The Group can discuss on the liberalization of regional trade but not limited to SADC. ANNEX I: List of Participants ANEXO II: Banco Terra Presentation ANEXO III: Fortification of Stample Foods in Mozambique Page 6 of 6