Kidnappings Cost Businesses Over 34 Million Dollars
Maputo, 28 Feb (AIM) – The ransoms paid to kidnappers have cost Mozambican business people at least 2.2 billion meticais (about 34.4 million US dollars), according to Agostinho Vuma, chairperson of the Confederation of Mozambican Business Associations (CTA).
Speaking on Monday in Maputo at the opening of a session of the Business Environment Monitoring Council, Vuma said “preliminary estimates in a study currently under way indicate that this criminal industry of kidnapping, by 2022, represented about 2.2 billion meticais extorted from business people”.
Organised crime, he continued, is expressed by terrorist raids in the northern province of Cabo Delgado, and the wave of kidnappings of which the business community is the victim. “The result is the flight of capital and the withholding of investment from the national economy”, said Vuma.
He urged the government to take decisive action to eradicate kidnapping, since security and stability are basic requirements to attract investment and to pursue economic activities.
Vuma took the opportunity to praise the progress made in the fight against islamist terrorism in the Northern Operational Theatre, which had led to formerly displaced people returning home, and a gradual resumption of business activity in parts of Cabo Delgado once infested by jihadist groups.
Vuma also expressed concern at what he regarded as a chronic problem – the failure of the government to pay invoices on time and to reimburse businesses for the Value Added Tax (VAT) paid when marketing goods.
These delays had a damaging impact on the financial situation of businesses, and made it difficult for them to comply with their obligations to creditors. “We expect that at this forum we can find a way out for this problem, which is affecting the business environment”, Vuma said.
Vuma proposed that the reduction in Corporation Tax from 32 to ten per cent, for agriculture, should be extended from the two years approved by the government in 2022 to ten years. He thought that ten years would be a sufficient time horizon “to create the basis for making the agricultural sector attractive and resilient”.
The head of the CTA’s agriculture portfolio, Arnaldo Ribeiro, agreed. He thought two years was too short, given that for some crops, such as macadamia nuts, the period from planting to harvesting can be seven years.
The Minister of Industry and Trade, Silvino Moreno, listed the challenges that the country had faced in recent years, including terrorism in Cabo Delgado, the Covid-19 pandemic, and the cancellation of Programme Aid by some donors. (The last named was an entirely self-inflicted wounds, since the donors suspended the disbursement of aid in reaction to the massive corruption scandal known as the case of the “hidden debs”). Moreno said the combined effect of these challenges was the re-orientation of the country’s immediate priorities.
He said Mozambique has ahead of it the challenge of industrialisation, so as to reduce imports, increase exports and improve the balance of trade, which should be a decisive factor in promoting national development.
“This is a task, not of the state, but of the private sector”, Moreno warned, although the government, through its own forums will remain open to discussing matters linked to attracting, strengthening and developing national and foreign direct investment.