Mozambique: On Reform Path

Recently, the Doing Business team visited Mozambique, and saw first-hand its path of reform and new policies to ease doing business. Last year Mozambique climbed 6 spots on the global Doing Business ranking, from 140 to 134. In 2006 a new commercial code was implemented. The new code increased minority shareholders protection and made it easier to hold directors and controlling shareholders liable for misconduct. In SADC, only South Africa has better regulations for protecting minority shareholders.

Mozambique also recently passed a new labor code. This is likely to have a positive change to its ranking on the Doing Business employing workers indicator.  The maximum duration of term contracts was extended to 72 months (that is a term contract of up to 2 years renewable twice), allowing workers and employers increased employment options. Mozambique is slowly making its labor market more flexible.

There is much reform to be done, and the Ministry of Industry and Commerce is full of initiative, as are other government ministries and agencies. This year expect to see:

• 181 new staff in the courts, including 22 judges. They have also created the function of judge administrators, which should help speed up judicial processes.

• implementation of a new fiscal code – and by the end of the year they want to make it possible for entrepreneurs to file their taxes online

• possibly a new bankruptcy code.

We look forward to seeing Mozambique climb the rankings!