11 August 2009

MINUTES
Date of Meeting 11/08/09, 9am
Place of Meeting Italian Cooperation – GBS office, Rua Damião de Gois, 523, Maputo

Agenda
1. Welcome note, by Italian Cooperation
2. Updates on the recently approved “National Inspection for Economic Activities”, by MIC
3. Updates on the extension of the Pre-Shipment Inspection program, by MIC
4. Presentation of the 2009 Business Confidence Index, by KPMG
5. Debrief on the Private Sector Regional Conference –South, by CTA
6. Debrief on the PARPA II evaluation: Private Sector Indicators, Tax Policy and Financial Sector Studies, by Cimpogest and Italian Cooperation
7. Debrief on Trade and Investment Conference, by US Embassy
8. AOB

Minutes
1. Welcome note, by Italian Cooperation

  • - Dario Milano, chair of the PSWG, welcomed every body in the general budget support programme office of the Italian Cooperation for the first PSWG regular monthly session under the chairing of Italy.
  • - As chair of the group, he committed himself to make all his efforts to improve the quality of the meetings. He also expressed his confidence on the high level of interaction and high quality of contribution from PSWG members, maintaining the same level reached during the US chairing.
  • - As a first step, he suggested some minor changes which could boost productivity and results. This may include:

(i) Creation of an independent and sustainable PSWG website;
(ii) Introduction of thematic meetings on tourism, infrastructure, energy, agribusiness, fishery, etc;
(iii) Implementation of the troika mechanism in the PSWG and Trade Sub Committee;
(iv) Revision of the ToRs of PSWG to clarify some issues and remove existing gaps.
(v) Clarification of the role of the Trade Sub Committee and its relationship with the PSWG and the Enhanced Integrated Framework.
  • - In order to avoid that the increasing the number of meetings would become a further burden to the group members, he proposed a discussion in the next regular monthly PSWG meeting at the beginning of September. Currently, Italian Cooperation is preparing a concept paper for the website and a proposal of the PSWG ToRs.
  • - Regarding the chairmanship of the PSWG and TSC, Dario Milano announced that Italian Cooperation met some donor agencies in order to identify possible incoming member of the Troika of the PSWG and a new chair of the Trade SC.

2. Updates on the recently approved “National Inspection for the Economic Activities”, by Ministry of Industry and Commerce (MIC)

  • - The Government of Mozambique, seeming to be reading from the PSWG script, approved recently the decree that creates the “National Inspection of the Economic Activities” coordinated by the Minister of Industry and Commerce. Therefore, José Rodolfo, General Inspector of the Ministry for Industry and Commerce, has debriefed on this issue with the support of a brief presentation (attached) which focuses on (i) the problem behind the need to merge different economic inspections into a single institution, and (ii) the main possible solutions that were under discussion in the technical committee during the last months.
  • - He indicated that only nine inspections were merged into the INAE, namely: industry and commerce, tourism, energy, transport and communication, fishery, natural resources, environment, health, education and culture. Finance, agriculture, and labor will remain out of the INAE but under the umbrella of the “Conselho Coordenador das Inspecções das Actividades Económicas” (CCIAE) which aims at ensuring the coordination among all economic inspections in the country.
  • - In reply to the request from Rosário Marapusse (Italian Cooperation), the General Inspector of MIC confirmed the absence of a calendar to integrate the three inspections that remains out of INAE. Nevertheless, he highlighted the government commitment to set up a single inspection in the country.
  • - Currently, the center of gravity settles around the implementation of the decree that creates INAE taking into account, among other issues, the challenge of stamping out various inspections toward just one inspection building. Actually, José Rodolfo, inquired by Steve Dills from UNIDO, confirmed that the creation of INAE will imply a physical shift of the current inspections from the different Ministries into one common building. However, he clarified that some Ministries will keep their inspections on non economic issues (e.g. Health sector).
  • - For the Confederation of Economic Associations of Mozambique (CTA) representative, Nelson Jeque, the creation of INAE rewards the heated discussion on the inefficiency of the private sector due to the high burden from the several inspections currently undertaken per year. Nevertheless, he seemed slightly optimistic on the effectiveness of this reform.
  • - In general, for the PSWG, the creation of INAE is a great sign that illustrates that Mozambique, although slowly, is moving toward the facilitation of small business that can operate without running the gauntlets of the inefficiency and bureaucracy in the public sector and therefore, avoiding bribery.

3. Updates on the Extension of the Pre-Shipment Inspection Programme, Tax Authority of Mozambique (AT)

  • - The Tax Authority of Mozambique (AT) representative shared with the group the main reasons that influenced the extension of the Intertek support to Mozambique’s Pre-Shipment Inspection (PSI) Programme for further two years and, therefore, being the sole provider of the PSI for exports to Mozambique.
  • - The reasons are: (i) ensure the payments of the correct import duties, (ii) reduce the risk of imports of sub standard or illicit goods, (iii) build capacity of the human resources at AT through trainings and other consultancies. She emphasized the need of prioritizing the improvement of internal capacity (e.g. by improving the quality of human resources and developing domestic laboratories for inspections) before eliminating the PSI.
  • - Nevertheless, she stated that AT will continue reviewing the list of goods that must undergo PSI, taking into account the different points of view on PSI within the private sector. Actually Nelson Jeque, from CTA, mentioned the fact that CTA is still working with AT in order to progressively reduce the number of goods listed in the “lista positiva” (attached) submitted to PSI.

4. Presentation of the 2009 Business Confidence Index, KPMG

  • - The presentation of the 2009 Business Confidence Index was postponed to the next PSWG meeting due, to the absence of the KPMG representative.

5. Debrief on the Private Sector South Regional Conference, CTA

  • - Nelson Jeque made a debriefing on the fourth Private Sector South Regional Conference held in Vilanculos on July 16th and 17th. He highlighted the main conclusions and recommendation in the following categories: business environment, agribusiness, transport, commerce, tourism and support to the private sector.
  • - In the presentation attached, he mentioned the creation of the Provincial Entrepreneurship Council (CEP) in Maputo, Gaza and Inhambane provinces complementing the already existing CEPs in other provinces. According to him, it is expected that the CEPs will improve the dialogue between private and public sectors at local level.
  • - Reacting to the CTA presentation, Dra Domingas Muchine, from MIC/GASP, raised her concerns on the need to (i) revise the approach adopted for the private sector conferences as it seems to be nonproductive, (ii) identify some bottlenecks for the private sector development within the private sector, (iii) complement the existing dialogue between private and public sectors with a more ambitious partnership, (iv) address to AT all private sector claims on the tax issues, raised during the conference for clarification.

6. Debrief on the PARPA II evaluation: Private Sector Indicators, Tax Policy and Financial Sector Studies, by Cimpogest and Italian Cooperation

  • - Ken Gunn summarized the main findings of PARPA II pre-evaluation on Private Sector Indicators focusing on the evaluation results, the drivers and obstacles to achieve the desired performance, the recommendations to improve the performance of PARPA II and proposed indicators for PARPA III.
  • - In general, the report (attached) evaluates the progress made and the obstacles found within the framework of the private sector matrix of strategic indicators for the period 2006 to 2008. It also proposes indicators for PARPA III.
  • - In addition, Rosário Marapusse updated the group on the deadlines to finalise the process. To consider the exercise finalised at group level, the report needs the approval of the key economic sectors such as tourism, natural resources, fishery, INNOQ.
  • - He announced the upcoming relevant meetings: (i) the economic development pillar meeting to discuss all available reports from the economic development sectors – August 12th; (ii) the plenary meeting (similar to the PAFCoG) in early September to present the pillar reports that have to be submitted by August 28th.
  • - The group agreed on postponing the deadline for comments up to August 14th as till now no comment was received.
  • - On the related specific studies, namely, the tax and financial sector studies, Rosário Marapusse informed that the final draft of the tax study conduced by Bruce Bolnick (Nathan Associates), will be available by the end of the week while the financial sector study, conducted internally by the World Bank, will be available for comments in around two weeks time. Both studies should be finalised by the end of the month.

7. Debrief on the Trade and Investment Conference, Embassy of the United States in Maputo

  • - The US representative debriefed the PSWG on the U.S. Trade and Investment Conference held on July 15th and 16th, organized by the Embassy of the United States in Maputo. According to him, the conference aimed at informing U.S. companies about business opportunities in key sectors in Mozambique. Over 150 people participated in this event among which Mozambican President Armando Guebuza, various key Ministers and over 30 US companies.
  • - Moreover, the Mozambique-United States Chamber of Commerce (CCMUSA), the U.S. Departments of Commerce and Agriculture, the U.S. Agency for International Development, Millennium Challenge Corporation and other agencies, along with representatives of U.S. companies already operating in Mozambique shared best practices and discussed their experiences in doing business in this country.

8. AOB

  • - Dra Domingas Muchine announced that MIC in coordination with the Tax Authority of Mozambique, CTA and the SADC Secretariat, will undertake a training course on how economic actors can report their problems regarding the non-tariff barriers within the regional trade. The training will take place on August 14th, in Maputo.
  • - As a follow up to this announcement, MIC will come back soon to the PSWG to request a technical and financial support to the phase II of the process that aims at disclosing all the rules and non-tariff barriers within the regional trade through different channels (e.g. a green line).
  • - MIC believes that this initiative will unleash many companies that are not currently benefiting from the trade liberalization.
  • - Dario Milano invited the group members to submit candidates as focal points. He volunteered himself to be the focal point of the Economist Working Group while Rosário Marapusse did the same for Agriculture Sector. MCC promised to invite Government representatives to share with us relevant land issues for the private sector. Jaime Comiche from UNIDO proposed the chair to indicate each group member as focal point according to the project or institutional orientation.
  • - The next meeting is scheduled for September 14th, 2009.
  • Annexes - Presentation on the National Inspection for the Economic Activities
  • - Decree that approves the National Inspection for the Economic Activities
  • - List of products subject to PSI – “ Positive List”
  • - Presentation on the Private Sector South Regional Conference
  • - PARPA II pre-evaluation draft report: Private Sector Indicators

Download meeting minutes, presentations given at the meeting and other background material here.

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