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USAID’s program to increase labor-intensive exports will remove constraints to investment and trade by providing technical assistance, training, and capacity building to the Government of Mozambique and the private sector to: (1) increase international markets access for Mozambican products; (2) enhance Mozambique’s competitiveness by reducing the cost of doing business; and (3) increase exports in specific sectors such as tourism, garments, and horticulture. Activities will focus on improving the country’s trade policies; creating a more supportive enabling environment; and directly increasing exports in target sectors. Together, the three program areas - access to markets, a competitive low cost environment, and sector specific productive projects - are necessary and sufficient to achieve our objective of increasing labor intensive exports.
Some examples of the types of activities that USAID engages in under this program are:
- USAID is continuing our productive partnership with the Confederation of Mozambican Business Associations (CTA) through a five-year grant to advocate for reforms that fortify the progress made to date towards more liberal trade and an improved business climate. USAID is reinforcing CTA's capacity to advocate for a more competitive business environment. To this end, USAID is providing long and short term technical assistance to strengthen their analytical capacity and ability to prepare policy position papers on economic issues, business conditions, and proposed legislation.
- USAID assistance will foster policy reforms that are necessary to attract foreign and domestic investment to the tourism sector. These reforms include, but are not limited to: more competition in the air transport sector, improved land use regulations, and effective environmental protection laws. This activity will also develop selected tourism and eco-tourism products such as beach resorts and game parks that are typically labor intensive. USAID is entering into a Global Development Alliance with the African Wildlife Foundation to establish a community managed conservancy. The conservancy will be financed through tourism revenue generated from enterprises to be established within the conservancy, which is a 53,000 hectare (130,965 acres) site bordering the Great Limpopo Transfrontier Park and Conservation Area. The project will develop infrastructure, initiate conservation enterprises, and build capacity among local stakeholders to profitably manage wildlife.
- USAID is providing long- and short-term technical assistance to the Ministry of Industry and Commerce (MIC) to conduct trade analysis and to formulate and implement better trade strategies. Positive outputs will include greater understanding and appreciation among influential Mozambicans of the benefits of market openness, and increased awareness within government that successful exports are the cornerstone of growth, poverty reduction, and prosperity. With USAID technical assistance MIC will simplify rules related to commercial and industrial licensing, and introduce a simple and effective competition law. Because “economic literacy” in Mozambique is key to facilitating an improved enabling environment and good policies, particularly trade policies, USAID is sending Mozambicans from the private and public sectors to receive training in economics, trade, and related areas.
By the end of this program, USAID will have attracted new investments in targeted labor-intensive sectors through the combination of new openness to trade, lower transaction costs, and dynamic responses in selected sectors. The Mozambican government will also have achieved important policy milestones.
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