Maputo — Mozambique’s Minister of Industry and Trade, Armando Inroga, and the visiting Norwegian International Development Minister, Heikki Holmas, on Thursday inaugurated the Maputo office of the Norwegian Investment Fund for Developing Countries (Norfund).
Norfund describes itself as “a hybrid company with limited liability, established and operated under special legislation, and owned by the Norwegian government, through the Ministry of Foreign Affairs”. It acts as an instrument of Norwegian development policy and the Norwegian parliament, the Storting, allocates annual capital grants to Norfund, as part of the development aid budget.
Norfund states that its goal is “to develop and establish profitable and sustainable enterprises in poor countries. The objective is to promote business development and contribute to economic growth and poverty alleviation”.
It says it “invests in markets where ordinary commercial enterprises are often reluctant to venture alone because of the high risk”.
Speaking at the Maputo inauguration, the Norfund General Manager, Kjell Roland, said “this new office underlines strongly our commitment to investing in agro-business in the southern African region”.
“To contribute better to long term poverty reduction”, he added, we are concentrating on sectors of vital importance for development, such as renewable energy, financial institutions and agro-business”.
He said that Norfund drew lessons from Norway’s own transition from being a poor country at the start of the 20th century to one of the richest nations in the world now. “The centre of Norway’s development strategy”, he explained, “was to invest in the generation of hydroelectric power, build manufacturing industry and introduce new technology to increase agricultural productivity. Our struggle against poverty was centred on creating jobs and income for the poor”.
Norfund’s activity, Roland said, “is undertaken in accordance with the fundamental principles of Norwegian development policy” – and for that policy “contributing to a fair distribution of wealth is an imperative”.
He was convinced that the creation of waged jobs in the formal sector of the economy “is the most efficient and sustainable way of contributing to inclusive growth and wealth creation. With job creation, the poor can stand up, and the unemployed can get out of their poverty”.
For job creation, “sustainable businesses must be developed. By investing in companies that create jobs, Norfund plays a central role in the top priority task of creating inclusive growth”.
Roland believed that agro-business has major job creation potential, “since it is labour intensive and meets the development needs of the rural areas”.
Even before the establishment of the Maputo office, Norfund had invested in Mozambican agriculture. Roland pointed to the Matanuska banana plantation in the northern province of Nampula, where 3,000 people are now employed.
“On my last visit to Matanuska, our contribution to poverty reduction was shown by the women workers in the fields”, he said. “Many of them had modern haircuts, and were wearing lipstick, while some even wore jewellery.
This was not the case three years ago”.
Norfund also supports financial institutions that provide loans to small and medium companies “which are the backbone of job creation”. Thus Norfund has been supporting two small Mozambican banks, Banco Terra and Socremo, which are prepared to take the risk of lending to small enterprises.
Holmas announced that a Norfund subsidiary, Agua Imara, will also set up a permanent office, responsible for all of sub-Saharan Africa, in Maputo.
Agua Imara is a company specialized in developing and managing commercial and sustainable renewable energy projects.