4 December 2017

Mozambique: Government Dissatisfied With Revenue From Tourism

Maputo — The Mozambican government is dissatisfied with the revenue generated so far by tourism, declared Prime Minister Carlos Agostinho do Rosario on Monday.

Speaking at the launch in Maputo of the country's first Tourism Forum, Rosario said that revenue should be much higher, given Mozambique's vast and diverse tourism potential.

Currently tourism accounts for about 2.5 per cent of Mozambique's gross domestic product and employs 61,000 workers.

The Prime Minister regarded these figures as relatively low and as a challenge that called for greater commitment from tourism businesses. He wanted to see all stakeholders in the tourism industry displaying more dynamism in promoting the Mozambican tourism band.

“This GDP percentage is a challenge for all of us”, said Rosario, “since the country possesses enormous tourism potential, ranging from its beautiful beaches and coastal attractions, to the distinctive fauna and flora of the Mozambican ecosystem, and the rich history and culture of our people”.

He urged tourism companies to design more attractive packages for Mozambican citizens, since domestic tourism has the advantage of taking place throughout the year. Cultivating domestic tourism would bring in more revenue, he argued, and would encourage national unity.

Rosario said the government has been working to create a more favourable environment for investment, and as a result Mozambique has risen eight places in the index of competitiveness in travel and tourism, published by the World Economic Forum. Mozambique has moved up from 130th position in 2015 to 122 this year, out of a total of 141 countries assessed.

Among the government's priorities for the tourism industry, Rosario said, is the need to train continually the professionals who provides services in tourist establishments and in restaurants.

The Tourism Forum is an initiative of the Ministry of Culture and Tourism, as part of the government's drive to turn Mozambique into a world class tourism destination.

NEW BREWERY MAY CREATE THOUSANDS OF JOBS

The construction of a brewery by the Dutch company Heineken in Marracuene district, about 40 kilometres north of Maputo, will create 200 jobs directly and about 13,000 indirectly, during the construction and operational phases, claimed the Minister of Industry and Trade, Max Tonela, on Monday.

Speaking at the ceremony at which he laid the first stone for the new brewery, Tonela said construction would take about 18 months, and in the second half of 2019 the first beer from this factory will hit the Mozambican market. Construction of the brewery is costed at 100 million US dollars.

Tonela claimed that the Heineken factory would substitute imports, thus helping save foreign exchange and improve the trade balance. This claim is extraordinary, since beer is one product in which Mozambique is already effectively self-sufficient.

The Mozambican market for beer is currently dominated by a Mozambican company, Cervejas de Mocambique (CDM - Beers of Mozambique), which operates three breweries, in Maputo, Beira and Nampula.

CDM does not only brew traditional malt beers, but is also making beer from Mozambican raw materials - cassava and maize - in the Nampula brewery.

Not much beer is imported, legally or illegally. The contraband in alcoholic drinks consists overwhelmingly of wines and spirits.

Heineken is thus not taking any market share away from smugglers. Instead, it is muscling in on CDM's market, threatening to replace the distinctive Mozambican beers (such as 2M, Laurentina and Impala) with Dutch lagers such as Amstel.

For the first three years of operation, Heineken will also benefit from generous tax breaks. Currently, breweries pay the Specific Consumption Tax levied on luxuries and superfluous goods at the rate of 40 per cent. But under an amendment to the tax legislation approved last month by the country's parliament, the Assembly of the Republic, the ICE rate charged for new breweries will be 20 per cent in the first year, 25 per cent in the second year and 30 per cent in the third.

Despite these tax breaks, Tonela claimed “the implantation of this project in Mozambique will also contribute to broadening the tax base and to the consolidation of initiatives to promote the value chain”.

He added that the new brewery also fits into the government's industrialisation strategy with a view to the structural transformation of the economy and its insertion into the world market. Tonela also believes that Heineken, like CDM, will use local raw materials such as maize and cassava in its brewing, thus guaranteeing added value to Mozambican products.

The Heineken managing director for east and west Africa, Boudewijn Haarsma, told AIM that initially the brewery will produce 800,000 hectolitres of beer a year, and that its installed capacity will be 3.5 million hectolitres.

He claimed that the brewery will stimulate the national market and increase competition. Mozambican consumers “will have the opportunity to make new choices”, he said.

He said that by 2020 Heineken, in its African operations, hopes to raise the amount of local raw materials in its product from the current level of 50 per cent to 60 per cent. Haarsma believed this would improve the quality of the beer and lower its price.

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