Deepening Integration in SADC - Fes-botswana.org

Mozambique has made remarkable progress in the area of banking
supervision.
The Bank of Mozambique is independent and autonomous in
pursuing its role. As part of the policy for sound macroeconomic
management, the Central Bank has not financed public expenditure
over the last five years.
The Government of Mozambique recognises the need to continue
with reforms aiming at improving the business environment for private
sector development. In this context, the ongoing actions aimed at (i)
reducing the cost of doing business; (ii) reducing the labour market
rigidities, and (iii) improving the quality of infrastructures deserve a
special attention. For the coming years, the Government of
Mozambique hopes to continue reforming the public sector, the
judiciary, and land management, so that land can be used as collateral,
which could contribute to the development of the agricultural sector
(Mozambique 2005b).
The reduction of the incidence of poverty has been the main priority,
addressed with some success in the last years. But some important
challenges lie ahead, including measures to expand the private sector;
increase competitiveness of Mozambican enterprises and of the
agriculture sector. The reform of the labour law has recently attracted
heated debates involving representatives of trade unions, employers
and government, given its potential impact on the private sector
development and economic growth.
The labour market manifests other weaknesses, mainly a shortage
of trained personnel as well as the concentration of skilled labour in
the south of the country. The IAF of 2002/03 indicate, for example,
that there are only about 230,000 people with higher education -
university degrees or more - in the country, and about one million
people who have concluded secondary education - representing 15%
of the labour force. It is also evident from IAF 2002/03 that 28.6% of
adults in the labour force with secondary or higher education - of
whom, 36.8% have higher education - are based in Maputo despite
the fact that the city can absorb only 12.1% of the total labour force
(DNPO et al 2003).
The Labour Law is cited as an obstacle to the development of the
private sector, including the agricultural sector, due to the high
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