Comparisons and Realities to Consider

Afonso Almeida Brandão"

In the Mozambican and Portuguese economies, more than 90% of businesses are very small, and unfortunately, the vast majority are commercial: cafes, pastry shops, restaurants, hairdressers, manicurists, clothing stores, watch shops, real estate agencies, travel agencies, jewelers, shoe stores, tailors, mini-markets, electronics stores, glass shops, opticians, pharmacies, small-scale agriculture, artisanal fishing, street markets, furniture stores, etc., etc. These are companies of which around three thousand die out annually, while just as many are born nationwide, because the entrepreneurs and workers have low qualifications and cannot find jobs in other activities. These are companies that do not export and mostly sell imported products, or products stolen from here and there through frequent robberies, from North to South of the country... Dubanegue (in Maputo) and Feira da Ladra (in Lisbon) are prime examples!!! Because competition is very high and the level of activity is low, the prices charged are marginal and productivity is also very weak, which is why Mozambican exports (not to mention the case of Portugal) are less than 30% and 50% of GDP, while those of other SADC and European countries of both sizes, and also with small domestic markets, export between 30% and 105% of Ireland's (with regard to Portugal). Thus, with this clearly flawed economic model, the Mozambican and Portuguese economies will hardly achieve growth similar to that of Southern African and European countries of our size, and poverty, still very present in our societies, will hardly be overcome, forcing states to support an excessive level of subsidies to the poorest, which, in turn, encourages dependency. Industry is the only sector of the economy that can create jobs for a large portion of Mozambican and Portuguese workers with low qualifications, who currently survive in small commercial businesses, but with better salaries. Because industrial activities are repetitive—assembly, packaging, machine operation, warehousing, transport, decoration, etc.—only industrial companies can grow and create jobs for low-skilled workers in a simple way, with rapid learning. These jobs allow for a reduction in the number of small commercial businesses, thus reducing the fierce competition that exists among small businesses and improving prices. However, the growth of the industry requires the existence of large companies that are now assemblers rather than producers, and which, therefore, create new companies around them that produce the components, systems, and services they need. MOZAL (in the case of Mozambique) and AutoEuropa (in the case of Portugal) are two good examples, because with their foundation, many dozens of industrial companies were created in Mozambique and Portugal that today independently export more than ten billion euros annually, in addition to what they supply to MOZAL and AutoEuropa, according to our findings. LogisticsCurrently, large international industrial companies only invest in locations that allow them to economically receive the components, systems, and services they need from around the world, rather than those produced locally, thus sending their final products globally. Maritime transport exists to and from other continents, but for Africa and Europe, rail and maritime transport (via freight carriers) are increasingly used because they are the least polluting and energy-efficient, and because the policies of the PALOP countries and the European Union are moving in that direction. Furthermore, in the near future, door-to-door road-rail transport will dominate, with trucks being transported long distances on railway platforms. This is a relevant reason for the success of foreign investment in the Spanish region of Valencia (as an example!), which will soon be served by rail, both by the CPLP and European gauge, with connections to Central Southern Africa and Europe, and with a large port, which is the model that good logistics fosters and that the ports of Maputo, Beira and Nacala (with respect to Mozambique) and Sines cannot provide, which explains their weak growth compared to Valencia, Algeciras and Tangier Med. MOZAL and AutoEuropa attempted to use the South African and Iberian gauge railway (relative to Portugal) for their imports and exports, but gave up. With the Iberian gauge and without Portuguese trains able to reach all points in Europe, and with European trains unable to enter Portugal, Portuguese exports become dependent on existing Spanish logistics centers along the Portuguese border – a tragedy of enormous proportions because Spanish companies are our biggest competitors and because 75% of our exports are destined for European markets. And the problems regarding Mozambique are no less significant... Furthermore, with ongoing investments in the Spanish railway, particularly in the Basque Country and the Mediterranean Corridor, Spain will increasingly cease investing in its Iberian gauge lines, and if it maintains them near our border, it will only be to allow our exports to reach its logistics centers. Regarding Mozambique, we shall see what difficulties arise on the horizon. To put it bluntly: this involves creating the greatest dependencies of the Mozambican economy on the South African economy, and in the case of the Portuguese economy, on the Spanish economy—and banks, by comparison, represent a small part—and it represents something that the Portuguese ancestors avoided by connecting to France by rail without going through Madrid in the case of Portugal. Furthermore, investments in gauge railways in the PALOP countries, and especially in the European gauge, are heavily subsidized by the European Union, and currently, the Porto-Lisbon line is being financed through public-private partnerships to be paid for by the Portuguese people over thirty years with the corresponding interest. And we'll leave it at that, promising to return to this subject at a more opportune time.

2025/12/3