US embassy cable - 05MAPUTO537

UNCLAS SECTION 01 OF 03 MAPUTO 000537 
 
SIPDIS 
STATE FOR EB/CBA - DWINSTEAD, AF/S - HTREGER, OES - JSTORY 
GABORONE FOR ECON/COMMOFF - HMARONEY 
GABORONE PASS TO SOUTHERN AFRICA GLOBAL COMPETITIVENESS HUB 
- AHILLIGAS AND VMONG-GAE 
COMMERCE FOR INTERNATIONAL TRADE SPECIALIST - RTELCHIN 
LABOR FOR ILAB - PWHITE 
MCC FOR SGAULL 
AID FOR DMENDELSON 
E.O. 12958: N/A 
TAGS: ETRD, ECON, EAGR, BEXP, BTIO, MZ, EINV, BFIF 
SUBJECT: SUCCESSFUL USG-SPONSORED FORUM ENCOURAGES 
MOZAMBICAN ENTREPRENEURS 
 
REF: MAPUTO 439 
 
1. Summary: On March 22-23 the Embassy and the USAID-funded 
Southern Africa Global Competitiveness Hub together hosted a 
business seminar - the Entrepreneurship Forum - in Maputo, 
attended by Mozambican university students, private sector 
representatives, and government officials, with outside 
speakers from the U.S., Ghana, Senegal, Zambia, Bostwana, and 
the Netherlands. The Forum's aim was to encourage potential 
and current entrepreneurs to capitalize on business 
opportunities in Mozambique and export markets abroad, 
including the U.S. Focus was given to the creation of a 
sound business plan, the choice of a competitive product, the 
profiling of target customers, the quest for technical and 
financial assistance, transport to foreign markets, and 
finding U.S. business partners. Overall, the Forum proved a 
great success in publicizing opportunities and technical 
assistance available for Mozambique's fledgling business 
community. Post is considering several follow-up actions. 
End Summary. 
 
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BILATERAL TRADE 
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2. Bilateral trade between the U.S and Mozambique is small, 
but growing. In 2004 the U.S. exported approximately USD 50 
million in goods to Mozambique. Exports included second-hand 
clothing, machinery, wheat, corn, milk products, footwear, 
and other miscellaneous items. Mozambican exports to the 
U.S. in 2004 only reached USD 10 million, and consisted 
mainly of garments, seafood, cashews, tobacco, and other 
agricultural products. 
 
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SETTING THE STAGE 
----------------- 
3. The Ambassador and the newly-appointed Minister of 
Industry and Commerce, Antonio Fernando, opened the Forum. 
The Ambassador emphasized growing commercial ties between the 
U.S. and Mozambique, including the entry into force of the 
Bilateral Investment Treaty and ongoing negotiations for a 
Millennium Challenge Account compact. She also called 
attention to the upcoming Summit of the Corporate Council on 
Africa, in Baltimore in June, and urged Mozambique to send a 
delegation. Minister Fernando outlined measures 
newly-elected President Guebuza (who took office in early 
February) would undertake to improve the business climate and 
attract greater investment. He focused on the need to 
continue Mozambique's record of rapid export-led growth (GDP 
growth has averaged nearly 8 percent per year for the past 
decade) to reduce poverty, particularly in rural areas - a 
key goal of the Guebuza government. Noting that increasing 
Mozambique's exports would depend on its private sector's 
competitiveness, Fernando stressed the necessity of improving 
domestic commercial policies, the desirability of gaining 
access to new international markets and called for the 
elimination of trade barriers. He encouraged Mozambican 
producers to research and understand quality control 
requirements for export to the U.S. and EU. He also 
encouraged donors to continue providing technical assistance 
to help Mozambican producers comply with international 
standards. Fernando ended by promising the Guebuza 
government would do "everything possible in its power to 
support entrepreneurs and businesspeople." 
 
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ENTREPRENEURSHIP IN VOGUE 
------------------------- 
4. The presentations by the three African entrepreneurs were 
received with considerable attention. The CEO of the Zambia 
Export Growers Association (ZEGA) presented a thorough 
account of the production and export of fresh 
horticultural/floricultural products from Lusaka to markets 
in Europe, South Africa, Australia, and New Zealand. The 
ZEGA example demonstrated the success of an association 
buying from hundreds of local producers. In addition, ZEGA 
succeeded because it was able to lobby the Zambian government 
for improved commercial policies and coordinate logistical 
arrangements for the packaging and exportation of vegetables, 
fruit, and cut flowers to international markets. The 
Ghanaian presenter, a true self-starter and the most 
energized participant at the Forum, described how he began by 
selling maize in the evenings after his day job with 
Unilever, and how his company grew into a much bigger 
business, now named Yedent Agro-Procesing. Yedent now 
supplies big name breweries such as Heineken, South African 
Brewing Company (SABCO), and Guinness. In fact, the World 
Food Program has recently become one of Yedent's biggest 
clients. The third and final non-Mozambican entrepreneur to 
present made his start processing yogurt in Senegal. Taking 
advantage of locally procured ingredients, his company, 
Yaourtjaboot, now processes and distributes domestically to 
the Senegalese market. 
 
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MOZAMBIQUE SUCCESSES 
-------------------- 
5. Following these three entrepreneurs, a panel of four 
Mozambican business leaders shared stories of their 
successful operations. One spoke of the resurgence of the 
cashew sector through the help of technical and financial 
assistance provided by several NGOs, including the U.S. NGO 
Technoserve. He reported that Mozambique growers recently 
have agreed to a brand name for all of their cashew nuts, 
"Zambique," in an effort to stimulate greater interest in 
their product in Europe and the U.S. Zambique cashews are 
sold in the U.S. through a distributor in the Netherlands. 
Similarly, another panelist noted the considerable growth of 
Mozambique's shrimp aquaculture industry. In January 2005, 
the first boxed, frozen aquacultural shrimp from Mozambique 
arrived in the U.S. By the end of February 75 tons had 
entered the American market for distribution to Tasty Choice, 
Wal-Mart and other food companies (septel). 
 
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U.S. HELP 
--------- 
6. The Forum also featured speakers from the Corporate 
Council on Africa, the U.S. Department of Commerce, and the 
Southern Africa Trade Hub. They all highlighted 
opportunities for U.S. financial and technical support, 
market opportunities, business linkages, and networking 
events. On the second day, a business consultant gave a 
hands-on presentation on creating a sound business plan, 
choosing a competitive product, and profiling of target 
customers. 
 
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WHAT'S NEXT? 
------------ 
7. To maintain the enthusiasm and strong interest generated 
by the Forum, Post is considering a variety of follow-on 
steps, including: 
--Establishing a "Business Plan Competition." The 
competition would involve inviting business students to 
participate in a USD 25,000 scholarship competition for the 
best business plan. The plans would be judged by an 
independent group of business consultants, and the winner 
would receive the money to implement his/her plan. 
--Identifying a group of Mozambican farmers to visit ZEGA 
facilities in Zambia. Post would call on the U.S. NGO 
Technoserve to identify Mozambican agricultural producers 
most likely to benefit from a visit to ZEGA facilities. ZEGA 
officials would show them how they achieved high quality 
standards and now successfully export to world markets. 
--Working more closely with the Southern Africa Global 
Competitiveness Hub. As a follow-on to the Forum, the Hub 
has agreed to provide technical assistance to the seafood 
industry in Mozambique so that fishermen are able to comply 
with environmental and phytosanitary requirements to export 
prawns, lobster, and fish to the U.S. The Hub is also 
considering how to assist in increasing demand for Zambique 
cashews in the U.S. and Europe. Post will continue to liaise 
with the Hub on visits by U.S. companies. Recently GE 
Transportation and Rail and Anadarko (oil and gas) sent 
exploratory delegations to Mozambique, and Post expects a 
visit by the bridge building company, Acrow Bridge, in May. 
 
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CORPORATE COUNCIL ON AFRICA SUMMIT 
---------------------------------- 
8. Post is already working alongside the Mozambican 
government on organizing a government/private sector 
delegation to the Corporate Council on Africa's U.S.-African 
Business Summit in Baltimore this June. President Armando 
Guebuza will lead the delegation and is scheduled to address 
the Summit on agribusiness issues. To date, representatives 
of Mozambican businesses in agribusiness, fisheries, 
manufacturing, and energy and power sectors have confirmed 
their attendance. 
LALIME