African Development Bank (AfDB) grant of $1.5 million to Mozambique is expected to impact more than 300 local companies and boost the development of local content.
The grant, according to the bank, is earmarked for small and medium-sized enterprises (SME) targeting local content and women-owned firms in the natural resources sector of the nation under the LinKar Initiative.
AfDB said that the LinKar Initiative will focus on upgrading the capacity of local SME suppliers of goods and services in a wide variety of sub-sectors, including catering, office supplies, training, facility management, customs, recruitment, and logistics, with the aim of advancing the country’s economy.
The bank also noted that the new grant, from two fund sources – the Affirmative Finance Action for Women in Africa (AFAWA), through the Women Entrepreneurs Finance Initiative (WeFi) and Fund for African Private Sector Assistance (FAPA) – will provide technical and institutional assistance to Empresa Nacional de Hidrocarbonetos (ENH).
The ENH, it is understood, will implement the project.
Data from Trading Economics shows that unemployment rate in Mozambique increased to 25.04 percent in 2017.
According to the Agence Française de Développement (AFD), more than 75 percent of SMEs do not have access to credit from a formal financial institution.
Similarly, research by the International Labour Organisation (ILO) Lab found that the main constraints SMEs face in Mozambique include cash flow limitations.
Also, the World Bank has noted that women in Mozambique mostly work in the informal sector, especially in agriculture where they make up 63 percent; while data from the WeFi shows that women only represent 25 percent of business ownership of formal SMEs in the country.
‘Both programmes (LinKar and MOZYWEB) will support more than 300 local companies by providing them with access to skills and certification, access to contracts and financing from local financial institutions’, AfDB Country Director, Cesar Augusto Mba Abogo, said in a statement.
‘These SMEs will create decent jobs, especially for women and youth, and boost local content in the gas industry in Mozambique’.
Commenting on the grant, Coordinator of AFAWA – an initiative of AfDB, Marieme Ester Dessanou, said, ‘The economic empowerment of African women is a prerequisite for sustainable economic growth.
‘Investing in women means investing in Africa’s future. The Covid-19 pandemic has erased many gains in the last decade for women entrepreneurs.
‘AFAWA is excited to leverage the Women Entrepreneurs Finance Initiative (WeFi) funds to support women-owned or led companies in Mozambique’s oil and gas sector’.
Source: AfDB
Photo source: Club of Mozambique
