Since this was also a case for medicines, one should also be careful of the problems that may come up. Module-9

1. Staffing

What has been stated earlier is that it would be better to leave the enterprise to operations by South Africans and in that case, they will determine most of the staffing. It is not advisable clearly that many Mozambicans be depended on for operations at least due to their ability. An example of this has just been stated.

2. Training and Development

When we are talking about a business and a possible collaboration with an existing business owner, they would have completed the training in an operating business. This would be helpful as the culture of South Africa and Mozambique would be similar. The operations there are different from the operations in U.S.. Businessmen met at a private sector conference in the northern Mozambican city of Nampula have criticized the tax administration for its systematic failure to refund Value Added Tax -- VAT in due time. The highly respected business leader Kekobad Patel, who has been appointed by the Confederation of Mozambican Businesses -- CTA to deal with tax and customs reform, stated that the current tax administration is ineffective, arbitrary and likely to have corruption. Jorge Pereira is one of the leaders of the Nampula Commercial, Industrial and Agricultural Association -- ACIANA and said very simply: "This way it is not possible to have investment." (Businessmen Fume At VAT Refund Delay) The training for operation in Mozambique has to be received there.

3. Performance Appraisal

In a country like this performance consists of keeping the business running after satisfying all the legal authorities and still making money. This requires only practical experience.

4. Compensation

This question can be answered only after a decision is taken on location of the business, situation in surrounding business, and the performance of the business. Considering the nature of the people as is clear from various comments, fixed salaries should be low with a high bonus component, as that will probably make the staff work. There should also be an efficient and effective method of checking on stock, as otherwise it is likely that a lot of untoward incidents like theft of stock will occur.

Module-10

1. Economic and Financial Risks

It is doubtful from the examples given that a business there will be able to make much money, unless it is connected to an industrial operation and a large group of people are compelled to purchase their requirement from the business and pay in a manner which will not permit them to do anything about the payment. It is not that medicines are not required, but the people cannot buy it. There are now 91,000 children below the age of 15 having HIV in this country. By June of the current year, 500 children were registered on the government's free program, which was called as the ARV treatment program. At the same time more than 60-000 children who were 14 and below are considered to be in need of the drugs. AIDS is slowly becoming one...

There were 97,000 people who died from Aids-related illnesses in the year 2004, and of them 17,500 were children below the age of five. An average of 500 new HIV infections is taking place every day, and of them 90 are children who get the virus from their mothers. Mozambique has an HIV prevalence of 15.6%, according to the government figures, but who pays for their requirement of medicines? (Mozambique's Aids Children Slipping Through the Cracks)
2. Social and Cultural Risks

The risks are for the people employed in the business and the greatest danger is from AIDS.

3. Political and Legal Risks

The country is not a stable country and there are events that cause trouble like floods in 2000 and 2001. These events cannot be controlled, and there are also political risks as the country has a lot of diamonds and oil within the soil, but the individuals are not really interested in taking a long-term view. The people have to improve their outlook.

4. Risk Management Techniques

Risk management here is a matter to be learned and that can be learned only within the country. It may take a few years during which a person may incur losses, but that is the only practical learning method.

Conclusion:

It is a good country for a visit but setting up a business there takes generations for individuals to understand the difference.

Map

Retrieved from: Mozambique-South Africa - Investment climate generally favorable, new report)