A critical analysis of Mozambique with specific reference to assessing the opportunity for a development in the clay brick industry

Owen, Patrick Hugh Thomas ; Surmon, Douglas Campbell (1992-12)

Thesis (MBA)--Stellenbosch University, 1992.

Thesis

ENGLISH ABSTRACT: Development in the world and particularly in South Africa has resulted in change. This presents new opportunities and challenges to today's managers and entrepreneurs. As a result of our local political reform process, together with the collapse of the Soviet Union and the general deterioration of communistic ideologies, south Africans are experiencing a growing acceptance back into the world and neighbouring African communities. south African businessmen are faced with opportunities in foreign countries, especially neighbouring African countries, with South Africa cited as the key to Africa. The problem South African managers face, is how to evaluate opportunities in a neighbouring African country and to ascertain the type of trading conditions in that country. After eighteen years of communistic rule and ten years of civil war Mozambique is amongst the poorest countries in the world. World aid programs have come to the country's assistance, introducing economic recovery programs as well as replacing the out-dated socialistic ideas with western style free market principles. Although the country is suffering the effects of an ongoing civil war, indications are that a peace settlement is imminent. The Mozambique government has .introduced an attractive foreign investment package which is aimed at attracting foreign capital. A first impression indicates that this country is ready for foreign investment and exploitation, but is it? This research proj ect firstly evaluates existing feasibility models in an attempt to find a suitable model to assess the feasibility of investing in a clay brickworks located in Mozambique. Failing to find such a feasibility model, a suitable model is then presented. The feasibility model presented takes a holistic approach, acknowledging that first world structures, such as a financial or transportational infrastructure, should not be assumed to exist. The model is divided into two parts, the first evaluating the macro parameters of the country and the second evaluating the micro parameters or specifics of the opportunity. The assessment of macro parameters is divided into five sections, namely, socio- cultural, political, economic, technological and physical parameters. After the completion of each section parameters are summarised and graded. At the end of the macro parameters, an interim evaluation is required to assess whether the country is favourable for investment. If the investor believes the country is ready for investment, the following section covering the micro parameters is investigated. If, however, the investor believes that the country is not suitable for investment then further analysis is suspended. The second section which covers the micro parameters is also divided into five sections, namely, financial, manufacturing, proposed infrastructure, marketing and personnel parameters. These parameters cover the project specifically and are similar to those of a normal business plan. Following this analysis, a final evaluation is done culminating in a decision on whether the project is feasible or not . In applying this model to evaluate the feasibility of establishing a clay brickworks in Mozambique, the researchers concluded at the interim evaluation that it was premature to invest in a clay brickworks in Mozambique . This type of investment might only become attractive after a peace settlement were reached between the government and the resistance movement and with the restoration of the country's infrastructure.

AFRIKAANSE OPSOMMING: Ontwikkeling wereldwyd, en veral in Suid-Afrika, het verandering meegebring. Dit stel nuwe geleenthede en uitdagings aan vandag se bestuurders en entrepreneurs. Na aanleiding van veranderinge in die politieke bestel in Suid-Afrika, die verbrokkeling van die Sowjet-Unie en die verlies van geloofwaardigheid van die kommunistiese ideologie, beleef Suid-Afrika toenemende aanvaarbaarheid in die wereld asook met sy naburige Afrika lande. Nuwe geleenthede buitelands en veral in die naburige Afrika lande, word nou aan besigheidslui in Suid-Afrika gebied, derhalwe word Suid- Afrika gesien as die sleutel tot Afrika. Die probleem wat Suid-Afrikaanse bestuurders tans in die gesig staar, is die evaluasie van lewensvatbare geleenthede in 'n naburige Afrika land en om die handelstoestande te bepaal waaronder hulle sal moet funksioneer. Na agtien jaar van kommunistiese heerskappy en tien jaar van burgeroorloe is Mosambiek een van die armste lande ter wereld. Buitelandse noodlenigingsprogramme het tot die land se redding gekom met die daarstel van ekonomiese herstel programme sowel as die vervanging van sosialistiese idees met 'n Westerse vryemarkstelsel. Alhoewel Mosambiek nog swaar gebuk gaan onder burgeroorloe, is daar wel aanduidings dat 'n vredesooreenkoms onafwendbaar is. Die Mosambiekse regering bied tans aantreklike beleggingspakkette aan wat hoofsaaklik gerig is op die buitelandse belegger. Die eerste indrukke wat gelaat word, is dat Mosambiek gereed is vir buitelandse belegging en ontginning. Die vraag is, is dit wel so? Hierdie navorsingsprojek evalueer eerstens bestaande uitvoerbaarheidsmodelle ten einde 'n toepaslike model te vind om die uitvoerbaarheid te bepaal van investering in 'n kleibaksteenfabriek in Mosambiek. Die uitvoerbaarheidsmodel wat hier voorgestel word, neem 'n holistiese benadering aan, met die erkenning dat elemente soos die finansiele- en vervoer-infrastruktuur nie noodwendig tans bestaan nie. Die model is verdeel in twee dele waarvan die eerste die makro- parameters van die land evalueer, en die tweede die mikra-parameters, of spesifieke besonderhede aangaande die geleentheid. Die evaluering van makro- parameters word opgedeel in vyf afdelings, naamlik, die sosio-kulturele, politiese, ekonomiese, tegnologiese en fisiese parameters. Na voltooiing van elke afdeling word 'n kort opsomming en gradering gedoen. Aan die einde van die deel wat handel oor makro-parameters, is daar 'n tussentydse evaluasie gedoen om te bepaal of die land gunstig is vir beleggings. As die belegger glo dat die land gereed is vir belegging, word die volgende afdeling, naamlik mikro-parameters, ondersoek. Indien die belegger egter van mening is dat die land nie geskik is vir beleggings nie, word die ontleding na die eerste gedeelte gestaak. Die tweede afdeling, wat na mikro-parameters verwys, word ook in vyf sub- afdelings opgedeel, naamlik, finansieel, vervaardiging, voorgestelde infrastruktuur, bemarking en personeel parameters. Hierdie parameters is soortgelyk aan 'n gewone besigheidsplan en is omvattend en spesifiek. Hierdie ontleding word gevolg deur 'n finale evaluasie wat uitloop op 'n besluit of die projek uitvoerbaar is of nie. Deur middel van die toepassing van hierdie model om die lewensvatbaarheid van die vestiging van 'n kleibaksteenfabriek in Mosambiek te evalueer, het die navorsers in die tussentydse ontleding getoon dat so 'n belegging nie op hierdie stadium lewensvatbaar sal wees nie. 'n Belegging sal moontlik aantreklik wees nadat daar ' n vredesooreenkoms bereik word tussen die regering en die weerstandsbeweging, en met die herstel van die land se infrastruktuur.

Please refer to this item in SUNScholar by using the following persistent URL: http://hdl.handle.net/10019.1/69488
This item appears in the following collections: