EMBASSY MAPUTO'S FY06 BFIF PROPOSAL

UNCLAS SECTION 01 OF 06 MAPUTO 000097

SIPDIS

SIPDIS

DEPT FOR EB/EBA - DWINSTEAD, AF/S - HTREGER, AF/EPS
COMMERCE FOR RTELCHIN
PRETORIA FOR FAS:RBICKFORD
GABORONE FOR TRADE HUB:AHILLEGAS
JOHANNESBURG FOR FCS RDONOVAN
DURBAN FOR FCS LKOHRS

E.O. 12958: N/A
TAGS: BEXP BTIO ECON ETRD AMGT EINV ABUD MZ
SUBJECT: EMBASSY MAPUTO'S FY06 BFIF PROPOSAL

REF: 05 STATE 215954


1. Post requests funding in the amount of USD 27,882 under
the Business Facilitation Incentive Fund (BFIF) for FY06.


2. In order of priority, we propose the following two
projects for FY06:


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Project 1: Commercial Outreach, AGOA Promotion and U.S.
Export Market Development
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A. Justification.

Commercial outreach, including conveying information about
trade possibilities under AGOA and opportunities for US
exports to Mozambique, is critical to strong US participation
in Mozambique's economic growth. Mozambique's large size
(twice as big as Texas) and primitive transport
infrastructure mean that business promotion activities
conducted in the capital city, Maputo - which is located in
the far southern corner of the country - reach only a very
limited national audience. For would-be business partners in
other parts of the country to benefit from US commercial
programs, these programs must be advertised and promoted by
commercial outreach activities conducted within their
communities.

Conducting commercial outreach in the regions now is
particularly timely. The Millennium Challenge Corporation
(MCC) is in the latter stages of negotiating a compact with
Mozambique, with a formal signing expected this fall.
However, MCC investment, some of it directed specifically
toward improving the business environment, will be only in
northernmost provinces. In the west, in Tete province, a
giant Brazilian consortium is beginning a massive program to
exploit rich coal deposits in the region - and ancillary
business opportunities are sure to follow. Further south in
Manica province, along the frontier with Zimbabwe, over the
past several years hundreds of former Zimbabwean farmers have
resettled in this rich agricultural area and are anxious for
support and investment as they struggle to establish
themselves.

This project proposal corresponds with Post's MPP goal of
promoting economic growth and development - namely, to
improve the business and investment climate; encourage
mechanisms that build Mozambique's competitiveness and trade
capacity and help U.S. investors and exporters; and to
promote rural income growth. The outreach program also
builds off the BFIF-supported Entrepreneurship Forum held by
Post and the Global Competitiveness Trade Hub in March 2005
(with help from USDOC, USAID and USDA) and supports both the
Hub's and USDA's continuing program initiatives.



B. Planning Milestones.

Program Approach/Content:
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This project has a three-pronged approach, to be implemented
in two phases: 1) Investment Concerns, 2) AGOA Education and
3) U.S. Export-Market Expansion.

Phase One:

Post will conduct the following proposed program in Maputo
city, Maputo province. The program will be both developed
and implemented with input from and coordination with USDA
and the Trade Hub. (Note: USDA and the Hub will pay for the
airfare, lodging and per diem of their representative to
participate in this phase. End note.)

i. Day One: Investment Concerns. Econ/Pol Officer, Econ/Pol
FSN and USDA and/or Hub representatives, will meet with U.S.
businesses located in the province to discuss investment
concerns and opportunities and, time permitting, visit
investment sites.



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States. Post also anticipates increased knowledge regarding
U.S. import requirements and important contact information
for more detailed information.

U.S. Export Market Expansion:

Post expects that local officials, businessmen, prospective
entrepreneurs, companies, farmers and related associations
will learn the importance of a positive business and
investment climate. Post,s exposure to each province and
potential investment and export opportunities outside of
Maputo will enhance Post,s involvement with USG agencies and
prospective investors/exporters in promoting U.S. business
throughout Mozambique.

Performance Metrics:

i. Share of Foreign Direct Investment in the Economy
ii. Exports as a Share of GDP
iii. AGOA and other U.S.-assisted Exports to the U.S.
iv. Average Rural Income Per Capita
v. Policy Reforms Approved
vi. Policy Reforms Implemented/Procedures Improved (e.g.
Number of Days to Start a Business)
vii. Demand for Business Development Assistance Services

Note: Many of these metrics are also outlined in Post,s MPP,
enabling project outcomes to be included in the Post,s, as
well as EB,s, performance evaluation.



D. Estimated Costs.

The estimated cost for the Commercial Outreach, AGOA
Promotion and U.S. Export Market Development Program is USD

23206.

i. Johannesburg/Pretoria Consultation Travel (2 persons, 4
days/3 nights)

Total Cost: USD 2696

a. USD 1000/Round-trip Airfare
b. USD 1396/Per diem (Lodging & MI&E)
c. USD 300/Transportation (taxi)

ii. Maputo Province (2 days)

Total Cost: USD 1200

a. USD 600/Conference Room
b. USD 600/Translator

iii. Gaza/Inhambane Provinces (2 persons, 6 days/5 nights)

Total Cost: USD 4976

a. USD 1140/Round-trip Airfare
b. USD 2396/Per diem (Lodging & M&IE)
c. USD 840/Car rental
d. USD 600/Conference Room

iv. Sofala/Manica Provinces (2 persons, 6 days/5 nights)

Total Cost: USD 5186

a. USD 1350/Round-trip Airfare:
b. USD 2396/Per diem (Lodging & M&IE)
c. USD 840/Car rental
d. USD 600/Conference Room

v. Tete/Nampula/Cabo Delgado Provinces (2 persons, 10 days/9
nights)

Total Cost: USD 9148

a. USD 2660/Round-trip Airfare
b. USD 4188/Per diem (Lodging & M&IE)
c. USD 1400/Car rental
d. USD 900/Conference Room



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E. Post,s Point-of-Contact.
Brooke L. Williams
Economic/Commercial Officer
Telephone: 258-21-492797, ext. 3422
Email: WilliamsBL@state.gov



F. Leveraging Funding.

Post reviewed possibilities for leveraging funding from other
agencies. Post spoke with both USDA and the Trade Hub, who
agreed to pay for their respective transport, lodging and per
diem for travel to Maputo to plan and implement the Maputo
program (Phase One). Post will then build off of this
program, coordinating with USDA and the Trade Hub, to deliver
province-tailored programs through Phase Two. In this
regard, USDA has indicated it may be able to fund the USDA
regional representative accompanying the Econ/Pol Officer and
FSN during one or more provincial trips.



G. Outcome/Success Criteria.

This outreach project will succeed, in one respect, if it can
demonstrate how it prompted U.S. investors in Mozambique
renew or increase their business efforts here. Likewise, the
project will be successful if Post is able to provide more
specific, guided assistance to an increased number of
potential U.S. investors and/or exporters. Success will also
be demonstrated by the GRM,s continued investment-friendly
reforms of commercial, labor, and financial policies, as well
as by the Mozambican investor/entrepreneur's increased
knowledge of AGOA, increased export of product to the United
States and increased ability to understand and navigate U.S.
import requirements.



H. Follow-Up Strategy.

Post will continue regular contact with contacts in each
province: to provide them with the most recent US trade
policy guidance, to assess the provincial business
environments for US businesses, and encourage greater
investment and trade. In addition, Post will follow-up with
the GRM, as well as new contacts made on the provincial
level, to support business-friendly commercial, legal and
labor reforms/implementation.

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Project 2: Agricultural Seminar: Moving Beyond Sustenance
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A. Justification.

Mozambique has still predominantly an agrarian economy - more
than 75% of its 19 million people rely on agriculture to
survive. Commercial agriculture (as opposed to subsistence
agriculture) is only partially developed and still offers
enormous potential. As Mozambique improves its business
environment, there will be increased synergy between
agriculture and commercial investment. The US Department of
Agriculture and USAID are heavily involved in encouraging the
growth of commercial agriculture in Mozambique and Post is
committed to supporting this effort. Commercial agriculture
provides the opportunity to increase Mozambican exports while
increasing potential American investment and trade
opportunities - from horticulture to John Deere. In
addition, this project will build on momentum created by the
Development Credit Authority's (USAID-managed) partnership
with the Commercial Bank of Mozambique (BCI) to guarantee
agricultural loans to agribusiness.

The target group for this seminar would be ex-Zimbabwean and
local entrepreneurial farmers and/or agri-businesspeople,
working on small to medium-size operations in Manica
province. This area of the country is especially fertile and
supports a wide variety of fruit and vegetable crops. The
ex-Zimbabwean farmers are struggling to establish themselves
in Mozambique, despite open support from national and local
officials in the province, and would be very receptive to
outside advice and support.
Agricultural experts from USDA, USAID, and a local branch of

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the US NGO Technoserve, as well as the Trade Hub, and will
cover the following topics: Financing Agribusiness
Operations; Emerging Crop Opportunities for the Small to
Medium Operations; Fair-Trade Exporting; How to Get
Certified; Importing to the US - Phytosanitary Regulations
and Beyond; Specialty Foods and Niche Marketing; and Buying
from the U.S.- What America has to Offer the Commercial Farm
Operation. (Note: If USDA and/or the Hub are able to
participate, they will pay for their representatives,
travel, lodging and per diem. End note.)



B. Planning Milestones.

Planned as a one-day seminar in the Manica provincial capital
of Chimoio, the tentative date is currently August 21, in
advance of the 2006-2007 agricultural season. In addition to
the seminar format, with the topics listed above, the project
envisions having tables with brochures offering information
on American agricultural-related products available for
import by Mozambican farmer/agri-business operation.

i. Late June: Finalize and confirm program agenda and
contact presenters; work with FAS, USDA and Trade Hub to
arrange product information for expo-tables; work with PAO to
create information/contact pamphlets for distribution to
participants.

ii. Early July: Draft participant invitations (for specified
participants); draft public announcement in conjunction with
PAO; secure forum location; contract translation services and
confirm presenter/moderator participation.

iii. Late July: Send out invitations and begin publicizing
event (with RSVP request); secure U.S. product pamphlets,
samples and other information for expo-tables; secure
information pamphlets for distribution.

iv. Early August: Confirm number of participants, draft
opening speech to be given by Ambassador/CDA.

v. Mid-August: Re-confirm program agenda and presenters;
confirm forum location and translation services.

vi. August 21: Conduct Agricultural Seminar.



C. Performance Metrics/Anticipated Outcomes.

Post anticipates that this seminar will provide farmers and
agro-businesspeople not only with important fundamental trade
regulation information and greater knowledge of financial and
technical assistance available to them from the USG in
Mozambique, but also with the contacts to obtain more details
and support. In time, Post anticipates improved agricultural
production, more exports, and more demand for US-sourced
products.

Performance Metrics:

i. Agricultural Exports as a Share of GDP from Manica Province
ii. AGOA and other U.S.-assisted Exports to the U.S.
(agricultural products) from Manica Province
iii. Average Rural Income Per Capita for Manica Province
iv. Requests for Assistance in Obtaining U.S.-sourced
products and/or for Business Development Assistance Services

Note - These metrics are components of metrics also outlined
in Post,s MPP, enabling project outcomes to be included in
the Post,s, as well as EB,s, performance evaluation.



D. Estimated Costs.

The estimated cost for the Chimoio Agricultural Seminar is
USD 4676 (4 persons, 2 days/1 night).

i. Travel, Per Diem & Transportation

a. USD 2300/Round-trip Airfare
b. USD 1196/Per diem (Lodging & MI&E)
c. USD 280/Car Rental

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ii. Seminar Expenses

a. USD 300/Interpreter
b. USD 300/Information Pamphlets
c. USD 300/Conference Room



E. Post,s Point-of-Contact.

Brooke L. Williams
Economic/Commercial Officer
Telephone: 258-21-492797, ext. 3422
Email: WilliamsBL@state.gov



F. Leveraging Funding.

Post has not yet coordinated funding with other Bureaus or
U.S. Agencies; however it plans to approach other agencies
with interest in this topic to seek their participation,
which they will then fund. In addition, Post has discussed
this project proposal with USAID and will create the seminar
agenda in conjunction with USAID, USDA and the Hub.



G. Outcome/Success Criteria.

This seminar will prove successful if farmers, potential
entrepreneurs and agri-business businesspeople utilize the
financial and technical assistance resources made available
to them. In addition, the seminar will be successful if it
harnesses the growing energy around agri-business in
Mozambique, creating increased interest in agricultural
investment and emerging areas (e.g. bio-fuels and specialty
foods).


H. Follow-Up Strategy.

Post will work with USAID and USAID-supported NGOs to
continue to support agri-business projects in Mozambique. In
addition, Post will keep the agri-business community informed
of AGOA opportunities, as well as emerging agricultural
products with export potential.
Dudley