London, England — MININGREVIEW.COM — 13 December 2011 – The rapid expansion of the activities of energy companies is drying up all of Mozambique’s qualified workers, leading the government to launch exceptional measures, including a review of the country’s labour law.
Stating this in its latest report on Mozambique released here, the Intelligence Unit (EIU), of “The Economist” Group noted that the severe labour constraints that lead to companies having difficulties finding qualified staff also extended to some services for associated sectors, such as engineering and construction.
“Service companies capable of meeting the needs of large multinationals have been flooded by the current level of capital influx, involving billion-dollar investment projects,” the EIU economists said.
The total value of mining investment projects in Mozambique is estimated at US$11.6 billion, with coal accounting for the largest slice of US$7.1 billion.
Due to these investments and the start of production of these projects, the economy is expected to maintain its upward trajectory over the next few years, with growth of 7.3% in 2011 to 8.5% in 2013, according to the EIU.
The labour market in Mozambique has a deficit of qualified workers on several levels, including senior and middle management and technical and semi-qualified staff.
According to the EIU, teaching is not sufficiently focused on the needs of the private sector and foreign companies have also had difficulty adapting to the strict Mozambican labour laws, which limit jobs taken by foreign workers to 5% of the total when staff number more than 100.
The limit is 8% for companies with between 10 and 100 workers, and 10% for companies with up to 10 workers.
The number of engineers, geologists and metallurgists trained each year is around 20 to 30 at the country’s largest university in Maputo, and around the same number at the main polytechnic institute.
In order to adapt, some companies have been hiring workers that are not entirely qualified, while others have been taking on foreign workers as short term consultants, with renewable contracts, sub-contracting companies or outsourcing for specific contracts.
Given these difficulties, the EIU noted, the government has responded to calls from the private sector, namely the Confederation of Economic Associations (CTA), and in October concluded a review of the labour law specific to the mining and oil sectors.
Although the quotas remain unchanged, companies in these sectors will now be allowed greater flexibility to employ foreigners through contracts of up to six months, and need only inform the authorities rather than applying for the contracts to be approved.
Specific investment projects may receive approval from the government for their foreign worker quotas to be increased.
Another solution that has been found is to grant authorisations to expatriate workers when it can be proved that qualified workers cannot be found locally.