environment, as well as the general inadequacy of business infrastructures.22 In addition to these business environment considerations, the manufacturing sector is suffering from other important structural problems that equally hamper industrial development in Mozambique. These include a tight monetary framework and a strategy of financial restraint that has raised the cost of investment, with lending rates in local currency being above 25 per cent in nominal terms throughout most of the late 1990s and 2000s. 139. The Country Review Mission (CRM) also noted a steep decline in business opportunities for local firms, resulting from the strong competition exerted by the import and informal sectors, the collapse of upstream industries, and the decline in demand caused by the general drop in formal employment in the economy. Additionally, this sector’s general technological backwardness and weak skills base have further undermined local manufacturing firms’ competitiveness and market position in local and international markets. Finally, the privatisation of over 1 200 state-owned enterprises undertaken throughout the 1980s and 1990s does not appear to have led to any significant modernisation of the manufacturing sector’s technological base. 23 140. These manufacturing dynamics have coincided with a weakening of the policy and institutional framework for industrial development in Mozambique, further hampering the possibility of addressing these multiple constraints. At present, various institutions and NGOs are providing technical capacity-building support, business development services, and financial facilities to manufacturing firms in Mozambique. Yet, the overall impact and reach of these initiatives has been limited. 24 This has partly been the result of the difficult business environment faced by manufacturing firms operating in Mozambique, which has ultimately reduced the demand for this type of service. It has also been the consequence of the fragmentation of, and weak coordination between, these interventions, the lack of a clear strategy for manufacturing development, and the few resources devoted to this purpose. The government does, however, have a National Strategy for the Industrial Sector, which sets out the guiding principles for government intervention in this sphere. 22 Sriram, V. & Mersha, T. 2006. Facilitating entrepreneurship in sub-Saharan Africa: What governments can do. Journal for International Business and Entrepreneurship Development, 3(1/2): 136–151. 23 Cramer, C. 2001. Privatisation and adjustment in Mozambique: A hospital pass? Journal of Southern African Studies, 27(1): 79–104; Pitcher, M.A. 2002. Transforming Mozambique: The politics of privatisation 1975–2000. Cambridge: Cambridge University Press. 24 Warren-Rodriguez, A. 2008. Uncovering dynamics in the accumulation of technological capabilities and skills in the Mozambican manufacturing sector. SOAS Department of Economics Working Paper No. 156, March, page 6. Department of Economics, School of Oriental and African Studies (SOAS). London: University of London. 74 A P R M COU N T RY R EV IEW R EP ORT NO. 11