Prime Rate and the Business Environment in Mozambique: Challenges, opportunities, and implications for investors
Keywords:
Doing Business, Management, Mozambique, Prime Rate, Sustainability, Business EnvironmentAbstract
Mozambique, a developing African nation, faces complex challenges in its quest for stability and sustainable economic growth. This paper explores the interconnection between the business environment and the Prime Rate of the Financial System (PRSF) in Mozambique, using data from the World Bank's Doing Business report. It analyses how the ease of starting a business, registering property, enforcing contracts, and trading across borders influence the country's attractiveness for investment. The study also investigates the role of the PRSF as a barometer of economic conditions and its impact on credit and investment decisions. Through an econometric analysis, the results indicate an inverse relationship between the PRSF and the business environment rating, suggesting that increasing the interest rate may lead to a deterioration of the business environment. It is concluded that incorporating the PRSF into the business environment assessment model is essential for a more comprehensive understanding of Mozambican economic dynamics and for the formulation of policies that promote sustainable management and development.
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