August 2015—As part of an effort to make it simpler and more predictable to do business in Mozambique, the country recently revised regulations governing ad hoc public holidays, turning what was previously an economic drain into an economic opportunity.

Until a few months ago, Mozambican labor law permitted ad hoc public holidays that were declared with an advance notice of only 48 hours. In the first 39 days of 2014, an election year, the country had five ad hoc public holidays, each costing the economy an estimated $6 million.

On all public holidays, ad hoc and standard, businesses were not permitted to operate, meaning loss of production as well as lost opportunities in the retail and tourism sectors since people like to visit shops and restaurants on holidays. The unpredictability of the additional ad hoc holidays also caused problems for employees, who were unable to plan leave and holidays in advance.

From 2012 to 2014, USAID’s Support Program for Economic and Enterprise Development (SPEED) worked closely with Mozambique’s main umbrella business association, the Confederation of Trade Associations, to calculate the economic impact of the ad hoc holidays. They conducted a public campaign advocating for revised regulations to ensure that holidays were more predictable and that businesses could still operate on the ad hoc holidays. They developed new proposed regulations and presented them to Mozambique’s tripartite labor negotiation commission, where government, trade unions and business discuss employment matters.

As a result of this work, the Mozambican Government passed new regulations in February 2015 governing how ad hoc public holidays are managed. The regulations allow companies to capture the benefits of the holidays and at the same time recognize that those who work on holidays should receive additional pay for doing so. Companies and their staff are able to plan better, and instead of generating economic loss, regulated public holidays will contribute to the growth of the economy.

"The regulation of ad hoc holidays will have a major positive impact on business, enabling supermarkets and restaurants to open on public holidays, thus contributing to economic growth,” said Rui Monteiro, a representative of the Confederation of Trade Associations.

A predictable business environment is important for companies’ growth and investment. Allowing enterprises to open on ad hoc public holidays means they can serve and profit from customers who want to travel, shop and spend money. This is good for business, good for consumers, and good for the economy.

The SPEED program, which ran from August 2010 to February 2015, was designed to improve the business environment in Mozambique by having more companies doing more business, resulting in increased trade and investment and a stronger competitive position.

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