Doing business in Mozambique
Despite having a turbulent history, Mozambique has stabilised and become one of Africa’s fastest growing economies. A steady GDP increase since 1994, accompanied by growing foreign direct investment has made this nation on Africa’s south-eastern coast one of interest to European, American and Asian businesses.
The majority of the 20 million inhabitants are employed within the agricultural sector, and crops such as baby-corn, flowers, citrus, cashew nuts, various fruits, peppers and paprika are common exports to competitive markets throughout Europe and the USA. The fertile land of the Zambezi River Valley has become particularly interesting to those wishing to invest in this sector – something that has not gone unnoticed by the Chinese who are investing heavily in Mozambique’s rural industries.
With 2,700 kilometres of coast and the bounty of the Indian Ocean, Mozambique offers excellent opportunities for those wishing to become involved in fisheries and aquaculture. The International Fund for Agricultural Development recently approved a $21.1 million loan to help this industry develop further.
Mozambique’s industrial capabilities have grown over the years and many firms are seeking foreign direct investment to provide a capital injection that will help purchase modern machinery or upgraded premises. South Africa, the US and China are all major partners here, with food and beverage, aluminium smelting and the textile industries being popular choices for those looking to become involved in this field.
Along with the development of industrial sectors, Mozambique has also seen expansion in its mineral resource usage with the discovery of large natural gas reserves. There are also numerous untapped reserves of coal, gold, titanium, ilmenite, zircon, rutile, tantalite, marble and precious stones that will continue to drive foreign investment and exploration.
The construction of hydroelectric dams and the growth of the gas industry have provided Mozambique with new power sources, although there is still considerable room for expansion in this field. Coal mines, many of which have foreign investors due to the liberalisation of the energy sector, also provide a ready source of fuel. Currently, Mozambique produces in excess of 16,000 MW.
With the development of industry also comes the development of the infrastructure and Mozambique has not been lacking in this sector either.
The country’s government has forged numerous partnerships with private enterprises to facilitate the growth of roads, bridges and telecommunications. As a result, potential opportunities abound.
The financial sector continues to grow and there are numerous commercial banks operating in Mozambique, including high street brands such as Barclays. There is a clustering of services in the capital Maputo. In addition, there are also insurance companies operating in Mozambique and these too are seeing growth to match the developments in the industrial, energy and infrastructural sectors.
Finally, tourism has not been neglected and Mozambique’s climate, extensive coastline, deep history and rich culture make it an attractive location for visitors. This is a sector that continues to grow and there are business opportunities in unique tourism niches, such as game parks. The country’s natural beauty and growing infrastructure gives this sector a healthy outlook.
Africa is rapidly becoming the land of opportunity and Mozambique exhibits one of the fastest economic growth rates on the continent. If you are looking to export your business, then Mozambique offers you a wealth of potential.
The author is the honorary consul of Malta in Mozambique.