Introduction

The Republic of Mozambique is situated on the eastern coast of Southern Africa, bordering Zambia and Malawi to the north and west, Tanzania to the North, South Africa and Swaziland to the west and southwest, and the Indian Ocean and Mozambique Channel to the east.

Since the establishment of multi-party democracy and the end of conflict, Mozambique has emerged to new renown as one of the more enticing tourist destinations in the Southern African region. Offering a unique historical and cultural heritage, tropical beaches, coral reefs, spectacular landscapes, intriguingly rich architecture and small isolated islands close to the coast. In fact, there has never been a more exciting time to visit Mozambique. Travellers from far and wide are beginning to re-discover the many and varied delights offered by this fascinating country.

Mozambique has a rapidly growing economy, with growth rate of about 9 percent. The country has a centrally planned economy although the government is instituting free-market reforms. In Mozambique the market determines the exchange rate, interest rates and prices. Economic reform has taken place in the form of the elimination of subsidies and quantitative restrictions on imports, the reduction and simplification of import tariffs and the liberalisation of crop marketing.


Investment Climate

Mozambique is a country on the move, constantly adjusting and streamlining bureaucratic procedures, and firmly committed to restructure its economy to meet the demands of the global economy. There is no doubt that enormous improvements have taken place and will continue. The following sectors of opportunity have emerged for investors.

Agriculture - Mozambique has immense agricultural potential, with an estimated 36 million hectares of arable land, with only 9 million currently in productive use. Rehabilitation of the existing agricultural-related investments including roads, rail, ports and irrigation systems is a priority for the government. This should facilitate new investment, and provide viable opportunities. Key areas for the development of commercial farming include Chokwe, Massingir and Corrumana which all have an existing network of irrigation.

Tourism - During the colonial period, Mozambique was the playground of Southern Africa, with more than 300,000 tourists visiting each year. By the mid 1990`s however, numbers had risen from the low point during the war of less than 10,000 to more than 100,000 and is still growing fast. There is therefore an urgent need to rehabilitate and construct new hotels to accommodate the growth in tourists. The main growth areas include: sun and beach tourism, adventure/filming tourism, historical, cultural and eco-tourism. The major growth will be around the coastal tourism.

Manufacturing - A vigorous privatisation programme, combined with strong foreign investment is having its impact on the manufacturing sector. Long neglected, there is a tremendous need for the upgrading of old plants, and investment in new sectors. The strong growth in the domestic economy, and not inconsiderable market of 18 million is currently under-served, and consumer goods industries should blossom. Priority industrial sectors identified for development include: Food Processing and Agro; Textile and clothing; Edible Soaps and oils; Chemicals; Metallurgy; and, Packaging.

Fishing and Aquaculture - The fishing sector is a key contributor to the Mozambican economy, with the 8,000-ton prawn catch representing the countries number one export commodity. Mozambique produces an estimated 30,000 tons of fish annually. There is therefore enormous potential for growth, as well as in the investment in the fishing infrastructure. This includes fishing port quays, cold storage facilities, boat yards, workshops and processing facilities, most of which are under-utilised and offer considerable opportunities for redevelopment.

Minerals - Mozambique has huge and diverse mineral resources, which are as yet largely untapped. These include coal, natural gas, rare metals and rare earth elements, gold titanium and non-metallic minerals. The country also has potential for gold and diamonds. 

Forestry - Mozambique has around 57 million hectares of forest, of which 20 million are commercially viable (with wood such as ebony, teak, rosewood and sandalwood), with some 14 million hectares with high commercial and industrial potential.

Construction- The Mozambican construction industry is currently experiencing a boom period due to the renewed impetus given to national reconstruction programs following the return of peace and internal stability. Housing construction and renovation is strongly underway in the major cities, as well as the development of commercial and industrial property. The boom in new hotels will have also provided a strong boost to the local construction industry. The needs of Mozambique in terms of new rural and urban infrastructures are enormous, and offer tremendous opportunities for civil engineering firms. They include road, rail and port rehabilitation programs, and reconstruction of social services such as schools, hospitals, water systems and electricity.

Financial Services - Several new banks have recently opened, and the reforms to the insurance sector should see opportunities emerging. The 1991 law of Credit Institutions also lays the foundation for further development of other financial institutions such as investment banks, leasing companies, offshore banks, investment funds and the recently pouted possibility of a stock exchange. 

Investment Promotion Centre (CPI) - CPI offers a comprehensive service in support of foreign investors. Contact details are as follow: 332, Rua da Imprensa , R/C Maputo Mozambique, Tel:+ 258 1 313295 / 99 or 313310 / 75 Fax: + 258 1 313325, Email: cpi@cpi.co.mz, Web: www.mozbusiness.gov.mz.
  

Mozambique – India Relations 

First contact between the ancestors of the people of Mozambique and India was made thousands of years ago by way of the trade routes of the Indian Ocean. Today, economic relations between the two countries are growing and present great potential for further growth. The visit to India of H.E. Mr. Joaquim Alberto Chissano, former President of the Republic of Mozambique a few years ago added fresh impetus to the friendly ties between the two countries.

In 2000-01 total trade between the two countries was US$49.35 million (Indian exports US$30.27 million and imports US$19.08 million), and in 2001-02 bilateral trade was US$36.72 million (Indian exports US$30.22 million and imports US$6.5 million). These figures indicate that in the past two years, Indian exports to Mozambique have increase, while Mozambique exports to India have decreased. 


Mozambique Country Data