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Lourenço Sambo

MOZAMBIQUE - Economy

Open House

Director General, Investment Promotion Centre (CPI)

Bio

Lourenço Sambo has an educational background in Economics and Agricultural Business Management, and has been the Director General of CPI since 2010. He was previously the Economic Adviser to the Minister of Planning and Development. He also taught mathematics at Maxaquene Secondary School, politics, economics, mathematics, and statistics at the Maputo Commercial School from 1979 to 1984, and public finance at the School of the National Planning Commission. In 1996, he was the Financial Manager of the Maputo Corridor, a World Bank-funded project for the restructuring of the CFM-Mozambique Railway Company.

"Mozambique is a stable country and the Mozambican people have proven capable of seeing beyond their differences."

What makes Mozambique an attractive destination for foreign investors?

Mozambique has been, and will continue to be, a privileged investment destination, as international investors move to Africa in pursuit of fresher and more competitive markets for sources of raw materials. The country also offers viable locations for the processing of those resources in addition to the advantage that some African countries, including Mozambique, have in terms of labor, cost factors, social stability, and access to preferential markets, such as the EU, the US, the Southern African Development Community (SADC), and China. Over the past 15 years, Mozambique has received investments to the tune of between $3 billion and $5 billion per annum from all around the world in various sectors, notably natural resources, agriculture and agro-industry, transport, communications, tourism and hospitality, industry, banking, and insurance, to name a few. It does not come as a surprise to anyone that our business environment has been registering remarkable improvements thanks to a wave of reforms undertaken by the government in close collaboration with the private sector. For over 20 years, the government has been working with representatives of the private sector in the identification of bottlenecks to business development. Reforms in the public sector have also been undertaken allowing public institutions to render faster and more efficient services. These reforms have encompassed various institutions, such as customs services, notaries and conservatories, ministries, and provincial and district government authorities, among others. Legal instruments have also been reformed, including labor laws, the legal framework on investments, and the commercial code. Also, at the heart of the matter is the need to improve the articulation between all institutions directly involved in investment promotion and facilitation which, in the past, used to work in isolation. There is an urgent need to bring them to work more closely together. I am talking of institutions such as the CPI, GAZEDA, CEPAGRI, the ministries of agriculture, finance, mineral resources, IPEME, the Ministry of Industry and Commerce, the National Tourism Authority (INATUR), the Zambeze Development Office, and the Institute for the Promotion of Exports (IPEX).

What is the significance of Mozambique’s mid-2013 foreign currency credit rating upgrade by Fitch?

We are delighted to know that our excellent development efforts and macroeconomic management are starting to be recognized by the international community, particularly by credit rating institutions such as Fitch and others. It is also very positive when Fitch recognizes, for example, that the expansion of Mozambique’s coal sector has been gaining momentum, as well as the improvement of infrastructure. Therefore, Fitch’s upgrade of the national economy is significant in the sense that it will be boost international investor and development partner confidence in Mozambique.

“Mozambique is a stable country and the Mozambican people have proven capable of seeing beyond their differences.”

To what extent should international investors be concerned about stability in Mozambique given the current events regarding Renamo?

Mozambique is a stable country and the Mozambican people have proven capable of seeing beyond their differences. We proved this in 1992 when the government and Renamo signed the Rome Peace Agreement, ending 16 years of armed conflict. We have had multi-party general elections and municipal elections, which are open for all forces of society to contribute to the way the country is run. HE Armando Guebuza, the President of the Republic, has been one of the key guarantors of this openness through a program called “Open and Inclusive Presidency,” through which he consults with all our citizens on the way the social and economic development process must be undertaken. It is true to say that certain events lately have marred the positive image that Mozambique has established, but, once again, we will be able to overcome these issues through dialogue.

Which are the key sectors for investment in the Mozambican economy going forward?

Despite the emergence of mineral resources, agriculture remains a priority sector simply because it is the source of livelihood for most of our population. Given the availability of millions of hectares of arable land (about 35 million hectares), agriculture has the potential to generate substantial revenue through the export of cash crops such as rice, cotton, cashew nuts, and soya beans, among others, as well as covering the food security needs not only for Mozambique, but also for the SADC region. Other priority sectors include the mining sector, with a priority on the local processing of resources, notably coal and gas, agro-industry, general industry, hotels and tourism, banking and insurance, transport and communications, and construction.

What is your outlook for the Mozambican economy over the coming year?

The economy should continue to grow at an average of 7% with the possibility of acceleration with the expected intensification of mining activity. In numerical terms, we expect real growth of 7.8% in 2014; inflation should be in the region of 5.6% and exports should continue to grow and diversify.

© The Business Year – March 2014

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