MOZAMBIQUE - Economy
Director General, the Investment Promotion Centre (CPI)
With an academic background in Economics and Agricultural Business Management, Lourenço Sambo 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, as well as 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 Development Corridor, a World Bank-funded project for the restructuring of the CFM-Mozambique Railway Company.
First of all we had to establish ourselves in all of the country’s 11 provinces to widen the scope of our institutional assistance to investors, and secondly we had to equip our institution with appropriate human and technical resources. These were the most important steps that we have successfully taken. Thirdly, we had to improve our relations with other institutions involved in the process of attracting investments as well as with relevant government ministries who have a strong say the in the process of investment approval, such as the Ministries of Agriculture, Interior, Labor, Environment, Finance, and Mineral Resources. The government also recently approved a new investment promotion strategy to be implemented over the next three years, which is expected to substantially increase investment flows into the country.
I would identify the rather limited development of basic infrastructure in rural areas, as well as a low level of scientific literacy and professional training, inadequate electrical power distribution, and susceptibility of certain productive processes to international price fluctuation.
One of the largest forthcoming investment projects is the LNG plant set to cost some $30 billion. This project is to be developed in the Rovuma basin, in northern Mozambique, with the first exports due to start in 2018. There are other large-scale projects associated with gas exploration in the Rovuma basin, such as setting up a container terminal, a pipe-coating plant, a shipyard, bunkering, an LNG receiving terminal, a fertilizer plant, and gas to liquid (GTL) and dimethyl ether (DME) facilities. In addition, CPI recently approved investment projects worth more than $7 billion, mainly in hydro, coal, and gas power plants. The investment will also cover the development of the northern ports of Pemba and Palma, where a giant logistics base and LNG production plants are planned, which will use gas produced from offshore fields in the Rovuma Basin being developed by US oil major Anadarko Petroleum Corp and Italy’s ENI. These projects will have a major impact on the entire economy directly or indirectly through their contribution to GDP, and the creation of employment, especially in Pemba and Palma. Moreover, Mozambique will enjoy much higher international visibility as one of the most important producers and exporters of natural gas. Mozambique’s economy is already growing at 7.5% annually. In the medium term, as a result of the LNG plant and other mega projects in the mining sector, the economy is expected to see acceleration of 9%, or even 10%.
Mozambique is proud of being ranked among the most strategic locations in Africa and in the world at large, and of having up-to-date logistics infrastructure, including ports and railways that offer an easier link for hinterland countries to the Indian Ocean trade routes. As a result of these corridors and other factors, all the three regions of the country—the south, center, and north—are prime investment destinations. The sectors of greatest potential include agriculture and agro-industry, construction and public works, mineral resources and energy, services, transport and communications, and tourism.
Mozambique annually approves investment from over 45 countries. Topping the list in 2014 for example were the UAE, Mauritius, South Africa, Portugal, China, the UK, Macau, Turkey, Kenya, and France.
It is healthy, as we remain one of the most stable regional countries both socially and politically. Dialogue in our society is the order of the day. All institutions mandated to assist investors are functioning properly and in concordance with laws in force in the Republic of Mozambique, and in a well-coordinated manner. Legal instruments have undergone major reforms. These include business licensing, fiscal, investment, and labor laws. And meanwhile, infrastructure such as ports and railways, energy and water supply, roads and bridges, telecommunications, and airports are being upgraded.
Mozambique has a strategic location in the region, providing infrastructure that gives access to SADC Countries—ports, railways, pipelines, and roads. Besides, Mozambique has plentiful fertile land and an excellent climate for the production of both food and cash crops such as maize, soya, rice, sesame, and fruits, as well as for livestock production. In addition, we have an energy potential of about 14,000 MW, mainly from water resources, gas, and coal, which is sufficient to supply the entire SADC region. Finally, Mozambique has numerous mineral resources, notably coal and gas.
CPI is a government agency with a mandate to promote, attract, and facilitate national and foreign direct investment. Therefore, our vision is to become a modern, innovative, and proactive promotion agency spurring investment both in the country and the wider world, taking into account the need for the balanced and sustainable growth of Mozambique. Implementation of an investment promotion strategy is one of the key factors in boosting investment inflow to the country, and CPI plays a pivotal role in realizing this strategy.
© The Business Year – February 2015