Our comprehensive assessment of Mozambique's operating environment and the outlook for its leading sectors are formed by bringing together a wealth of data on global markets that affect Mozambique, as well as the latest industry developments that could impact Mozambique's industries. This unique integrated approach has given us an impeccable track-record for predicting important shifts in the markets, ensuring you’re aware of the latest market opportunities and risks in Mozambique before your competitors.

Country Risk

Mozambique Country Risk

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Core Views:

  • Opposition concerns about the Mozambican election's credibility are shared by many observers but the result - a victory of ruling party Frelimo - will not be overturned. A negotiated settlement, which gives Renamo leaders more status, will nonetheless be necessary. The chances of a successful agreement are bolstered by the consensus-based approach President-elect Felipe Nyussi.

  • Mozambique's growth forecasts are unchanged following the ruling party's widely-expected victory at October 2014 elections. However, the strong performance of the opposition increases security and policy risks, and these could result in lower growth than we are currently forecasting.

  • Mozambique's monetary policy committee will hold its key interest rate at 7.5% in 2015 as it balances low inflation and growth concerns...

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Mozambique Operational Risk Coverage (9)

Mozambique Operational Risk

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BMI View : Mozambique is one of the most attractive markets in Sub-Saharan Africa (SSA) on account of its promising economic outlook and investor-friendly business environment, combined with its long coastline and abundant natural resources. Nevertheless, the country is currently operating well below capacity on account of a crumbling internal transport network, a largely unskilled labour pool and a heightened political risk profile. This means that investors in the country must negotiate a number of obstacles in order to realise gains from Mozambique's growing economic potential. Consequently, Mozambique receives a score of 34.4 out of 100 for Operational Risk, placing 2...

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Mozambique Crime & Security

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BMI View : Foreign business travellers, expatriates and tourists face moderate crime and security risks in Mozambique. Foreign firms face the highest degree of risk from the re-emergence of political violence and instability, which may spread throughout the country and potentially disrupt operations. As foreigners, investors may also be targeted for criminal activities, from which businesses have limited protection due to the lack of an effective police force. However, this threat is moderated by the very low likelihood of interstate conflict, despite the small size of Mozambique's armed forces. Consequently, Mozambique receives a score of 36.5 out of 100 for Crime and Security Risks, placing 23rd in the Sub-Saharan Africa (SSA) region...

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Mozambique Labour Market

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BMI View : The labour market in Mozambique is uncompetitive by regional and global standards due to a general lack of education, combined with poor public health and strict quotas governing the hiring of foreign workers. Although Mozambique has favourable demographics, with 48.1% of the population between the ages of 15 and 54, the country has proved unable to convert its citizens into skilled labourers due to inadequate public service provision in health, education and poverty reduction. BMI sees little prospect of this situation improving over the medium term. As a result, Mozambique scores 29.3 out of 100 for overall Labour Market Risk, which places the country 41st out of 44 states in Sub-Saharan Africa (SSA)...

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Mozambique Logistics

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BMI View : Mozambique suffers from a significant infrastructure deficit resulting from limited investment and the destruction wrought by the country's civil war (1795-1992), which inhibits the country's ability to meet growing national demand for transport. That being said, despite its limitations the country is still relatively well developed relative to many of its neighbours, enabling it to serve as a major transport player within regional and international supply chains. Notable benefits to foreign investors and businesses include a well-integrated maritime trade and airfreight infrastructure, limited trade bureaucracy, competitive lead times, and a burgeoning market in exports and imports. Taking these factors into consideration, BMI ...

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Mozambique Trade & Investment

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BMI View: Foreign businesses in Mozambique are able to take advantage of the country's stable and rapidly growing economy, sizeable natural resources, tax incentives for new investors and relatively free trade environment. Equally, the government operates a generally favourable attitude to foreign investors and operates a number of free trade and special industrial zones across the country. Nevertheless, despite Mozambique's recent progress, a number of significant hurdles must be negotiated when conducting business in the country. The most pressing obstacles are a lack of access to credit facilities, inefficient bureaucracy and corruption within state institutions and the private sector. Taking these factors into consideration, BMI ...

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Mozambique Industry Coverage (12)

Agribusiness

Mozambique Agribusiness

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Agribusiness Market Value
BMI Market Value By Commodity (2011-2019)

BMI View: We hold a positive view on the agribusiness sector of Mozambique, as the country is able to tap in to abundant and largely unexploited land and water resources. Of the utmost importance is boosting agricultural productivity by improving irrigation and introducing technology to small-scale farmers. The government has also highlighted the need to improve food and nutritional safety and to...

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Autos

Mozambique Autos

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BMI View: BMI remains positive on the outlook for new vehicle sales in Mozambique. Commercial vehicle sales will continue to account for the lion's share of new vehicle sales. However, we expect passenger car sales to increase at a faster rate over the coming five years.

We hold a bullish outlook for the Mozambique autos market for 2014, and we believe vehicle sales increased 15.1% over the year. This comes from an expected 22.4% surge in passenger sales, and a 12% increase in the commercial vehicle segment. We expect this positive momentum to continue into 2015, and we forecast total vehicle sales to increase 17% over the year.

Moreover, domestic autos production in the country has started. In early October 2014, Matchedje Motor sold its first production line vehicle,...

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Commercial Banking

Mozambique Commercial Banking

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...
Commercial Banking Sector Indicators
Date Total assets Client loans Bond portfolio Other Liabilities and capital Capital Client deposits

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Food & Drink

Mozambique Food & Drink

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BMI View: Following a slowdown in 2014 due to political tensions, private consumption will accelerate in Mozambique in 2015, boosted by GDP growth and low inflation. Because Mozambique is one of the poorest countries in the world, Mozambicans spend a great proportion of their income on food and drink. Therefore, GDP growth will translate into higher per capita food expenditure. We forecast per capita food consumption (local currency) to grow at a compound annual rate of 12.3% over 2014-2019, encouraging the development of the food & drink industry and the mass grocery retail sector.

Key Forecasts...

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Freight Transport

Mozambique Freight Transport

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BMI View: We forecast robust growth across Mozambique's freight transport modes in 2015, despite a moderate slowdown in real GDP growth. We forecast an economic expansion of 5.9% in 2015, following an estimated 7.2% last year, but expect a rebound to 8.3% in 2016. Growth in the freight transport sector will be driven primarily by the developing coal mining industry in Mozambique, which will power both growth in volumes on road, rail and through the country's ports, but also investment into the sector. A strong outlook for the Mozambican consumer - which will benefit from disinflation as oil prices have fallen - will support air freight and intermodal transport of consumer goods. It is not only domestic demand that will drive these volumes, but also that of landlocked hinterland countries such as Zimbabwe.

Headline Industry Data

  • ...

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Infrastructure

Mozambique Infrastructure

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BMI View: In the face of the dual headwinds of lower coal prices and constrained government revenues, we forecast growth in Mozambique's construction sector will slow in 2015 compared to the previous year, with 6.3% forecast in real terms. Despite lower coal prices, we expect the mining sector to continue to be the major source of investment, although note miners, as well as the prospective players in the offshore gas sector, may lessen their planned capital expenditure given depressed commodity prices, which is the major downside risk to our positive forecasts for the construction sector.

With the country's low quality infrastructure, the government has made its improvement a top priority and promoted private investments. Currently, about USD20bn of transport projects are under way, which include railway and port construction and expansion, as well as critical road upgrades....

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Mining

Mozambique Mining

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BMI View: Mozambique's mining revenue will remain heavily dependent on the country's coal sector, which will leave the sector exposed to continued global coal price weakness. Despite this, coal production growth will continue to exceed gold output growth. Furthermore, the country's openness to foreign investment will support the sector's long term growth outlook.

Coal To Remain Key
Mozambique - Coal Production (mnt) And Gold Production (moz)

Mozambique's mining sector will continue to come...

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Oil & Gas

Mozambique Oil & Gas

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BMI View: A key takeaway from recent exploration and appraisal work in Mozambique is growing confidence that operators have proven sufficient amounts of gas to support large LNG export projects. However, FID delays, falling oil and gas prices, costs, infrastructure constraints and the ongoing regulatory overhaul are challenges the country will face as it moves from exploration to production. While the timing of first LNG is particularly difficult to pin-point, we expect Mozambique to make its presence felt in the global LNG market by early in the next decade.

...

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Pharmaceuticals & Healthcare

Mozambique Pharmaceuticals & Healthcare

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BMI View: Growth in Mozambique's pharmaceutical market will be driven primarily by a growing chronic disease burden and the government's efforts to achieve universal health coverage through its 2014-2019 Health Sector Strategic Plan. Our underlying view that the country will remain reliant on imports is unchanged. However, the opening of a domestic manufacturing facility will somewhat reduce this reliance over the longer term.

Headline Expenditure Forecasts

  • Pharmaceuticals: MZN7.59bn (USD242mn) in 2014 to MZN8.32bn (USD258mn) in 2015; +9.5% in local currency and +6.4% in US dollar terms. Forecast revised upwards from last quarter.

  • Healthcare: MZN34.93bn (USD1.11bn) in 2014 to MZN38.50bn (USD1.19bn) in 2015; +10.2% in...

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Power

Mozambique Power

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BMI View: Mozambique is one of the most attractive markets in Sub-Saharan Africa. The economy is growing rapidly and the government has liberalised the country's investment laws, providing an enabling environment for exploiting Mozambique's abundant energy resources. However, barriers to investment remain, including high levels of corruption and low-level political instability.

The outlook for Mozambique's power sector is good. After decades of civil war, the political situation has stabilized, the economy and population are growing rapidly, and the government has liberalized the country's investment laws, providing an enabling environment for the development of the power sector. A number of major...

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Shipping

Mozambique Shipping

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BMI View: The outlook for Mozambique's shipping sector is positive in 2015, especially in terms of gross tonnage exports. The ongoing development of Southern Africa's coal mining sector - though bruised by the fall in prices and the withdrawal of Rio Tinto from the country - will drive continued double-digit growth through facilities such as Beira, where a second new coal terminal is being developed. In terms of container shipping, the demand picture is positive, from both domestic Mozambican consumers, and those of the hinterland countries also served by its ports. In Mozambique, the receding threat of renewed civil war will improve sentiment, and we forecast real growth.

Headline Industry Data

  • Gross tonnage throughput at the port of Maputo is forecast to grow by 10.7% in 2015, to 21.21mn tonnes....

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Telecommunications

Mozambique Telecommunications

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BMI View : BMI's Q215 Southern Africa report analyses the latest industry, regulatory and macroeconomic developments in the telecoms markets in Angola, Botswana, Mozambique, Mauritius and Namibia. It also contains our estimate of the market data relating to the end of 2014 and an update of our five-year forecasts to 2019 for the mobile, fixed-line and internet sectors.

Key...

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