Mozambique
In-depth country-focused analysis on Mozambique's economic, political and operational risk environment, complemented by detailed sector insight

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 cut rates by 25 basis points to 8.00% in 2015 as it balances low inflation and growth concerns against an uncertain outlook for...

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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 S ub-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, M ozambique receives a score of 37.2 out of 100 f or Operational Risk, placing 22nd in the...

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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 business operations. As foreigners, investors may also be likely target s for criminal activities, from which businesses have limited protection due to the lack of effective policemen. However, this threat is moderated by the very low likelihood of interstate conflict, despite the small size of the armed forces. Consequently , Moz ambique receives a score of 36.5 out of 100 for...

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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 in the labour pool, combined with poor public health and strict quotas governing the hiring of foreign workers. Although Mozambique has a favourable demographic situation, 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 in Sub-Saharan Africa (SSA) .

With regards to...

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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. Taking this into consideration, BMI awards Mozambique a score of 42.1 out of 100 for Logistics Risk, placing the country eighth out of 44 states in Sub-Saharan Africa (SSA) , between Togo and Gabon.

Despite the limitations of Mozambique's logistics network, it is well developed relative to many of its neighbours, enabling the country to serve as a major transport player within regional and international supply chains. Notable benefits to foreign...

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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, t ax incentives for new investors and relatively free trade environm ent. 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 (10)

Agribusiness

Mozambique Agribusiness

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BMI View:   We hold a positive view on the agribusiness sector of Mozambique, as the country is able to tap into 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 facilitate more agricultural reform. Our optimism about Mozambique's agriculture industry largely hinges on the government's continued support for the sector. According to the Ministry of Agriculture's National Plan for Investment in the Agricultural Sector, Mozambique still requires investment of US D 3.1bn between 2013 and 2017 to ensure that the country is self-sufficient in food. The...

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Autos

Mozambique Autos

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BMI remains positive on the outlook for new vehicle sales in Mozambique. We forecast total sales to reach nearly 35,500 units in 2018, almost double the levels seen in 2012. Commercial vehicle (CV) 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 have become increasingly bullish in our outlook for the Mozambique autos market for 2014, and we now forecasting 15.1% sales growth over the year. This comes from an expected 22.4% surge in passenger sales, and a 12% increase in the CV segment.

Moreover, domestic autos production in the country has started.  In early October 2014,   Matchedje Motor sold the first vehicle rolled off the production line, according to local press reports. Matchedje Motor is the result of investment by...

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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:   Although economic data for Mozambique have been giving off mixed signals over the past few months, with private consumption growth slowing down to 4.8% in 2014, the ceasefire between the opposition party Renamo and the government will stimulate growth in 2015. Because Mozambique is one of the poorest countries in the world, Mozambicans spend a gre at 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% over 2013-2018, encouraging the development of the food & drink industry and the mass grocery retail sector. 

Key Forecasts

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Infrastructure

Mozambique Infrastructure

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BMI View: With USD 30bn of infrastructure projects in the pipeline , Mozambique is set for strong growth. Ongoing project delays have put some dampers on investor ent husiasm but BMI still estimates that the construction sector will average 6.7 % growth per annum over our forecast period from 2014 to 2023, driven by investment into infrastructure. We forecast construction industry growth to reach 9. 1 % in 2014, due to activity in freight transport and power projects, driven primarily by investment in...

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Mining

Mozambique Mining

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BMI View:   Mozambique will be one of the major growth stories in the global mining sector as investment in the country's sizeable coal reserves fosters rapid growth in output. We expect the value of the country's mining sector to grow from USD 0.4bn in 2013 to USD1.2bn in 2018 , an increase from 2.9% of GDP in 2013 to 4.2 % in 2018 .

Mozambique's nascent coal sector is set to take off in the next five years, boosting the country's mining industry. Almost all of the coal produced will be exported and thus Mozambique has...

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Oil & Gas

Mozambique Oil & Gas

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BMI View : A key takeaway from recent exploration and app raisal work in Mozambique is gro wing confidence that operators have proven sufficient amounts of gas to support large LNG export proje cts. However, FID delays, politics, costs, infrastructure constraints and the ongoing regulatory overhaul are challenges which we the country wil l 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 the end of the decade.

Headline Forecasts (Mozambique 2012-2018)
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Pharmaceuticals & Healthcare

Mozambique Pharmaceuticals & Healthcare

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BMI View: Mozambique is rich in natural resources making it a fast growing economy, both government and foreign investors are taking steps to improve the quality imported medicines and healthcare facilities. Vaccination programs and trials are being put into place, particularly for malaria and HIV immunisation, to help combat the county ' s high burden of disease. However, Mozambique ' s pharmaceutical market suffers from an abundance of counterfeit medicines in circulation partly. It ' s high dependence on costly imported drugs combined with a poor regulatory framework and weak intellectual property protection continue to impede market growth potential.

Headline Expenditure Forecasts

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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 liberalis ed the country's investment laws, providing an enabling environment for exploiting Mozambique ' s abundant energy the 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 stabilised, the economy and population are growing rapidly, and the government has liberalised the country's investment laws, providing an enabling environment for the development of the power sector. A number of major...

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Telecommunications

Mozambique Telecommunications

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BMI View :  BMI's Q 4 14 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 analysis of the latest market data relating to the end of June 2014   a nd an update of   our five-year forecasts to 2018 for the mobile, fixed-...

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