One of South Africa’s top five African trading partners,
Mozambique has been one of the ‘fastest-growing economies’ on the continent for
the last two-and-a-half decades. It has outperformed both regional and global
growth averages, with rich oil and gas reserves that are attracting substantial
investment from across the globe. Additionally, the nation looks set to rise up
as the ‘new’ Seychelles or Reunion if the optimism and energy continue in its
tourism sector.
He says there are solid reasons for South African investors to
invest in Mozambique. Here are his top five.
ONE: The growing economy
Mozambique is anticipating investments in the energy sector
(electricity) of over US$D10 billion in the coming 10 years as well as
significant investment in the oil and gas sector (Anadarko LNG plant), graphite
(various mining concessions have commenced), tourism sector – across the
country, traversing the extensive coastline – and the agricultural sector. The
International Monetary Fund and Mozambique government predict GDP growth of
5.3% in 2018, with inflation expected to be below 10% according to the Governor
Central Bank. A Deloitte 2017 report calls Mozambique’s economic prospects
positive.
With peace re-established, the country‘s macro-economic
stability is secure and Mozambique’s world-class endowments are creating
attractive destinations for investment. At the conference, all opportunities
will be explored, with advice on upcoming opportunities, benefits and success
stories, prospective challenges and agile strategies in terms of finances and
legalities.
TWO: Oil and gas
Mozambique is Africa’s third-largest holder of liquefied natural
gas (LNG), with reserves of around 180 trillion cubic feet. Two main consortiums
– one headed by the Texas based Anadarko and the other by Italian ENI – will
ensure that Mozambique becomes a major exporter by 2023.
Investment opportunities around natural gas abound in areas such
as the supply of equipment driven by the construction of gas plants. The LNG
development plan includes two 180,000 cubic meter LNG storage tanks, condensate
storage, a multi-berth marine jetty, and associated utilities and
infrastructure. ENI’s development plan foresees the drilling and completion of six
subsea wells in addition to the construction and installation of an advanced
technology FLNG with a future onshore liquefaction facility. Further major
opportunities exist in the oil and gas sector; for example: Anadarko LNG Plant
has pledged US$20bn to its liquefied natural gas (LNG) project.
Nial Kramer, CEO of SAOGA (South African Oil and Gas Activities)
says, “Fostering synergy between Mozambique as an economic frontier and SA as a
mature economic force will be vital in the development of the gas market in
Mozambique and in ensuring that these considerable natural reserves are used as
an opportunity to spur inter-regional trade and development opportunities.”
THREE: Mining
Mozambique has commercially important deposits of coal (high
quality coking coal and thermal coal), ruby, graphite, iron ore, titanium,
apatite, marble, bentonite, bauxite, kaolin, copper, gold, and tantalum. It
also holds some of the world’s largest untapped coal deposits. The company Vale
from Brazil has made major investments in a coking coal mine. It was followed
by some other players from Australia and India. With the current investment in
infrastructure in the country, and expectation that mining costs in South
Africa will rise considerably over the coming years, Mozambique could gain a
regional competitive advantage.
Mining and refinery equipment, maintenance services and
machinery, automation equipment and other efficiency improving services will be
needed to improve profitability of the current and upcoming mining projects, providing
investment opportunities for company with such expertise.
FOUR: Tourism
The most recent World Economic Forum report on competitiveness
called Mozambique one of the top ten tourist destinations that’s expected to
record greater growth in demand for leisure travel in the next decade. With
pristine beaches and famed hospitality, Mozambique has all the makings of the
next ‘Reunion’ or ‘Seychelles.’ The Government of Mozambique has chosen the
tourism sector as one of the four priority sectors for investment in the
current governmental cycle.
Tourism is also an important source of inclusive business and
poverty reduction in Mozambique. This sector can boost competitiveness, expand
economic opportunity and provide a pathway to prosperity. Tourism is one industry
in the world where the goods or services are consumed at the site of
production. It can also be an excellent mechanism for channelling resources
from rich to poor. Commercial tourism activities provide an opportunity for
local people to participate in direct employment, in providing goods and
services to tourism businesses through the supply chain, but also through
direct interaction with the tourist (for example: crafts, excursions, food and
beverage). The generation of earnings among those local people directly
involved with the industry in turn stimulates indirect spend (of wages) in the
local economy.
FIVE: Tax credits
Mozambique applies the unilateral method for the avoidance of
double taxation of income to resident companies and the permanent establishment
of non-resident companies. This makes the trading environment very favourable
for corporates.
About the Mozvest conference
The Mozvest conference will elaborate on all fields of
prospective investment whilst also providing ample time for networking with
some of Africa’s most preeminent individuals along with international guests.
The conference will be held at Lagoon Beach Hotel, Cape Town on Wednesday, 22
March 2018. For a full itinerary, list of speakers, and to buy tickets, visit Mozvest.com.
