Country FilesSouthCountry Profile 2014: MOZAMBIQUE

Fri,27Apr2018

Posted on Wednesday, 05 February 2014 08:32

Country Profile 2014: MOZAMBIQUE

altThe lure of new wealth stirs old tensions

Could appetites whetted by the promise of a resources bonanza derail the fragile peace and prosperity that Mozambique has carved out of its difficult recent past? High-quality coal reserves of 35bn tonnes, and offshore natural gas deposits that may largely exceed 100trn cubic feet have certainly changed the complexion of the political and economic environment.

 

 

TABLE OF CONTENTS:

> TOP MOZAMBICAN COMPANIES

> TOP MOZAMBICAN BANKS

 

theafricareport-mozambique-72dpiThe lure of new wealth stirs old tensions

Frelimo’s dominance of the political scene meets a fresh round of challenges

Construction of one of the world’s biggest LNG plants could begin in 2014

Could appetites whetted by the promise of a resources bonanza derail the fragile peace and prosperity that Mozambique has carved out of its difficult recent past? High-quality coal reserves of 35bn tonnes, and offshore natural gas deposits that may largely exceed 100trn cubic feet have certainly changed the complexion of the political and economic environment.

Managing revenue expectations and healing unresolved tensions in the north will be vital to ensuring the country’s long-term future as it heads towards general elections in October 2014, almost
certain to re-install the ruling Frente de Libertaçao de Moçambique (Frelimo), but with a new president, as Armando Guebuza will have served his two constitutional terms. The elections should confirm the continued rise of the Movimento Democrático de Moçambique (MDM), with its powerbase around the
central port city of Beira. Formedin 2009, the party organised itself strongly for the November 2013 municipal elections, and party leader Daviz Simango will hope to take that momentum through into the next campaign.


DIVISIONS OVER RICHES


The long-running animosity between Frelimo and the Resistência Nacional Moçambique (Renamo) has begun to flare dangerously, spurred by accusations over a lack of revenue sharing with the north, where Renamois based. A decision by Renamo leader Afonso Dhlakamato return to the bush in late 2012 heralded the return of guerrilla attacks on vehicle convoys. In October, a military strike on Renamo’s base in Gorongosa killed Dhlakama’s right-hand man, the MP Armindo Milaco, and Renamo again clashed with the army around Nampula. And it is not just at the top that riches bring division. The authorities admit that higher growth has not led to poverty reduction. A distinct lack of trickle down
of wealth has brought increasing social tensions, including kidnappings, some involving members of the presidential guards. There are also lingering doubts over how committed the government is to the fight against drug smugglers, whouse Mozambique as a staging point.

More than half the population live under the poverty line, while regular floods make subsistence farming vulnerable. Belated attempts to spread the wealth could help dampen down tensions in 2014, as a large chunk of the wage bill goes to education. The government has also significantly raised the budget for
social safety nets, which represented 0.4% of GDP in the 2013 budget, or $57m. Public investments account for around 15% of GDP. Anattempt to improve the business climate for small businesses may help entrepreneurs. Currently the industrial fabric is dominated by South African companies in the agricultural and tourism sectors, Brazilian companies in construction and a few Portuguese banks and telecoms companies.


MANAGING EXPECTATIONS


In the short term, the outlook for economic growth is steadily positive, with the IMF projecting 7% in 2013 and 8.5% in 2014. But the future will be increasingly determined by the practical and political management of Mozambique’s gas and coal bonanza. The IMF believes coal and natural gas production could potentially boost growth by 2% annually during 2013-2023 but, as the experience of Ghana and Zambia has shown, managing expectation sin the face of demands is difficult. And concerns persist over the Mozambique government’s ability to negotiate effectively with the phalanx of corporate lawyers and tax arrangement experts that the large oil companies are deploying to maximise their gains.

Building of a massive liquefied natural gas (LNG) plant could start in 2014 in Cabo Delgado province, with a view to kick off LNG exports before 2020. Italian oil company ENI–which sold a 20% stake
in its Area 4 field to China National Petroleum Corporation – has announced another 5-7trn cubic feet of gas there, and may yet sell a further 10% to the Chinese.

In the north, a large agribusiness venture bringing together Japanese development finance, Brazilian companies and Mozambican land should progress in 2014, despite resistance at the local level. The ProSavana project, modelled on experience in Brazil, is one of several moves towards a more industrial form of farming in Mozambique, centered around the Beira agricultural corridor.

 

TOP MOZAMBICAN COMPANIES

 

Rank 2012Rank 2011CompanySectorCountryTurnover (Thds $)Turnover changeNet profits
229340PETROLEOS DE MOAMBIQUEPETROL. SERVICESMOZAMBIQUE608,95179.65%1,827
349414MCEL MOAMBIQUETELECOMSMOZAMBIQUE336,33928.01%40,698
372-COMP. DE TRANSMISSAO DE MOAMBIQUEELECTRICITYMOZAMBIQUE319,000NA14,000
 

TOP MOZAMBICAN BANKS

 

Rank 2012Rank 2011Bank nameCountryTotal assetsNet interest incomeLoansDeposits
8296BANCO INTERNACIONAL DE MOAMBIQUEMOZAMBIQUE2,271,773293,7581,275,7121,775,063
95104BANCO COMERCIAL E DE INVESTIMENTOSMOZAMBIQUE1,896,786148,7161,194,4991,397,002
142130STANDARD BANK MOZAMBIQUE*MOZAMBIQUE978,22078,525346,880836,286
 


Subscriptions Digital EditionSubscriptions PrintEdition

FRONTLINE

NEWS

POLITICS

HEALTH

SPORTS

BUSINESS

SOCIETY

TECHNOLOGY

COLUMNISTS

Music & Film

SOAPBOX

Newsletters

Keep up to date with the latest from our network :

subscribe2

Connect with us