AfCFTA Africa Economy FDI Mozambique

Foreign Investment: 6 good reasons for choosing Mozambique

1. Africa is on the rise

Looking for growth opportunities? Africa is a continent with huge economic potential. It has been gradually transformed in the past 20 years and we are on the cusp of significant growth, with blossoming entrepreneurship and plenty of opportunities for smart and simple business solutions. Africa is a 1.2bn-person market, a number expected to double over the next 30 years. Generally, business leaders tend to overestimate the challenges of doing business in Africa and underestimate the size and potential on the African continent. Thereby not stating that the African markets are easy to do business in, but emphasising that they are worth the effort, and companies not engaged in African markets risk losing out on one of the 21st century’s great growth opportunities.

2. One of the fastest growing economies in Africa

Mozambique is one of the poorest countries in the world but it will see large-scale investment over the next decade in its oil and gas sector. The discovery of major natural gas reserves has attracted important foreign investors and will bring many more opportunities. Mozambique is set to become one of the top 10 LNG (liquefied natural gas) producers in the world. GDP growth currently stands at 4% per year, which is above the global average and, with impending gas investments, we expect annual growth of more than 10% by 2024.

3. Young population and rapidly expanding labour force

In 2016, 45% of the Mozambican population was below the age of 15, which means that today there are many young people who are seeking employment. The country has a population of 30 million and it is set to double in the next 30 years. A growing population will mean a growing consumer market and labour force. Labour costs are low, ranging between US $64 – $183 depending on the specific sector. The minimum wage for Industry and Manufacturing is US $96.

4. Gateway to Sub-Saharan Africa

Not only is Mozambique itself an important emerging economy, it is also the gateway to southern African markets with a total population of 360 million. Mozambique offers an excellent location as a logistical hub for its neighbouring countries and provides the closest access to the Indian Ocean for most of them. It shares borders with Malawi, South Africa, Swaziland, Tanzania, Zambia and Zimbabwe and has 5 seaports, connected by road and railway. Mozambique is a member of the Southern African Development Community (SADC). One of its benefits includes reduced tariffs on 85% of intra-regional imports. The eventual goal of SADC is a common market with free internal trade, common tariffs, and free movement of labour and capital among member states. SADC is one of the building blocks of the African Continental Free-Trade Area, which aims to extend the same benefits to the African continent, thereby creating the largest free-trade area in the world.

5. Need for sustainable development

The development towards a sustainable future is of high priority in Mozambique and many of the challenges facing Mozambique can be overcome with sustainable solutions. We believe that international investors may offer innovative approves and sector experience that will contribute towards finding such solutions. There are many opportunities in Energy, Agriculture, Water, Infrastructure, Manufacturing, Extractives and Tourism.

6. Insufficient status quo

Currently water and electricity coverage, along with housing, waste management, infrastructure, agriculture and health care are insufficient to meet the needs of the Mozambican population. In the near future, the high population growth and urbanization in Mozambique will amplify the current demand, and open up many business opportunities for foreign investment. Click here for more information.

Source: Beluluane Industrial Park

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