Republic of Mozambique the Africa Country Series

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Republic of Mozambique the Africa Country Series 2016 The Africa Country Series Republic of Mozambique Africa Country Series Republic of Mozambique 2016 Acknowledgements Team Leader: Samir S. Amir Lead Researcher: Fatima Attarwala Disclaimer: The findings, interpretations and conclusions expressed do not necessarily reflect the views of the Board of Directors and Members of The Pakistan Business Council or the companies they represent. Any conclusions of analysis based on ITC, IDB, CTS, UNCTSD and WEO data are the responsibility of the author(s) and do not necessarily reflect the opinion of the WTO, IMF or UN. Although every effort has been made to cross-check and verify the authenticity of the data, The Pakistan Business Council, or the author(s), do not guarantee the data included in this work. All data and statistics used may be subject to change. For any queries or feedback regarding this report, please contact [email protected] or fatima@ pbc.org.pk Cover Picture: Sam Ward. It is time to go to Mozambique. Africa Freak. http://africafreak. com/its-time-to-go-to-mozambique ii Republic of Mozambique The Pakistan Business Council: An Overview The Pakistan Business Council (PBC) is a business policy advocacy forum, representing private-sector businesses that have substantial investments in Pakistan’s economy. It was formed in 2005 by 14 (now 47) of Pakistan’s largest enterprises, including multinationals, to allow businesses to meaningfully interact with government and other stakeholders. The Pakistan Business Council is a pan-industry advocacy group. It is not a trade body nor does it advocate for any specific business sector. Rather, its key advocacy thrust is on easing barriers to allow Pakistani businesses to compete in regional and global arenas. The PBC works closely with the relevant government departments, ministries, regulators and institutions, as well as other stakeholders including professional bodies, to develop consensus on major issues which impact the conduct of business in and from Pakistan. It also serves on various taskforces and committees of the Government of Pakistan as well as those of the State Bank, SECP and other regulators with the objective to provide policy assistance on new initiatives and reforms. The PBC conducts research and holds conferences and seminars to facilitate the flow of relevant information to all stakeholders in order to help create an informed view on the major issues faced by Pakistan. The PBC’s Founding Objectives: • To provide for the formation and exchange of views on any question connected with the conduct of businesses in and from Pakistan. • To conduct, organize, set up, administer and manage campaigns, surveys, focus groups, workshops, seminars and field work for carrying out research and raising awareness in regard to matters affecting businesses in Pakistan. • To acquire, collect, compile, analyze, publish and provide statistics, data analysis and other information relating to businesses of any kind, nature or description and on opportunities for such businesses within and outside Pakistan. • To promote and facilitate the integration of businesses in Pakistan into the world economy and to encourage the development and growth of Pakistani multinationals. • To interact with Governments in the economic development of Pakistan and to facilitate, foster and further the economic, social and human resource development of Pakistan. The PBC is a Section 42 not-for-profit Company Limited by Guarantee. Its working is overseen by a Board of Directors elected every three years by the Membership with the Board being headed by a Non-Executive Chairman. The day-to-day operations of the PBC are run by a professional secretariat headed by a full-time, paid CEO. More information on the PBC, its members, and its workings, can be found on its website: www.pbc.org.pk Republic of Mozambique iii The PBC’s Member Companies The PBC’s Member Companies Executive Summary This Country Profile on The Republic of Mozambique is the 5th in the Africa Country Series published by the Research Unit of the Pakistan Business Council (PBC). The Africa Country Series aims to provide some insights into the hereto unexplored markets of Africa with the objective of identifying new markets for exports and investments. For this purpose, the PBC has initiated a series of African Country Profiles to provide a snapshot of the various opportunities available for Pakistani exporters and investors. Country Profiles for Ethiopia, Nigeria, South Africa and Angola have already been published and the Country Profile of Ghana is expected to be published shortly. The table below shows a comparison of Pakistan’s and Mozambique’s economies. With a population of 27 million people, Mozambique’s domestic market is small, but as a member of the Southern African Development Community (SADC), investors in the country gain access to the larger southern African region. Pakistan Mozambique 2013 2014 2013 2014 Data Sources Real GDP (2005 base year) $144 B $152 B $13.6 B $14.6 B World Bank Real GDP Growth (2005 base Authors calculations based on 4.4% 5.4% 7% 7% year) World Bank data Real GDP per Capita $793 $814 $514 $536 World Bank Population 181 M 185 M 26 M 27 M World Bank Trade Deficit $18.6 B $22.8 B $6.1 B $4.0 B Trade Maps FDI, net inflow $1.31 B $1.78 B $6.7 B $5.0 B World Bank Bilateral trade between Pakistan and Mozambique was at $120 million in 2014, consisting almost entirely of Pakistan’s exports to Mozambique which were at $119 million. The bulk of Pakistan’s exports to Mozambique consisted of cereals, salt, sulphur, earth, stone, plaster, limes and cement. Pakistan’s imports from Mozambique of $1.2 million consisted of iron and steel and oil seed, fruits, grain and seeds. Total potential trade between Pakistan and Mozambique, based on 2014’s trade patterns, was $1.68 billion (excluding petroleum products). Pakistan’s potential exports were $1.2 billion which included rice, medicaments, structures and parts of structures, sugar and cement. Potential imports from Mozambique included coke, cotton, lumber, aluminum, tobacco and beans. Total potential imports from Mozambique are $459 million (excluding petroleum products). Mozambique’s trade deficit has decreased by $2 billion from 2013 to 2014. This is primarily due to a decline in imports of petroleum oils and liquefied butanes and an increase in exports of liquefied natural gas, activated carbon and natural mineral products and unwrought aluminum. While India and China are among Mozambique’s top 10 trading partner, the bulk of its trade is conducted with South Africa. The 2015 Investment Climate Statement-Mozambique by the US Department of State stated vi Republic of Mozambique that the IMF predicts that Mozambique will be among the World’s fastest growing economies over the next decade. However, while Mozambique’s FDI has increased steadily over the last decade, there was a decline of $1.7 billion between 2013 and 2014. While Mozambique views FDI as means to drive economic growth and promote job creation with almost all business sectors open to foreign investors, it also suffers from widespread corruption, an underdeveloped financial system, poor infrastructure and high on-the-ground costs. Surface transportation inside the country is slow and expensive, while bureaucracy and port inefficiencies complicate imports. Republic of Mozambique vii viii Republic of Mozambique Table of Contents EXECUTIVE SUMMARY ..................................................................................vi GEOGRAPHIC & SOCIAL INDICATORS ......................................................01 Location .............................................................................................................................................................03 Total Area ...........................................................................................................................................................04 Population .........................................................................................................................................................05 Literacy Rates ....................................................................................................................................................05 Political Structure ..............................................................................................................................................06 Connectivity .......................................................................................................................................................06 MOZAMBIQUE’S HISTORY .............................................................................09 MOZAMBIQUE’S ECONOMY .........................................................................13 GDP ....................................................................................................................................................................15 Country Debt .....................................................................................................................................................18 Exchange Rate ...................................................................................................................................................19 Mozambique’s Trade Deficit as a percentage of GDP ..................................................................................19 Country Risk – Comparison of LIBOR and LUIBOR .................................................................................20 Economic Outlook
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