THE INFRASTRUCTURE INDUSTRY IN MOZAMBIQUE Siccode 502 September 2015 Compiled by: CAROLE VEITCH [email protected] JOHANNESBURG OFFICE 7 STURDEE AVENUE, ROSEBANK, 2196 P O BOX 3044, RANDBURG, 2125 TEL: +27 11 280-0880 PORT ELIZABETH OFFICE 1ST FLOOR, BLOCK F, SOUTHERN LIFE GARDENS, 70 2ND AVE NEWTON PARK 6045 P O BOX 505, HUNTERS RETREAT, 6017 TEL: +27 41 394-0600 WEBSITE: WWW.WHOOWNSWHOM.CO.ZA REG NO: 1986/003014/07 DIRECTORS: MAUREEN MPHATSOE (CHAIRPERSON), MICHELLE BEETAR (EXPERIAN), PAXTON ANDERSON (EXPERIAN), ANDREW MCGREGOR (MANAGING) The Infrastructure Industry in Mozambique Contents Siccode 502 CONTENTS 1. INTRODUCTION .......................................................................................................................1 2. DESCRIPTION ..........................................................................................................................1 2.1. Supply Chain ............................................................................................................................. 2 2.2. Geographic Position ................................................................................................................. 3 2.2.1. Key Cities and Regions .................................................................................................... 4 3. SIZE OF THE INDUSTRY ............................................................................................................5 3.1. Key Indigenous and Foreign Players ......................................................................................... 6 4. STATE OF THE INDUSTRY ....................................................................................................... 18 4.1. Local ........................................................................................................................................18 4.1.1. Corporate Actions .........................................................................................................21 4.1.2. Regulations ...................................................................................................................22 4.1.3. Opportunities for the Construction Industry ................................................................23 4.1.3.1. Transport ...............................................................................................................24 4.1.3.2. Energy/Power .......................................................................................................28 4.1.3.3. Water Supply and Treatment ...............................................................................29 4.1.3.4. Healthcare .............................................................................................................30 4.1.3.5. Education ..............................................................................................................30 4.1.3.6. Telecommunications .............................................................................................31 4.1.3.7. Residential Building ...............................................................................................31 4.1.3.8. Commercial ...........................................................................................................32 4.1.3.9. Retail .....................................................................................................................33 4.1.3.10. Hotels and Tourism ...............................................................................................33 4.1.3.11. Mining and Industrial ............................................................................................34 4.2. Continental .............................................................................................................................35 4.3. International ...........................................................................................................................39 5. INFLUENCING FACTORS ......................................................................................................... 41 5.1. Economic Environment ..........................................................................................................41 5.1.1. General .........................................................................................................................41 5.1.2. Effects on the Construction Sector ...............................................................................44 5.2. Socio-Political and Socio-Economic Environment ..................................................................44 5.3. Infrastructure Deficit ..............................................................................................................45 © Copyright Who Owns Whom (Pty) Ltd The Infrastructure Industry in Mozambique Contents Siccode 502 5.3.1. Government Infrastructure Programme Spend ...........................................................46 5.3.2. Foreign Direct Investment (FDI) ...................................................................................46 5.3.3. Private Sector Investment ............................................................................................46 5.3.4. Public-Private Partnerships ..........................................................................................47 5.4. Urbanisation ...........................................................................................................................47 5.5. Local Content ..........................................................................................................................47 5.6. Corruption ..............................................................................................................................48 5.7. Construction Equipment and Materials: Capacity, Quality and Security of Supply ...............48 5.8. Input Costs ..............................................................................................................................50 5.9. Cyclicality ................................................................................................................................51 5.10. Health and Safety Concerns ...................................................................................................51 5.11. Technology .............................................................................................................................51 5.12. Labour Resources ...................................................................................................................52 5.12.1. Training and Skills Development ...........................................................................53 5.12.2. Licensing ................................................................................................................53 5.12.3. Skills Shortages......................................................................................................53 5.12.4. Opportunities for Foreign Professionals ...............................................................54 5.13. Environmental Concerns ........................................................................................................54 6. COMPETITION ....................................................................................................................... 56 6.1. Barriers to Entry .....................................................................................................................56 6.2. Public Procurement and the Tendering Process ....................................................................57 6.3. Research & Development (R&D) and Innovation ...................................................................57 6.3.1. Research & Development .............................................................................................57 6.3.2. Innovation .....................................................................................................................58 7. SWOT ANALYSIS .................................................................................................................... 59 8. FUTURE OUTLOOK ................................................................................................................. 60 8.1. Construction Industry Forecast ..............................................................................................60 8.2. Macroeconomic Outlook ........................................................................................................60 8.3. Political Outlook .....................................................................................................................60 9. INDUSTRY ASSOCIATIONS ...................................................................................................... 61 10. REFERENCES .......................................................................................................................... 61 10.1. Publications ............................................................................................................................61 10.2. Websites .................................................................................................................................62 © Copyright Who Owns Whom (Pty) Ltd The Infrastructure Industry in Mozambique Contents Siccode 502 APPENDIX 1 ................................................................................................................................. 64 Investment Opportunities in the Mozambican Construction Sector .............................................64