Country Report

Author: Vincent Nwanma Data Summary: Mozambique

Central Bank: Bank of Mozambique

International Reserves

$3.353 billion

Gross Domestic Product (GDP)

$15.311 billion

Real GDP Growth




GDP Per Capita—Current Prices


GDP—Composition By Sector








Public Debt (general government
gross debt as a % of GDP)




Government Bond Ratings
(foreign currency)

Standard & Poor’s


Moody’s Outlook

FDI Inflows

$2,663 million

$5,629 million

$5,935 million

Source: Country Economic Report, IMF

In October 2014, Mozambique held its fifth oil and gas licensing round to auction 15 additional blocks to international oil companies. Eleven of these offshore blocks were located in the Rovuma, Angoche and Zambezi basins, with the other four blocks being in the Pande-Temane and Palmeira basins. The success of that licensing round demonstrates Mozambique’s attractiveness to investors and is expected to positively affect the economy going forward.

INP gave bidders up to January 2015 to submit their applications, and they are expected to make their presentations in February. It will evaluate the bids between February and March, after which successful bidders will be notified to discuss concession agreements and final awards.

“The additional granted gas and oil licenses and related future additional investments will boost Mozambique’s GDP in the coming decades, allowing the country to continue to post significant growth rates, and therefore expected improvements for the vast majority of the population,” Ibraimo Ibraimo, CEO of Moza Banco, one of Mozambique’s lenders, says. “Along with direct job generation due to these major projects, it is expected that a relevant set of SMEs will emerge and benefit from the demand that investments [in the] oil and gas sector will generate [transportation, logistics, real estate, financial services and others].”

The partnerships in project development also extend to coal mining, where Mitsui, Japan’s second-largest commodities trading company, plans to invest $1 billion in Brazilian company Vale’s projects in Mozambique, including a mine and coal transportation project. Mitsui also holds a stake in Anadarko’s Mozambique gas concession. Vale, one of the early movers into Mozambique, operates through its local unit, Vale Mozambique, in Moatize, in Tete province. The first phase of its Moatize plant began production in 2011.

Indian coal companies are also quite active in Mozambique’s coal industry. Coal India, the state-owned company, has two concessions on A1 and A2 mining blocks, also situated in the Moatize district of Tete province. Another Indian company, International Coal Ventures, has operations in Benga and Tete. Early mover Rio Tinto recently left Mozambique and sold its mining license, notes Ibraimo.

To accelerate funds mobilization into the economy, Mozambique needs to deepen its financial markets, according to Banco’s Ibraimo. The banking sector is highly concentrated, with the top five banks (out of 18) controlling 85% of the market, he says. “It’s a competitive and diversified market which is yet far from reaching a maturity stage. This will enable the sector to keep posting considerable growth rates in the coming years.”

The capital markets are also at an elementary stage, says Babb of Standard Bank. The government securities market is not well developed, nor is there a yield curve that could help the pricing of financial securities. Bolsa de Valores de Mozambique, the exchange established in 1999, has 32 securities listed on it, but only four are equities, with 28 bonds. The thin capital markets limit participation of foreigners: The only liquid instrument international investors can actively trade in is the Loan Participation Note that was issued on the back of bank loans to a government fishing subsidiary, which trades like a eurobond, says Babb.


According to Ibraimo, the country should, “along with investments in the oil and gas sectors, develop a significant range of economic and social fields,” such as infrastructure, logistics, energy and transportation, and also strengthen its current capacities in education, health services and agriculture. This approach would enable the country to achieve a sustainable and inclusive growth, he said. The World Bank forecasts the Mozambican economy will expand by 8.6% in 2015.

To sustain the interest of foreign investors, the country needs to maintain and reinforce political stability and promote a business-friendly environment. This would encourage sustainable growth, says Ibraimo.


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