Mozambique

In-depth country-focused analysis on Mozambique's economic, political and operational risk environment, complemented by detailed sector insight

Mozambique

Our comprehensive assessment of Mozambique's operating environment and the outlook for its leading sectors are formed by bringing together a wealth of data on global markets that affect Mozambique, as well as the latest industry developments that could impact Mozambique's industries. This unique integrated approach has given us an impeccable track-record for predicting important shifts in the markets, ensuring you’re aware of the latest market opportunities and risks in Mozambique before your competitors.

Country Risk

Mozambique Country Risk

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Core Views:

  • Opposition concerns about the Mozambican election's credibility are shared by many observers but the result - a victory of ruling party Frelimo - will not be overturned. A negotiated settlement, which gives Renamo leaders more status, will nonetheless be necessary. The chances of a successful agreement are bolstered by the consensus-based approach President-elect Felipe Nyussi.

  • Mozambique's short-term economic outlook will be hit by stalled investment in its burgeoning natural gas sector - the country's primary growth engine - with ongoing commodity price weakness dimming investor sentiment. As the key Anadarko onshore gas project gets off the ground in 2017, we see growth once again taking off.

  • Mozambique's monetary policy committee will hike rates to 8.75% in the first half of 2016 given the...

Mozambique Operational Risk Coverage (9)

Mozambique Operational Risk

BMI View:

BMI View: Mozambique is one of the most attractive markets in Sub-Saharan Africa on account of its promising economic outlook and investor-friendly business environment, combined with its long coastline and abundant natural resources. Nonetheless, the country is currently operating well below capacity on account of a crumbling internal transport network, poor infrastructure, a largely unskilled labour pool and a heightened political risk profile. In addition, the considerable increase in security risks due to the political instability associated with main opposition party Renamo threatens to damage an otherwise favourable investment environment. This means investors in the country must negotiate a number of obstacles to realise gains from Mozambique's growing economic potential. Consequently, Mozambique scores 34.3 out of 100 for Operational Risk, in 28th position out of 48 states in the region, ranking ahead of...

Mozambique Crime & Security

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BMI View: Investors face a high degree of threat from Mozambique's internal security environment, which reflects both elevated crime rates and a low police force capability. Foreign investors and expatriates are also likely to be targeted for criminal activities, from which businesses have limited protection due to the lack of an effective police force and high levels of endemic corruption. A growing security threat stems from the re-emergence of political violence and instability, which has potential to spread throughout the country and disrupt business operations, discourage tourism and hinder infrastructural development. However, these threats are moderated by the low likelihood of interstate conflict and attacks from international terrorist groups, despite the small size of Mozambique's armed forces. Consequently, Mozambique receives a score of 27.9 out of...

Mozambique Labour Market

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BMI View : Mozambique's labour market is uncompetitive by regional and global standards due to low primary and secondary school enrolment rates, a low life expectancy and strict quotas governing the hiring of foreign workers. Although Mozambique has favourable demographics, the country's inadequate public service provision in health, education and poverty reduction results in a limited urban skilled labour pool. BMI sees little prospect of this situation improving over the medium term. As a result,...

Mozambique Logistics

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BMI View : Mozambique suffers from a significant infrastructure deficit resulting from limited investment and the destruction wrought by the country's civil war (1977-1992), which inhibits the country's ability to meet growing national demand for transport. That being said, despite its limitations, the country is still relatively well developed relative to many of its neighbours, enabling it to serve as a major transport player in regional and international supply chains. Notable benefits to foreign investors and businesses include a well integrated maritime trade and airfreight infrastructure, limited trade bureaucracy, competitive lead times, and low electricity costs. Taking ...

Mozambique Trade & Investment

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BMI View: Mozambique offers a free and attractive trade environment for foreign businesses owing to the country's stable and rapidly growing economy, sizeable natural resources, and tax incentives. The government has adopted a generally favourable attitude to foreign investors and operates a number of free trade and special industrial zones across the country. Nevertheless, despite Mozambique's progress, significant hurdles must be negotiated when conducting business in the country. The most pressing obstacles are a lack of access to credit facilities, inefficient bureaucracy and corruption in state institutions and the private sector. Taking these factors...

Mozambique Industry Coverage (11)

Agribusiness

Mozambique Agribusiness

BMI View:

BMI View: We hold a relatively positive view on the agribusiness sector of Mozambique, as the country is able to produce most of its consumption needs. Mozambique has been attracting growing interest from foreign investors and the agribusiness sector will benefit from this trend in the coming years. However, although the country could be able to tap abundant and largely unexploited land and water resources, its production will not keep up with robust consumption growth. Self -sufficiency regarding corn and poultry will slowly decrease in the coming years, leading to increasing imports.

Agribusiness Market Value
BMI Market Value By Commodity (2005-2019)
...

Autos

Mozambique Autos

BMI View:

We hold a bullish outlook for Mozambique's autos market for 2016, and we believe vehicle sales will continue to increase over the year. We expect this positive momentum to continue over the duration of our forecast period to 2019. Investments in domestic auto production and a growing infrastructure sector will see an increase in average vehicle sales of 14.6% over the five years to 2019.

Passenger Car And Light Commercial Vehicle Sales
(2013-2019)
e/f=BMI estimate/forecast. Source: BMI/INAV
...
Key Views

Commercial Banking

Mozambique Commercial Banking

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Commercial Banking Sector Indicators
Date Total assets Client loans Bond portfolio Other Liabilities and capital Capital Client deposits

Food & Drink

Mozambique Food & Drink

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BMI View: Rising disposable incomes, positive demographic trends and foreign investment will fuel growth in Mozambique's food and drink industry throughout our forecast period to 2020. Nonetheless, staple products will continue to account for the bulk of food consumption, due to very low income levels, and packaged food and drink products will remain unaffordable for a great majority of the population.

Food and Drink Spending
(2013-2020)
e/f = BMI estimate/...

Freight Transport

Mozambique Freight Transport

BMI View:

BMI View: Mozambique's freight transport sector will continue to expand at a robust pace in 2016 and 2017, albeit from a low base in the case of some modes - air freight in particular, for which volumes will remain very low for the foreseeable future. For the most part it will remain the transport related to the primary industries - mining in particular - that will drive growth. Although coal prices have tumbled, the sector will continue to expand rapidly, increasing volumes in road and rail freight. Transit trade from hinterland countries will continue to be important, although Mozambique loses out on most of this business given its proximity to South Africa, the best-developed country in the region.

Our growth forecasts for volumes carried on...

Infrastructure

Mozambique Infrastructure

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BMI View : Mozambique's construction sector is forecasted to grow at 4.7% y-o-y in 2016 and average 6.3% over our 10 year forecast. The main drivers of growth will be improvements to the energy sector, investment in infrastructure to export coal, and the potential development of the natural gas sector. The government's efforts to create a more favourable environment for foreign investment will be tempered by depressed global commodity prices.

Latest Updates And Structural Trends

  • We continue to forecast 4.7% real growth in Mozambique's construction industry value in 2016, reaching an average of 5.9% over the next five years and 6.3% over our 10-year forecast period.

  • The key drivers over the next five years (2016-2020) will continue to be...

Mining

Mozambique Mining

BMI View:

BMI View: Mozambique's mining revenue will remain heavily dependent on the country's coal sector, leaving the sector exposed to continued global coal price weakness. Despite this, coal production growth will continue to exceed gold output growth. Furthermore, both sectors will continue to attract interest from overseas investors.

Mozambique Mining Industry Value
2014e 2015f 2016f...

Oil & Gas

Mozambique Oil & Gas

BMI View:

BMI View: FID delays, falling oil and gas prices, costs, infrastructure constraints and the ongoing regulatory overhaul are challenges the country will face as it moves to develop its massive offshore gas resources. While the timing of first LNG is particularly difficult to pin-point, notably for the onshore terminal, we expect Mozambique to make its presence felt in the global LNG market by early/mid next decade.

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Headline Forecasts (Mozambique 2013-2019)

Pharmaceuticals & Healthcare

Mozambique Pharmaceuticals & Healthcare

BMI View:

BMI View: The Mozambican government's focus on improving healthcare quality and access along with country's growing chronic disease burden will be the main driving factor for growth in the pharmaceutical and healthcare market. However, elevated tensions between political parties, weak intellectual property protection and poor regulatory environment make Mozambique an unattractive market for multinational drugmakers.

Headline Expenditure Forecasts

  • Pharmaceuticals: MZN7.59bn (USD242mn) in 2014 to MZN8.28bn (USD215mn) in 2015; +9.0% in local currency and -11.2% in US dollar terms. Forecast in line with last quarter.

  • ...

Power

Mozambique Power

BMI View:

BMI View: Mozambique will benefit from better power security due to the diversification of the power sector; with major hydropower, gas-fired and coal-fired projects set to come online in our forecast period up until 2024.The market is currently one of the more attractive investments in SSA.

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Headline Power Forecasts (Mozambique 2014-2020)
2014e 2015f 2016f 2017f

Telecommunications

Mozambique Telecommunications

BMI View:

BMI View : BMI 's Southern Africa report analyses the latest industry, regulatory and macroeconomic developments in the telecoms markets in Angola, Botswana, Mozambique, Mauritius and Namibia. It also contains our estimates based on the latest market data and updated five-year forecasts to 2020 for the mobile, fixed-line and broadband sectors. From the five states, Mauritius and Mozambique stand out as dynamic and higher performing markets in terms of penetration and 3G/4G developments along with growth rates.

Latest Updates & Industry Developments

  • Important downward revisions were made to Angola's...

Latest Mozambique Articles

  • We have revised down our CME milk price forecast for 2016 and now see price...

  • We believe that there is currently disconnect between oil prices and fundam...

  • Price-elastic consumption growth and more limited growth in supply will mai...

Latest Mozambique Blogs

Latest Mozambique Podcasts

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