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 growth forecasts are unchanged following the ruling party's widely-expected victory at October 2014 elections. However, the strong performance of the opposition increases security and policy risks, and these could result in lower growth than we are currently forecasting.

  • Mozambique's monetary policy committee will hold its key interest rate at 7.5% in 2015 as it balances low inflation and growth concerns...

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Mozambique Operational Risk Coverage (9)

Mozambique Operational Risk

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BMI View : Mozambique is one of the most attractive markets in Sub-Saharan Africa (SSA) 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, a largely unskilled labour pool and a heightened political risk profile. In addition, the political instability associated with main opposition party Renamo threatens to hinder a generally 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 score...

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Mozambique Crime & Security

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B MI View : Investors face moderate crime and security risks in Mozambique, with the highest degree of threat emanating from the re-emergence of political violence and instability, which may spread throughout the country and potentially disrupt business operations. As foreigners, investors may also be targeted for criminal activities, from which businesses have limited protection due to the lack of an effective police force. However, this threat is moderated by the low likelihood of interstate conflict, despite the small size of Mozambique's armed forces. Consequently, Mozambique receives a score of 34.6 out of 100 for Crime and Security Risks...

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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...

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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 (1795-1992), 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 these factors into...

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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...

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Mozambique Industry Coverage (12)

Agribusiness

Mozambique Agribusiness

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BMI View: We hold a positive view on the agribusiness sector of Mozambique, as the country is able to tap in to abundant and largely unexploited land and water resources. Of the utmost importance is boosting agricultural productivity by improving irrigation and introducing technology to small-scale farmers. The government has also highlighted the need to improve food and nutritional safety and to facilitate more agricultural reform. Our optimism about Mozambique's agriculture industry largely hinges on the government's continued support for the sector. According to the Ministry of Agriculture's National Plan for Investment in the Agricultural Sector, Mozambique requires investment of USD3.1bn between 2013 and 2017 to ensure that the country is self-sufficient in...

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Autos

Mozambique Autos

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BMI View: BMI remains positive on the outlook for new vehicle sales in Mozambique. Commercial vehicle sales will continue to account for the lion's share of new vehicle sales. However, we expect passenger car sales to increase at a faster rate over the coming five years.

We hold a bullish outlook for the Mozambique autos market for 2014, and we believe vehicle sales increased 15.1% over the year. This comes from an expected 22.4% surge in passenger sales, and a 12% increase in the commercial vehicle segment. We expect this positive momentum to continue into 2015, and we forecast total vehicle sales to increase 17% over the year.

Moreover, domestic autos production in the country has started. In early October 2014, Matchedje Motor sold its first production line vehicle,...

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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

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Food & Drink

Mozambique Food & Drink

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BMI View: Following a slowdown in 2014 due to political tensions, private consumption will accelerate in Mozambique in 2015, boosted by GDP growth and low inflation. Because Mozambique is one of the poorest countries in the world, Mozambicans spend a great proportion of their income on food and drink. Therefore, GDP growth will translate into higher per capita food expenditure. We forecast per capita food consumption (local currency) to grow at a compound annual rate of 12.3% over 2014-2019, encouraging the development of the food & drink industry and the mass grocery retail sector.

Key Forecasts...

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Freight Transport

Mozambique Freight Transport

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BMI View: We forecast robust growth across Mozambique's freight transport modes in 2015, despite a moderate slowdown in real GDP growth. We forecast an economic expansion of 5.9% in 2015, following an estimated 7.2% last year, but expect a rebound to 8.3% in 2016. Growth in the freight transport sector will be driven primarily by the developing coal mining industry in Mozambique, which will power both growth in volumes on road, rail and through the country's ports, but also investment into the sector. A strong outlook for the Mozambican consumer - which will benefit from disinflation as oil prices have fallen - will support air freight and intermodal transport of consumer goods. It is not only domestic demand that will drive these volumes, but also that of landlocked hinterland countries such as Zimbabwe.

Headline Industry Data

  • ...

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Infrastructure

Mozambique Infrastructure

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BMI View: In the face of the dual headwinds of lower coal prices and constrained government revenues, we forecast growth in Mozambique's construction sector will slow in 2015 compared to the previous year, with 6.3% forecast in real terms. Despite lower coal prices, we expect the mining sector to continue to be the major source of investment, although note miners, as well as the prospective players in the offshore gas sector, may lessen their planned capital expenditure given depressed commodity prices, which is the major downside risk to our positive forecasts for the construction sector.

With the country's low quality infrastructure, the government has made its improvement a top priority and promoted private investments. Currently, about USD20bn of transport projects are under way, which include railway and port construction and expansion, as well as critical road upgrades....

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Mining

Mozambique Mining

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BMI View: Mozambique's mining revenue will remain heavily dependent on the country's coal sector, which will leave the sector exposed to continued global coal price weakness. Despite this, coal production growth will continue to exceed gold output growth. Furthermore, the country's openness to foreign investment will support the sector's long term growth outlook.

Coal To Remain Key
Mozambique - Coal Production (mnt) And Gold Production (moz)

Mozambique's mining sector will continue to come...

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Oil & Gas

Mozambique Oil & Gas

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BMI View: A key takeaway from recent exploration and appraisal work in Mozambique is growing confidence that operators have proven sufficient amounts of gas to support large LNG export projects. However, FID delays, falling oil and gas prices, costs, infrastructure constraints and the ongoing regulatory overhaul are challenges the country will face as it moves from exploration to production. While the timing of first LNG is particularly difficult to pin-point, we expect Mozambique to make its presence felt in the global LNG market by early in the next decade.

...

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Pharmaceuticals & Healthcare

Mozambique Pharmaceuticals & Healthcare

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BMI View: Growth in Mozambique's pharmaceutical market will be driven primarily by a growing chronic disease burden and the government's efforts to achieve universal health coverage through its 2014-2019 Health Sector Strategic Plan. Our underlying view that the country will remain reliant on imports is unchanged. However, the opening of a domestic manufacturing facility will somewhat reduce this reliance over the longer term.

Headline Expenditure Forecasts

  • Pharmaceuticals: MZN7.59bn (USD242mn) in 2014 to MZN8.32bn (USD258mn) in 2015; +9.5% in local currency and +6.4% in US dollar terms. Forecast revised upwards from last quarter.

  • Healthcare: MZN34.93bn (USD1.11bn) in 2014 to MZN38.50bn (USD1.19bn) in 2015; +10.2% in...

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Power

Mozambique Power

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BMI View: Mozambique is one of the most attractive markets in Sub-Saharan Africa. The economy is growing rapidly and the government has liberalised the country's investment laws, providing an enabling environment for exploiting Mozambique's abundant energy resources. However, barriers to investment remain, including high levels of corruption and low-level political instability.

The outlook for Mozambique's power sector is good. After decades of civil war, the political situation has stabilised, the economy and population are growing rapidly, and the government has liberalised the country's investment laws, providing an enabling environment for the development of the power sector. A number of major...

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Shipping

Mozambique Shipping

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BMI View: Mozambique's ports will continue to expand rapidly both in terms of their annual throughput and their handling capacity, as there is ongoing investment in the facilities. Although we expect positive growth in box handling, it is dry bulk volumes that are the primary cause of this rapid expansion. Despite hinterland transit traffic, the consumer demand for imported containerised goods through Mozambican ports is relatively low, as is the export of manufactured goods. On the other hand, the development of the coal mining sector will continue to drive gross tonnage volumes up rapidly, and there is a raft of investments being implemented in order to ensure that the country's ports sector is capable of handling them.

Headline Industry Data

  • Gross tonnage throughput at the...

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Telecommunications

Mozambique Telecommunications

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BMI View : BMI's Q315 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 estimate of the market data relating to the end of 2014 and an update of our five-year forecasts to 2019 for the mobile, fixed-line and internet sectors. From the five states...

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