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.

Mozambique Country Risk

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Core Views:

  • Mozambique's long-term growth prospects are promising on the back of progress in the development of its nascent energy sector. However, with the country unlikely to pass structural reforms to turn any newfound wealth into a diversified economy and higher living standards for the population, the country risks falling into the same commodity trap that has hindered growth across many commodity-dependent states, limiting opportunities in other sectors.

  • Despite the beginnings of progress in Mozambique's nascent energy sector, the government's finances will remain deep in deficit as a recent debt scandal has left the country unable to access large portions of international debt markets and caused donor states to withdraw aid. This will exacerbate the government's struggle against RENAMO's insurgency by forcing cuts to military...

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 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 (12)

Mozambique Agribusiness

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BMI View: Mozambique's agricultural production is currently being significantly impacted by the 2015/16 El Nino episode. The dry weather will dent grains, sugar and livestock production for a second consecutive year in 2016. We hold a relatively positive view on the agribusiness sector of Mozambique beyond 2017. Indeed, Mozambique has been attracting growing interest from foreign investors, and the industry 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...

Mozambique Autos

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BMI View: High interest rates coupled with a deteriorating economic outlook for Mozambique will drag on growth in the vehicle market as consumer and business confidence falls and borrowing costs rise. As a result, we have downgraded our vehicle sales forecast to a contraction of 6.6% in 2016, down from our previous forecast of a 1.7% contraction for the year.

Passenger And Commercial Vehicle Sales
e/f = BMI estimate/forecast. Source: National Sources, BMI

Key Views

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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

Mozambique Food & Drink

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BMI View: Mozambique's food spending will continue to make up significantly the largest part of household spending, with discretionary products such as soft drinks picking only gradually over our forecast period. Private consumption will be boosted by rising employment in the country's key growth natural gas sector. The development of formal retailing will grow gradually in comparison to its Southern Africa regional peers.

Food and Drink Spending

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...

Mozambique Mining

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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...

Mozambique Oil & Gas

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BMI View: FID delays, falling oil and gas prices, costs and infrastructure constraints 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 pinpoint, notably for the onshore terminal, we expect Mozambique to make its presence felt in the global LNG market by early/mid next decade.

Headline Forecasts (Mozambique 2014-2020)

Mozambique Pharmaceuticals & Healthcare

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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.

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Mozambique Power

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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.

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

Mozambique Retail

Mozambique Telecommunications

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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...

Mozambique Telecommunications

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Malawi Mobile Market Will Outperform Mozambique
Malawi And Mozambique Mobile Market (2013-2020)
Source: Operators, BMI

BMI View:The Government of Mozambique plans to merge publicly owned mobile operator mCel with wireline incumbent Telecomunicacoes de Mocambique (TDM). An mCel-TDM merger will reduce operational costs, enabling the enlarged entity to pursue organic subscriber growth in both low-margin rural markets and the niche high-value enterprise segment. We do not, however, expect the merger to lead to a dramatic...

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