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:

  • Delayed investment into Mozambique's fledgling LNG sector and rising inflation will weigh on real GDP growth in 2016. The economy will see some recovery in 2017 as investment resumes following the likely signing of two important Final Investment Decisions in the latter stages of 2016, but the associated increase in imports that will accompany this investment will moderate any jump in headline growth.

  • President Filipe Nyusi of Mozambique will not enjoy any notable success from his decision to extend an olive branch to the leader of RENAMO, Afonso Dhlakama by way of an invitation to talks aimed at ending the current spate of violence. Instead, attacks will continue to be carried out by both RENAMO, and forces acting on behalf of the ruling FRELIMO.

  • Mozambique's budget balance will remain deep in deficit over our...

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 (11)

Agribusiness

Mozambique Agribusiness

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BMI View: Mozambique's agricultural production is currently being significantly impacted by the 2015/16 El Nino episode which emerged in May 2015. 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, 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...

Autos

Mozambique Autos

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BMI View: A weak currency coupled with a hike in interest rates will continue to keep import prices elevated and borrowing costs high in 2016, weighing down on Mozambican consumers and negatively impacting passenger vehicle sales.

Weak Economy Will Continue Weighing On Vehicle Sales
Vehicle Sales
e/f = BMI estimate/forecast. Source: INAV, BMI

Key Views

  • We maintain our view that vehicle sales will contract by 5.2% in 2016.

  • We expect...

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: The strengthening of Mozambique's consumer outlook will encourage investor confidence in the food and drink industry, stemming from rising household spending and favourable demographics. Ongoing regional drought conditions will raise food prices over the short-term leaving staple products as the largest part of food consumption. Growing formalisation in the drinks sector and higher consumer spending will fuel investment in the MGR sector.

Food and Drink Spending
(2013-2020)
...

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

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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...

Oil & Gas

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)

Pharmaceuticals & Healthcare

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.

  • ...

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.

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

Telecommunications

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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Latest Updates & Industry Developments

  • We now estimate Malawi had 6.39mn mobile telephony subscribers at the end of 2015, up by 10.6% y-o-y and equivalent to a mobile penetration rate of 36.5%. In the five years to 2020, we forecast Malawi's mobile market will reach 9.755mn mobile customers. 3G subscriptions are expected to grow from 20.2% of mobile subscriptions in 2015 to almost 29% of the total market in 2020.

  • BMI estimates Mozambique had around 15.16mn mobile subscriptions at end-2015, representing a 5.4% quarterly decline and a 0.3% y-o-y increase. This gave the country a mobile penetration rate of 58.5%. We now expect 3.5% growth for 2016 and forecast that, by...

Latest Mozambique Articles

  • With global growth continuing to stutter amid unconvincing growth performan...

  • A few key themes stand out when comparing BMI's forecasts against Bloomberg...

  • Many frontier markets are experiencing severe pressure in their fiscal and ...

Latest Mozambique Blogs

Latest Mozambique Podcasts

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