Golden gateway to Southern Africa

Boundless natural resources, an enviable location and new industries make a bright future

The new year arrived in Mozambique bearing many gifts; a new president and cabinet, and new politics of involvement under the eye of President Filipe Nyusi, who announced at his inauguration: "Good ideas have no political party colors."

"Building a society of inclusion requires more than speeches and declarations of intent," he said. "I shall work to make more visible and real the inclusion that we all talk about and greatly desire."

President Nyusi began his career at the Mozambique Ports and Railways company, before entering politics with FRELIMO, Mozambique's dominant political party of the last 23 years, rising to Minister of Defence before becoming President. He inherits a country on the brink of spectacular growth, with deposits of Liquified Natural Gas expected to bring in huge investment that will help him and his cabinet shape Mozambique into a forward-looking African nation.

That Mozambique is actively searching for investment in all industries is confirmed by Salimo Abdula, chairman of Intelec Holdings, a corporation with interests in telecommunications, oil and agriculture, that is ranked 11th in terms of size in the country.

"Mozambique is open to the world and China is one of our top priorities. Mozambique looks for technology and finance capability in Asia to add value to Mozambique industries," he said.

For President Nyusi, strengthening the relationship with China, one of the country's most valued international partners, is a key priority. As a primary trading partner, China has invested in infrastructure throughout the country and looks set to continue to do so as further deposits of coal, gas and oil are found in the Indian Ocean nation, and more land is opened up to agricultural reforms.

If the president's dreams of creating a solid base of middle-class Mozambicans is to be realized, investment must improve citizens' daily lives, meaning that agriculture, a sector in which almost 80 percent of the popuation is employed, needs to improve yields.

With vast swathes of arable land primed and ready for production, feeding the nation should come easily, as should closing the import/export gap. In 2011, Wanbao Grains and Oils, an agricultural product processing company, established a large-scale rice farm on 20,000 hectares in Gaza Province of Mozambique, where a total of nearly $200 million was invested in the project, mostly in infrastructure, machinery, irrigation and electricity.

Chinese agricultural companies have also provided training to local farmers, raising their per-hectare rice yields from 2,250 kilograms of rice to 6,500 kgs. Improving the lives of Mozambicans goes further than increasing yields on crops, however; it also means improving access to, and use of, the financial sector and energy supply, both of which need to see demand from locals and investment from partners rise.

As the Ministry of Energy has stated, an initial priority was to expand access to electricity, which involved major investment in the form of $700 million to build 57,000 kilometers of electrical grid infrastructure, and increase the percentage of the population with access to electricity from seven percent to over 50 percent today.

More investment is needed in the sector however, to fully realize the production capabilities of Hidroelctrica de Cahora Bassa, a flagship hydroelectric facility in Southern Africa. A major issue is the lack of an electrical grid between the dam, in the north of the country, and the capital, Maputo, in the south, but Chinese investment, via holdings in Portuguese energy giant REN, is addressing this.

As Paulo Muxanga, chairman and CEO of Cahora Bassa said: "We are delighted that China is supporting our economic development. Our country offers exceptional investment conditions."

Meanwhile, in the financical sector, two banks are blazing a trail of innovation and improving access for all Mozambicans. Paulo Sousa, CEO of BCI, who sees great opportunities in local and international expansion, said: "We have many Chinese companies as customers, and several ongoing agreements with Chinese entities, such as the China Development Bank. China is a country where we have greatly increased our commercial relationship."

The feeling is echoed by chariman Joao Figueiredo of Banco nico, whose plan is to massively expand the bank's operations in SMEs, while looking for opportunities with international clients, including the Chinese players in the region. "Mozambique has a long-relationship with China due to its strategic geographical location," he said.

Mozambique, a pearl of Africa, is a diamond waiting to be polished with the help of its primary Asian partner, China.

InFocus provided the story.

(China Daily 03/11/2015 page5)