FACIM 2016

The Exhibition

Mozambique is a state located in southeast Africa and it has 26 million inhabitants. Mozambique gained independence from Portugal in 1975 and is on its way towards industrialization. A recent study of the International Monetary Fund ranked Mozambique among the 15 fastest growing economies in the world.

Mozambique’s economic growth rate has consistently ranged from 7 to 10% since the end of the 2000’s. It stems from the rising global demand for energy and the discoveries of considerable oil and gas reserves in the country. This growth is not only vigorous but sustainable. Following a 50% debt cut by the Paris Club, Mozambique heavily invested it its infrastructures and worked on creating a business friendly climate, in order to reduce the share of aid in its GDP. The inflation rate is moderate and under control (around 5%) and the currency is sustainably stable, thanks to ten years of foreign currency accumulation by the Central Bank.

The Market

What makes Mozambique a particularly attractive destination for entrepreneurs is the quality of its investment protection legal framework which, according to the World Bank converges towards OECD standards. The economic growth of Mozambique brings many new investment opportunities especially when it comes the energy sector. The demand for energy grows by 15% every year and the government aims to increase the electricity production by 5 000 MW within five years; Mozambique does have the resources to do so. It holds 10% of the world coal reserves and is among the top ten countries when it comes to proven gas reserves, just behind the United Arab Emirates; The country’s strategic location enables it to supply energy thirsty markets in the region (South Africa, Botswana and Zimbabwe) and in the world (China, India and Japan) in a short amount of time.

One of the difficulties to which biogas producers in Europe are confronted is the cost of feedstock production. They could overcome this challenge by investing in Mozambique’s agriculture. Indeed, the country has 36 million hectares of arable land with an abundant supply of workers. With a 2.5% natural growth rate, Mozambique’s population is not only growing but growing richer. According to Standard Charter Bank, Mozambique’s middle class is scheduled to increase threefold by 2030. Food production, transformation and distribution is therefore a sector worth a look at.

Indeed, the government encourages its entrepreneurs to transform the produced raw materials and provides incentives to do so through tax credits and Special Economic Zones. The opportunities do not only lie the agro-industrial sector but also in the manufacturing sector. Being surrounded by major agricultural exporters such as Tanzania and South Africa, Mozambique can capitalize from its oil and aluminium (second African producer) resources to build a prosperous fertilizer and motor industry to support agricultural mechanization to the region.

FACIM is taking place annually in Maputo, Ricatla and is the most important industry and trade exhibition. In 2015, over 3,000 companies presented food products, agricultural machinery and equipment, irrigation systems, safety engineering, construction and mining machinery as well as textiles and art crafts. The German Federal Ministry for Economic Affairs and Energy again supports the exhibition giving German companies the opportunity to participate at special rates.