The country is endowed with important natural resources, such as arable land, forestry, water, energy and mineral resources, including the third largest reserves of natural gas in the continent and should be leading the GDP growth in Africa in the next 10 years.

Mozambique faced an economic slowdown in 2019, mainly due to the negative impact of cyclones Idai and Kenneth, with GDP estimated to grow by 1.9%. Economic activity slowed in 2016–18, to an average of 3.7%, compared with 6.7% for 2015. This reduction resulted mostly from a decline in public and foreign direct investment.

Inflation dropped to 3.9% in 2018 and 3.4% in 2019, reversing the high level reached in 2016 and 2017. Limited currency fluctuations since June 2017, stable food prices, and monetary tightening have supported the low inflation.

GDP is expected to grow by 5.8% in 2020 and 4.0% in 2021. With offshore gas discoveries estimated at 180 trillion cubic feet, the country has the opportunity to diversify the economy while enhancing its resilience and competitiveness. The gas sector could upgrade subsistence agriculture into agribusiness, support Mozambique’s electrification through different energy solutions, and foster other industries such as fertilizers, fuels, and metal-mechanic. It could also enhance macroeconomic stability, with higher revenues contributing to fiscal surpluses and a sovereign wealth fund buffering external shocks.

Infrastructure needs for natural resource-related projects could also trigger a cycle of private and public– private investments. Some state-owned enterprises, particularly those for infrastructure, are well suited to partner with local and international investors on delivering such projects.

The new Cabinet was announced on January 2020 and the Priority Sectors are: Agriculture, Energy, Infrastructure and Tourism.

Source: https://www.afdb.org/en/countries/southern-africa/mozambique/mozambique-economic-outlook

UAE is Mozambique’s fifth largest trading partner, with an estimated foreign trade volume around US$600 million in 2019, a growth above 100% since the opening of Dubai Chamber International Office in Mozambique. UAE was also the leading investment source market for Mozambique between 2014 and 2018. There is a great potential on trade between UAE and Mozambique. There is an existing bilateral agreement between UAE and Mozambique on the promotion and reciprocal protection of investments and on avoiding double taxation on income and tax evasion.

DP World is managing the main port in Maputo (The Capital), the Maputo Port, and on 2018 this port processed 19.5 million tons of cargo, a 7% increase over the previous year (2017) and a record volume. The port also serves the neighboring countries, particularly South Africa, but also Swaziland, Zimbabwe and Botswana, generating a quarter of all customs revenues in the country.

There are synergies and high potential to do business in:

• Agriculture – There are 36 million hectares of arable land, of which only 16% is utilized combined with tremendous irrigation potential from major rivers and the Sector has the best incentives for investors. The bottlenecks of this business are the technical and financial capacity.
• Transport & Logistics – Mozambique is open to receive more UAE based Companies, which a few international airports and ports has an excellent location and a domestic market of almost 30 million being able to connect with inland countries.
• Oil and Gas – with one of the largest gas fields in the world (3rd in Africa), initial investments (bulk infrastructure) already started and there are opportunities for Downstream Projects;
• ICT – Mozambique e-Government Authority the counterpart of Dubai Smart Office, is looking for partners and companies who can invest in Mozambique, taking into account the sector is still virgin with a lot of business potential, they have more than 100 projects to implement and the majority very well suited to SME’s;
• Finance – The Central Bank rose the bar and in order to achieve the new Capital Requirements, local banks are now looking for new shareholders and are open for business but this is being done in a very low profile way to protect their assets. Opportunities for Finance Companies related to SME’s are also important as the market present a gap in this particular segment. There might be an opportunity to connect companies from Dubai International Financial Centre (DIFC) to the Mozambican market.
• Tourism – In terms of tourism, Mozambique has a vast coastline, beautiful beaches, good climate and exuberant flora and fauna. It has a rich culture, including its gastronomy. Due to the exceptional natural and cultural resources that Mozambique brings, there is no doubt that tourism is one of the most realistic and viable options to invest in.