Mozambique Industry

Since the peace was concluded in 1994, Mozambique’s industrial sector has been privatized, developed and grown rapidly. Today, the Mozal aluminum smelter is the country’s largest and most important industry.

Until independence from the colonial power Portugal in 1975, Mozambique had a relatively well-developed industry. Most important was an oil refinery and a cement factory. But a severe shortage of educated labor occurred when 90 percent of Portuguese left Mozambique after the liberation. The industry went backwards and was then largely destroyed in the civil war (c. 1980-1994). Following the peace, the industrial sector has been privatized and grown strongly.

• According to ABBREVIATIONFINDER, MZ stands for the country of Mozambique in geography.

The largest industrial venture is the Mozal aluminum smelter, which has been financed by South African and Japanese companies as well as through loans from the World Bank. The smelter has been of great importance to the country’s economy. This accounts for a quarter of exports as well as for the majority of electricity consumption in the country. The need for raw materials for aluminum production (including bauxite) has contributed to strong growth in the mining industry.

Mozal, a gas pipeline to South Africa (see Natural Resources and Energy) and other giant projects have boosted the construction industry. Cement production tripled from the mid-1990s to 2006. Manufacture of food, beverages and consumer goods has had a favorable development during the first decade of the 2000s.

• COUNTRYAAH: List of top trading partners of Mozambique. Includes countries that imported most shipments from and exported most goods to the country.

In the 2010s, however, growth in the industrial sector leveled off. One problem is that growth has mainly been concentrated on larger industrial companies, while smaller industries have had more difficulty. In order to develop the industrial sector, in the mid-2010s, the government decided to establish special economic zones with favorable tariffs and conditions for export companies, which will contribute to developing links between foreign and domestic industries.

In 2010, a series of major investment agreements were signed with China, including a car assembly plant in the capital Maputo.

However, the industry still has major problems with lack of capital, high borrowing costs, bureaucracy and poor transport routes.

Foreign trade

Mozambique’s trade balance with foreign countries has long been negative, ie imports are larger than exports. Traditionally, agriculture and fisheries have accounted for most of the country’s exports, but since the beginning of the 2000s aluminum and electricity have taken over, and natural gas’s share of exports is growing. A few years into the 2010s, aluminum accounted for just over half of export earnings.

Aluminum exports multiplied during the first decade of the 21st century. As a result, total exports were multiplied. In addition to aluminum, the most important export goods are electricity, natural gas, tobacco, shrimp, sugar, cotton, timber and cashew nuts. Exports are mainly to the Netherlands, South Africa and India.

The most important import goods include vehicles and spare parts, fuel, machinery and metal products. The largest importing countries are South Africa, China, the United Arab Emirates and Portugal.
Trade with the African neighboring countries is greater than official figures show. There is a lot of unregistered border trade.

As a member of the regional cooperation organization SADC, which has entered into a so-called EPA agreement with the EU, Mozambique does not release duties and quotas for its exports to the EU market.

FACTS – FOREIGN TRADE

Merchandise exports

US $ 5,196 million (2018)

Imports

US $ 6,169 million (2018)

Current account

– US $ 4,362 million (2018)

Commodity trade’s share of GDP

83 percent (2018)

Main export goods

aluminum, electricity, shrimp, tobacco, sugar, cotton, cashews

Largest trading partner

South Africa, Zimbabwe, Netherlands, Portugal, USA

Tourism

Tourism was almost completely wiped out during the civil war (c. 1980-1994) but has since become one of Mozambique’s fastest growing economic sectors.

From having around 150,000 visitors in 1995, the number of tourists has increased to around 2 million a few years into the 2010s.

Most tourists come from South Africa. Above all, they come to the capital Maputo or be attracted by the sun and swim on the Indian Ocean coast, but also by visits to the wildlife sanctuaries. The World Bank, donor countries and private funds finance the restoration of the wildlife reserves that were destroyed in the civil war. Several giant reserves cross the borders of neighboring countries. Great Limpopo Transfrontier Park is a so-called peace park, which links the Limpopo National Park in southern Mozambique with the Krüger Park in South Africa and large wildlife conservation areas in Zimbabwe. Largest in the world is the Niassa Reserve in northern Mozambique, with an area similar to that of the Netherlands.

Mozambique is investing in attracting affluent tourists to a small extent rather than mass tourism for budget travelers. Several luxury beach hotels have been built, mainly by South African investors.

The community on the small island of Ilha de Mozambique on the north coast has been included on the UN agency UNESCO’s cultural heritage list. The island previously served as a Portuguese trading station for Indian travelers.

However, the poorly developed infrastructure is an obstacle to the tourism sector.

FACTS – TOURISM

Number of foreign visitors per year

1 639 000 (2016)

tourist revenue

US $ 114,000,000 (2016)

The share of tourist income from exports

3.0 percent (2016)

2007

March

100’s dead in explosion

At least 119 people are killed and more than 500 injured when a series of explosions occur in a military warehouse in a suburb of Maputo. The tragedy triggers upset demonstrations against the military and the defense minister.

February

The President of China is visiting Mozambique

Chinese President Hu Jintao visits Mozambique and agreements are concluded between the two countries on aid, trade, debt amortization and loans for the equivalent of over $ 230 million.

Cyclone causes disaster

A cyclone leads to extensive flooding, which causes severe material damage in southern and central Mozambique. Some 70 deaths are needed and about 400,000 people become homeless.