Mozambique the Best Use of Power

Companies that are now active in the region include Vale, Anadarko, ENI, Statoil and SASOL. Mozambique has a range of natural resources, and the main sectors attracting foreign investors include mining, hydrocarbons, energy, agro industry, fishing, finance and tourism. There have been discoveries of natural gas in Inhambane (2004), Cabo Delgado Provinces (2010) and Rovuma Basin (2012), and large deposits of coal were found in the Tete Province (2008).

Mozambique is one of the world’s fastest growing economies. With coal and titanium a growing source of revenue and largely untapped reserves of oil and gas, Mozambique is expected to become one of the worlds largest exporters of coking and thermal coal and liquefied natural gas. Anadarko Petroleum Corporation and ENI Spa are amongst two of the companies planning gas projects in northern Mozambique.

Economically, things are definitely looking up. But it’s been far from plain sailing, and there are still many challenges facing this country. Mozambique became independent in 1975, after almost 5 centuries as a Portuguese colony. Emigration, a severe drought and a pro-longed civil war then hindered the country’s development until the mid 1990s. 

Mozambique posted some of the worlds largest economic growth rates in the late 1990s and then suffered a major set back due to catastrophic flooding in 2000 and 2001 followed by a drought in 2002. There has continued to be some political unrest, with clashes in 2013 ending in September 2014 when both parties reached a peace deal.

Despite intermittent political instability and series of natural disasters, Mozambique has the potential to become the 3rd largest exporter of liquefied natural gas within the next decade. Democratic elections since the civil war have largely been peaceful, helping the establish a stable foundation for foreign investment. 

However one of the greatest challenges facing the country is the need for investment in transport and logistics infrastructure, including railways, roads and ports. It’s one thing to be able to extract a resource, but you also need to be able to ship material to and from that facility. For example, one of Vale’s biggest challenges in Moatize, Mozambique is logistics. The company has had to invest in two African railroads that connect to ports to be able to transport the coal it extracts.

So there are challenges but also massive opportunities for the Government and the companies investing in Mozambique, if handled sensitively and with a view to the long term gains for the local communities as well as the investors. The opportunity for revenue will need to be balanced with a beneficial impact on the local environment in terms of infrastructure, facilities, training and job creation in a way which is empowering and sustainable for the region.

Did you know?

  • The Portuguese who first arrived in Mozambique at the end of the 15th Century were led by explorer Vasco da Gama
  • While officially called the Republic of Mozambique today, the country was formerly known as Portuguese East Africa
  • Mozambique celebrates its independence every year, on the 25th June, with Independence Day, a national holiday
  • Mozambique has some of the richest coral reefs in the world
  • The currency of Mozambique it the Metical, abbreviated to MZN


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