Songo_Bus_Nov 2013

Mozambique

Key facts

  • One of Africa’s fastest growing economies
  • Largest exporter of power to South Africa
  • Strong commercial links with South Africa as its main trading partner
  • High inflows of Foreign Direct Investment
  • Politically stable since the end of civil war in 1992
  • Considered successful example of post-conflict reconciliation

The Republic of Mozambique, known commonly as Mozambique, is a former Portuguese colony which gained independence in 1975. Mozambique is one of Africa’s fastest growing economies, mainly driven by post-conflict reconstruction, achieving an average annual real GDP growth rate of 8.8% between 1996 and 2008. According to the IMF, annual real GDP growth in Mozambique is expected to be in excess of 5% for each year until at least 2014. The country has three ports, Beira, Maputo and Nacala. The largest export partner is the Netherlands at over 55%, with South Africa approximately 10% and Zimbabwe 2%.

Mozambique is currently the largest exporter of power into South Africa, providing approximately 1,450MW via the HVDC transmission lines from the Cahora Bassa hydroelectric dam in the Tete Province. The country is becomingly an increasingly important power player in the region with peak demand growth of 15% in 2011 and 8% per annum expected going forward.

The southern African region has a power capacity shortage, with a current shortfall of 6,000MW and an additional 1,500MW required per annum each year over the next 20 years. Although South Africa has the largest generation demand growth with an additional 40,000MW required by 2025.

Planned transmission expansion projects in Mozambique could provide additional capacity to be transmitted across Mozambique, South Africa and the wider SADC region. The most advanced project is the Regional Transmission Backbone project, (the “STE Project”) which will run from Tete to Maputo and connect into South Africa with planned capacity up to 3,100MW. 

Mozambique has resources of coal, titanium, natural gas, tantalum and graphite. Examples of resource development in the country include Vale’s US$1.3 billion Moatize coal mine, Rio Tinto's Benga coal mine, BHP Billiton Ltd’s US$2 billion Mozal aluminium smelter, Kenmare Resources PLC’s US$500 million Moma titanium minerals mine and Sasol Ltd’s US$1.2 billion gas pipeline project. In addition, the government has supported the development of the Cahora Bassa Dam, a substantial hydro-power facility, which is a source of energy for Mozambique and neighbouring countries, including South Africa and Zimbabwe.

Mozambique covers an area of 801,590 km2 and borders South Africa, Swaziland, Tanzania, Malawi, Zambia and Zimbabwe. The climate is tropical to subtropical with coastal lowlands, plateaus in the northwest and mountains in the west. The highest point is Monte Binga at 2,436m, and the lowest point is the coast along the Indian Ocean. The estimated population is approximately 21.7 million, of which 9.8 million are in the labour force.

Mozambique