Mozambique government to review commercial legislation, says PricewaterhouseCoopers

21 March 2006

Johannesburg, South Africa, 21 March – The Mozambican government is to invest US$1 billion on its road network, revalue its currency and review commercial legislation in order to make business easier, PricewaterhouseCoopers (PwC) said recently in Johannesburg at an investor presentation.

Saying that foreign tourists who visit Mozambique complain that the metical has very high denominations – the exchange rate stands at 23,000 per US dollar – and this makes business difficult, PwC said that the currency would be revalued next June.

PwC also said that commercial law would be simplified, national producers would be favored in public tenders, that a tax authority would be set up and that some legal procedures would be reformed.

Government bureaucracy, corruption and some tax laws that are over a century old are seen as of the main obstacles to investment in Mozambique, PwC said.

Foreign investment in Mozambique should increase and some mining and power companies have shown interest in using the country’s natural resources.

Brazil’s Companhia Vale do Rio Doce said in January that it expects to complete the viability study on coal reserves in Moatize by July. The reserves are estimated at 2.5 billion tons.

Vale do Rio Doce and Petrobras have also agreed to analyze the development of natural gas reserves.

Mozambique’s economy is forecast to grow between 6 and 8 percent over the next five years after growth of 10 percent in the last decade. (macauhub)