Maputo, Mozambique, 2 July – Cotton is a product that has its origins in Mozambique’s colonial era and the industry is the exception to the current boom in the country’s main exports, officials have said.
The Bank of Mozambique, in a report published last week on 2006, says the national cotton industry is facing stiff competition from internationally produced synthetic fibers.
The increase of price in cotton was insufficient to compensate for the reduction in sales, with export value of the product being US$ 45.7 million, down 19 percent over the previous year, according to Mozambique’s central bank.
The decline in exports is in contrast to the positive results of expanding cotton production in the 2005/2006 growing season, the best in the past 35 years with 123,000 tons, according to figures released recently from Mozambique’s Cotton Institute.
Mozambique’s other main exports all showed double-digit growth and five products recorded boosted sales in the order of three digits.
The biggest increase was in gold, up 325 percent, with the Bank of Mozambique pointing to “more control over production by the authorities” throughout last year as the reason behind this growth.
Tobacco exports grew 155 percent to reach a value of US$ 110 million and re-exports of fuels increased 134 percent to US$ 32 million, primarily due to rising demand in neighboring Malawi and Zimbabwe.
Due to the good growing season, “strengthened by accumulated stocks during the previous campaign”, overseas sales of cashew nuts increased 35 percent to reach a value of US$ 23.7 million.
Also of note is the performance of Mozambique’s sugar sector, which grew by 89 percent in 2006, and aluminum with overseas sales up 35 percent to US$ 1.411 million due to increased raw material process on international markets. ´
Mozambique’s total exports sales rose 26 percent to US$ 5.030 billion, with export increases of 36 percent being higher than imports of 18 percent and thus leading to a reduction in the country’s trade balance.
In the area of imports, increases were mainly in raw materials and intermediate goods (up 26 percent) and fuel (up 33 percent).
The largest reductions in imports were in foodstuffs, particularly sugar (down 52 percent) and beers (down 33 percent).
In the services sector, there was an increased deficit of 21 percent to a value of US$ 372 million due to evolution in the areas of transport, construction and business services, according to Mozambique’s central bank.
Mozambique’s construction sector’s performance was of special note, with growth of 27.3 percent, accelerating by 1.5 percent in relation to the previous year.
This expansion, said the central bank, “results from efforts in course by the authorities to improve public investment in development of infrastructures, particularly the bridges over the Zambezi, Limpopo, and Lugela rivers, as well as extending National Highway 1 and rehabilitating schools and hospitals.”
Mining and extractive industry grew by 13 percent, below initial forecasts, benefiting from the performance of natural gas, mineral waters and coal, whose production reached 40,000 tons last year, more than 1,098 percent compared to 2005.
Agricultural production registered growth of 11.1 percent, accelerating significantly in relation to the 1.5 percent recorded in 2005.
The main foreign investors in Mozambique were South Africa (US$ 114 million) and Mauritius (US$ 30 million).
In the cases of Portugal, the main foreign investor in 2005, France and Japan, FDI was negative due to repayments of commercial loans.
In the banking sector, net turnover for 2006 was the best ever at nearly US$ 94 million, up 154 percent over the previous year.
Mozambique’s central bank governor, Ernesto Gove, described the country’s macroeconomic performance last year as “rather positive”, highlighting the performance of agriculture and exports as motors of economic growth.
Mozambique’s Gross National Production grew 8.5 percent last year and the central bank forecasts growth of 7 percent for 2007. (macauhub)