Increased competition dilutes Portugal’s economic weight in Mozambique

3 November 2009

Maputo, Mozambique, 3 Nov – Increased competition from other countries has led to economic relations between Portugal and Mozambique becoming less significant, in both trade and direct investment, according to Notícias newspaper of Maputo.

Saying that South African, China and Brazil were the main investors in Mozambique, the newspaper added that in 2008 Portugal was only Mozambique’s fifth largest supplier, which gets 40 percent of its imports from South Africa.

In 1994, the year of Mozambique’s first elections, Portuguese exports to Mozambique were four times greater than the value of Portuguese trade with Angola, whereas today, not only is Angola worth much more, but Cape Verde occupies second place among Portuguese-speaking African Countries.

In 2008, Portugal sold products to Mozambique with a value of 92.3 million euros, that is, 3.3 percent more than in 2007, and in the first half, Portuguese exports to Mozambique reached 54.3 million Euros, 35.3 higher than for the same period the previous year, according to data from the National Statistics Institute (INE).

Worse, says Notícias, is the trend in direct investment with countries such as South African (with projects such as the Mozal aluminium foundry), China and Brazil standing out ahead of Portugal.

In 2007, there was an extraordinary peak, with Portuguese net investment reaching 80.6 million Euros (gross investment of 113.2 million and divestitures of 32.6 million) in areas such as construction, real estate activity and business services. However, between 2004 and 2006, overall, the value did not surpass 21 million Euros.

Last year there was a sharp fall because, among new projects and divestitures, the value was minus 11.2 million Euros.

João Navega, president of the Portugal-Mozambique Chamber of Commerce, said that “Portuguese businesspeople have not stopped investing,” but today there is a lot more external investment from other countries.

Stating that the figures need to be looked at in greater depth, he said that “investments made over the decades, very often without return but which have multiplied, have borne fruit, and given rise to Mozambican companies and groups, which will go on to create positive results.” (macauhub)