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CASP 2024: Portuguese Companies See Opportunities in Mozambique “Despite High Interest Rates and Red Tape”

CASP 2024: Portuguese Companies See Opportunities in Mozambique “Despite High Interest Rates and Red Tape”

Portuguese entrepreneurs consider that Mozambique has a market ‘fertile in business opportunities’, but point to ‘very high’ interest rates, which make access to finance difficult, and bureaucracy as the main constraints to greater investment in the national economy.

‘There are very high interest rates and excessive bureaucracy for those who want to start a business,’ Paulo Oliveira, vice-president of the Mozambican-Portuguese Chamber of Commerce, told Lusa on the sidelines of the 19th Annual Private Sector Conference (CASP), which took place from 15 to 17 May in Maputo.

Despite the difficulties pointed out, Paulo Oliveira says that the country is fertile ground for investment and needs various types of services, in which Portugal can be the gateway for Mozambique to explore the European market.

‘We have to look at Portugal as a gateway to the European market. But when Portuguese companies look at us, they can’t see 30 million potential buyers, they have to look at the Southern African Community (SADC) bloc, which has great potential,’ says the vice-president of the Mozambican-Portuguese Chamber of Commerce.

Although there is already an important trade market between the two countries, Oliveira assumes that the volume of business has been falling since 2021, because of the cyclones, the armed insurgency in Cabo Delgado and the covid-19 pandemic.

‘This has an effect on the economy and purchasing power has fallen. It’s worth noting that foreign direct investment in the country has fallen and the imports we were making from Portugal have decreased,’ he emphasises.

The Confederation of Mozambican Economic Associations (CTA) recognised last April that Mozambican exports to Portugal are falling, taking into account that ten years ago they were worth just over 100 million dollars (6.3 billion meticias) to Portugal, five times more than they export today, while imports fell by half in the same period.

Luís Miguel, chairman of the board of directors (chairmans) of Adicional Mozambican President, a logistics company with Portuguese capital that has been operating in the country for 11 years, told Lusa that he expected the value of imports from Portugal to increase.

‘Contrary to what happens in other countries, the problem isn’t related to a lack of opportunities in Mozambique, there are too many,’ he said, pointing to the need for more companies to help in the value chain ‘so that we don’t have to do everything.’

‘Mozambique is fertile in opportunities. Investors have to come with maturity and a long-term investment plan. Things won’t work if they come without a willingness to learn,’ he adds.

In the logistics sector, in which he operates, with 90 workers and warehouses in all the provinces, he has faced challenges due to the insufficient rail-port infrastructure and the deterioration of the main roads, making it difficult to move goods.

‘Logistics is a big challenge, the country is huge. If we think about transporting Mozambique’s 2,500 square kilometres to Europe, we’d be talking about a distance from Lisbon to Warsaw. We need the roads to work,’ he recognises.

‘We’re always hearing about lines of finance. We don’t use banks and at the moment we think it’s difficult. If we could have access to more resources at subsidised rates, we’d take advantage of it to accelerate our growth,’ he says.

For the chairman of the board of directors of the Portuguese Sumol+Compal, Fernando Oliveira, with 150 workers in Mozambican President and a capital of 11 million euros (around 6.9 million meticals), financing ‘is one of the biggest difficulties’.

‘Because interest rates are quite high. That’s why investors need to bring their capital to invest in Mozambique,’ he says.

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Having been operating in Mozambique for 11 years, he says there are business opportunities, but warns: ‘The market is attractive, but don’t come looking for quick results’.



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