This week, the Mozambican economy was marked by significant developments, including the start of the 59th edition of the Maputo International Fair (FACIM 2024), new agreements for development projects, an increase in state revenues, growth in spending on civil service salaries and the introduction of a new line of financing for companies.
By June 2024, the government had approved a total of 12 agreements for the implementation of development projects, valued at 46.1 billion meticals (585.9 million dollars). Of this amount, 1.5 billion meticals (20 million dollars) will be provided by the Arab Bank for Economic Development in Africa (BADEA) to support the ‘One District, One Hospital’ initiative.
The World Bank (WB) will provide 33.9 billion meticals (431 million dollars), which will be invested in projects such as ‘Climate Resilient Roads in the North’ and ‘Green Energy Corridors’, as well as revitalising district and community health services.
The African Development Bank (AfDB) will allocate 10.6 billion meticals (134.9 million dollars) to the Programme for the Integrated and Resilient Development of Agro-Industrial Zones in Southern Mozambique (PROCAVA) and the construction of the Songo-Matambo transmission line, which aims to strengthen the country’s transmission network and allow interconnection with the Southern African Development Community (SADC) energy network.
‘The World Bank (WB) will provide 33.9 billion meticals (431 million dollars), which will be invested in projects such as climate resilient roads in the north and green energy corridors, as well as revitalising district and community health services’
In the first half of 2024, state revenue from dividends from its holdings in companies and property rents grew by 37.8 per cent to 7.7 billion meticals (122.6 million dollars).
This increase was driven by Hidroeléctrica de Cahora Bassa, which contributed 5.3 billion meticals, representing an increase of 45.7 per cent on the previous year. Other important contributions came from the National Hydrocarbons Company (ENH), which grew by 571.7 per cent, and Millennium bim, which recorded a 20 per cent increase.
Also in this period, state spending on civil service salaries grew by 10.2 per cent to 101.4 billion meticals. The Mozambican President, Filipe Nyusi, emphasised the importance of the Single Salary Table (TSU), which made it possible to double the minimum wage in the civil service and eliminate previously relevant allowances, incorporating them into the basic salary.
This measure, according to the President, was essential for creating a balance in salaries and reducing existing discrepancies, despite the fact that it generated protests from various professional classes.
FACIM 2024: Industrialisation and Economic Diversification in Focus
The economic week was also marked by the 59th edition of the Maputo International Fair (FACIM 2024), which runs from 26 August to 1 September at the Ricatla International Fair and Exhibition Centre in the Marracuene district of Maputo province.
With the theme ‘Industrialisation: Innovation and Diversification of the National Economy’, the fair brings together around 2,300 national exhibitors and 650 foreign exhibitors from 25 countries, spread over more than ten pavilions and free spaces. FACIM is a platform for exchange and cooperation, with a programme of activities including exhibitions, seminars, promotion sessions and contact exchanges.
During the opening ceremony of FACIM 2024, Mozambican President Filipe Nyusi revealed that Mozambique has seen a ‘significant’ flow of investment in the last five years, totalling more than 785.7 billion meticals (10 billion dollars).
These investments were made in sectors such as energy (40 per cent), tourism (18 per cent), industry (15 per cent), services (14 per cent) and construction (5 per cent), with the rest going to other activities.
The President said that these developments are related to low inflation and a trend of economic growth, accompanied by an increase in the flow of investments, exports and exchange rate stability.
Nyusi also said that the country’s trade balance was increasingly diversified, with exports of primary extraction and energy products, such as electricity, coal, natural gas, aluminium and agricultural products. Export destinations include markets such as India, South Africa, China, the United Kingdom, Italy, South Korea, Singapore and Vietnam, among others.
The head of state called for an increase in the quality and quantity of exported products in order to make Mozambique more competitive, at a time when major projects are underway in the Rovuma basin in Cabo Delgado.
As part of FACIM, the National Investment Bank (BNI), in partnership with the Mozambique Stock Exchange (BVM) and the Confederation of Mozambican Economic Associations (CTA), announced a new financing line of 3.9 billion meticals (50 million dollars) to support the business sector, with a special focus on the manufacturing industry.
This amount was mobilised with the support of partners such as the Zambezi Valley Development Agency and Afreximbank, and includes a special line of support for exporting companies.
The CTA stressed the importance of this initiative in promoting industrialisation, innovation and diversification of the national economy, which are the central objectives of this year’s FACIM.
Felisberto Ruco
