Stepping stones

• Chapter summary

Industrialization is the initial stepping stone for the economic development of a country as young as Mozambique, according to Marco Correia, CEO of industrial investment company Valoriza. With very little history of large-scale manufacturing and a heavy reliance on imports, Mozambique undoubtedly lags behind in terms of industrialization. This, however, is not holding back the private sector’s determination to push industrialization efforts through.

The government has put industrialization at the top of its agenda. New Minister of Industry and Trade, Carlos Mesquita, unveiled a strategy for industrialization that envisages a strong focus on agri-business, entrepreneurship, local and rural development, and dialogue with the private sector. The private sector has reorganized to engage the government in productive dialogue, presenting a comprehensive agenda of challenges that need to be tackled together.

For this chapter on Industrialization, The Business Year talked to Rogerio Samo Gudo, head of the newly formed Industrial Association of Mozambique (AIMO), which gathers all major actors from the private sector. One of the main challenges on AIMO’s agenda is the removal of fiscal and financial barriers, such as exorbitant interest rates and tariffs, which stand in the way of the development of a truly competitive industry. Other challenges include the lack of a strong local market for consumption, infrastructure, and training. There is widespread agreement, however, that these are all structural challenges that can be partly solved through the trickle-down effect of industrialization. The COVID-19 crisis brought to the fore another major challenge, notably Mozambique’s reliance on imports. As the world closed down and cross-border movements slowed, panic initially spread through the streets of Maputo. Not only were there no masks or alcohol gel to be found, but even basic food and hygiene products needed to be imported from South Africa. The worst was avoided because the Ressano Garcia frontier remained open for cargo, but Mozambique came to the realization that it needs to boost self-sustainability.

While the challenges might seem overwhelming, voices from the private sector are equally loud about Mozambique’s enormous potential. There is clearly a lot of optimism revolving around the gas industry, a combined USD50-billion investment that will transform the country’s future. Provisions for local content will provide employment to the Mozambican workforce and opportunities for Mozambican industries.

All companies realize the importance of increasing working standards and acquiring international certification to be able to work with international players and partake in the gas boom. However, as Onorio Manuel, new General Director of the Beluluane Industrial Park, told us, it is not all about gas. Mining and agribusiness are already strong sectors in Mozambique, and there is potential to expand these value chains and process the raw materials that the country produces. This year, the Beluluane Industrial Park is celebrating its 20th anniversary and is unveiling an exciting expansion strategy that will allow it to develop all these opportunities and kick off a new era in industrialization. ✖