Thursday 27 November 2014

Mozambique offers Irish business a land of rich opportunity

Published 03/06/2014 | 02:30

The IMF has described Mozambique as one of the most dynamic economies in sub-saharan Africa
The IMF has described Mozambique as one of the most dynamic economies in sub-saharan Africa

THE President of Mozambique, Armando Guebuza, will be welcomed to Aras an Uachtarain today for a three-day state visit – the first visit from the south African country during President Michael D Higgins' tenure in office.

For many, the visit will pass largely unnoticed. As befits all state visits, the usual pomp and ceremony will be on show. It's perhaps not unfair to say, however, that Mozambique doesn't grasp the public's attention as much as a visit from some of the major economic powerhouses of Europe or Asia.

But it would be wrong to dismiss it, especially from a business perspective.

Growth in the former Portuguese colony, which emerged from civil war two decades ago, has averaged 7pc, making it one of Africa's fastest growing economies, although it also remains one of its poorest.

President Guebuza last week said the economy is expected to grow 8pc this year, due to strong farming output and foreign investment in the mining sector.

The International Monetary Fund has described the country as one of the most dynamic economies in sub-saharan Africa.

The city's port capital, Maputo, has seen the rise of a middle class, with glitzy offices popping up alongside colonial-era buildings.

Mozambique's resource-led boom involves investors including Brazil's Vale, London-listed Rio Tinto, Italy's Eni and US oil firm Anadarko, eager to access the country's untapped coal and gas reserves.

Irish companies in the country include Kenmare Resources, Kentz, Cove Energy and Nicholas O'Dwyer Engineering.

Despite the economic potential, however, political tensions remain.

Since April last year, guerrillas aligned to the opposition Renamo party have carried out sporadic raids on police and military posts in parts of central and southern Mozambique.

The Renamo opposition leader, Afonso Dhlakama, said last month that he would run as a candidate in presidential elections in October.

However, Mr Dhlakama also said that he had no interest in "paralysing the economy" and that his forces were not preventing foreign companies from mining and exporting coal.

There are already strong Irish business links with Mozambique. According to the Department of Foreign Affairs and Trade, Irish companies employ more than 6,000 people in the country and have invested more than €1.5bn in recent years. Officials point out that Kenmare was the first international company to get a concession, build a mine and export successfully after the civil war ended, while Cove made the largest ever tax settlement to the Mozambican exchequer after selling their stake in a Mozambican gas field for €2bn in 2012, according to the Department.

The department sees opportunities in the country for Irish companies, particularly in the areas of geo sciences, agri-business and access to World Bank and EU contracts.

To that end, the first Mozambique-Ireland business seminar takes place at Kilmainham Hospital on Thursday.

Irish Independent

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