Mozambique gets tough on foreign firms

  1. Posted on Tuesday 28 October 2008 - 09:11
    Sam Banda Junior
    Image of Sam Banda Junior
    Sam Banda Junior, AfricaNews reporter in Blantyre, Malawi Photo: Charlotte Gremie & Elise van Bork
    Mozambique is to shut door on foreign firms, which fail to exploit minerals in the country. The southeastern country, which is one of the poorest, wants progress in the mining industry hence taking this stance, Skysports has reported. It has taken onboard 125 foreign companies to exploit minerals.
    Ilha de Mozambique 12
    However, the report said many of the companies are failing to bring the needed results. It has gone on a serious drive to improve its economy with mining being one of the major areas. It has also invested much in tourism and wants to attract more people ahead of the 2010 World Cup in South Africa.

    Trade imbalance

    Imports remain almost 40% greater than exports, but this is a significant improvement over the 4:1 ratio of the immediate post-war years. In 2003, imports were $1.24 billion and exports were $910 million. Support programs provided by foreign donors and private financing of foreign direct investment mega-projects and their associated raw materials, have largely compensated for balance-of-payments shortfalls.

    The medium-term outlook for exports is encouraging, since a number of foreign investment projects should lead to substantial export growth and a better trade balance. MOZAL, a large aluminium smelter that commenced production in mid-2000, has greatly expanded the nation's trade volume.

    Traditional Mozambican exports include cashews, shrimp, fish, copra, sugar, cotton, tea, and citrus fruits. Most of these industries are being rehabilitated. As well, Mozambique is less dependent on imports for basic food and manufactured goods because of steady increases in local production.

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