Investment Climate and Business
Opportunities for JapanTokyo, April 16 , 2013

PRESENTATION STRUCTURE• I – Why should you invest in Mozambique• General aspects and strengths• II – Mozambique-Japan Trade• III - FDI Trends in Mozambique• IV – Legal Framework on Investment• V – Investment Opportunities• Transport & Logistics• Mining, Oil & Gas• Energy• AgribusinessWHY MOZAMBIQUE

Pemba Beach – Cabo Delgado Province

Pemba Beach Hotel – Cabo Delgado Province

Train carrying coal to the port of Beira

Sorghum production – Manica Province

Titanium mining – Nampula provinceArtisanal fishingWHERE IS MOZAMBIQUE?
- Strategic & Privileged LocationMozambique has an advantageous geographic positioning, providing
an ideal gateway to both international and regional markets
From Japan to MozambiqueJapan
MediterraneanMiddle East

Via

China/ India

 Johannesburg (HK, Bangkok,Neighboring
Countries

Singapore, Beijing, etc.)

 Nairobi Addis Ababa Dubai LisbonMOZAMBICAN ECONOMY AT A GLANCE
Area: 799.380 km2

Trade:Exports (2011): USD 3.6 billion
Imports (2011): USD 6.3 billion

Population: 23 million•Inflation (CPI): 2.09•

Unemployment Rate: 22%•

Literacy Rate: 50.4%•

Exchange Rate MT/USD (2012):
28.4

Population Growth Rate: 2.8
GDP (Nominal): USD 14.5 billion
Per capita: USD 614
GDP Growth Rate: 7.5%

ECONOMIC GROWTH RATE
(1995-2011)
16,0%

14,8%
12,3%

12,0%

8,0%

7,1%

4,0%
2,2%

1,5%

2011

2010

2009

2008

2007

2006

2005

2004

2003

2002

2001

2000

1999

1998

1997

1996

1995

0,0%

 8,1%, annual growth rate, one of the fastest among developing
countries due to increase in domestic savings, access to international
finance, tehcnology transfer, FDI flows.

WHY MOZAMBIQUE
Rich and Diverse Natural Resources Base: Large
tracts of arable land, forests, natural reserves ofmineral resources, hydrocarbons, water and historical& cultural heritage;

Increasing investment in infrastructures across thecountry (roads, airports…);
Stable Investment Legislation (Predictable, ConsistentTransparent and Protective for Investors);
Political and social stability;

WHY MOZAMBIQUE
100% of investment ownership and control;
Access to preferential markets: SADC, USA, EU,China, India;
Competitive, educated & easily trainable labor force;
One of Africa‘s most attractive economies for FDI；
Welcoming attitude: hospitality, sincerity, friendlinessMOZAMBIQUE-JAPAN TRADEMOZAMBIQUE-JAPAN TRADE
250,000

1000 USD

200,000

150,000
Exports
Imports

100,000

50,00002007

20082009

2010

2 011

Source: INE

Main Products Exported:
Crustaceans, Sesame, Cashew, Titanium,Seafood

Main Products Imported:
Vehicles, Motorcycles, Wheat, Rice, Machineryand its parts, Electric conductors, Chemicals

FDI TRENDS IN MOZAMBIQUE

FDI INFLOWS BY SOURCE COUNTRY
TOP 10 (2010-2012)
FDI (US$)
Spain
Belgium

34,411,670
52,090,450

Italy

71,566,932

USA73,022,398

UK
Mauritius
UAE
China
Portugal
RAS

99,036,800
126,237,876
294,358,778
377,559,640
438,200,865
469,764,632

FDI INFLOWS BY SECTORS
2010 TO 2012
US$Other

289,415,347

Services

Tourism

1,086,582,476

552,943,715

Transport & Comm.

Industry

1,797,544,250

930,668,691

EnergyConstruction

Agriculture

2,311,332,287

774,646,385

1,411,793,131

FOREIGN INVESTORS IN MOZAMBIQUE

MineralResources

Services

Infrastructure

JAPANESE INVESTMENT IN MOZAMBIQUELNG ProjectOff-shore, Rovuma Basin

Coal Mining
Revuboe, Tete

HITACHITechnical ServiceMoatize, Tete

MOZAL Aluminium Smelter,Beloluane, Maputo

Wood chips
MaputoLEGAL FRAMEWORK ON INVESTMENTInvestment Law;Regulation on Investment ;Code of Fiscal Benefits.

REGULATION ON INVESTMENT LAW(FDI MINIMUM REQUIREMENTS FOR ELIGIBILITY FOR EXTERNAL REMITTANCE OF PROFITSAND INVESTED CAPITAL)

 Minimum value of Foreign Direct Investment:
US$ 100.000; or Generates annual sales not less than
US$ 300.000; or Registers annual exports of goods or services notless than US$ 50.000; or Creates and maintains at least 25 directemployment positions for Mozambicans (From 2ndyear of operations).

TAXATION SYSTEM IMPORT CUSTOMS DUTIES Equipment Raw Material Semi-finished products Finished products

5.0%
2.5%
7.5%
20.0%

 VAT

17.0%

 Corporate Tax••

GeneralAgriculture

32.0 %

10.0%

 Personal Income Tax• Minimum• Maximum

10.0%
32.0%

 Withholding Tax

20.0%

INVESTMENT INCENTIVES
GENERAL Exemption of customs duties and VAT on theimportation of equipment contained in class “K”
of the customs tariff Fiscal Credit••

Maputo CityOther Provinces

5%10% Professional Training: 5% deducted from thetaxable income - IRPCINVESTMENT INCENTIVESSPECIFIC BENEFITS
Creation of Basic Infrastructures
Trade and Industry in Rural Areas
Manufacturing & Assembly Industry

Agriculture and Fisheries
Hotels and Tourism
Science and Technology Parks

Large Scale Projects
Rapid Development Zones
Industrial Free Zones

Special Economic Zones

BILATERAL TREATIES & AGREEMENTS
Investment Promotion and Reciprocal Protection
Agreements:
South Africa, Germany, Algeria, Belgium, China, Cuba,Denmark,Egypt,USA,USA (OPIC),Finland,France,Indonesia, Italy, Mauritius, Netherlands, Portugal, Sweden,

United Kingdom, Vietnam, India, Switzerland, Zimbabwe andSpain, Japan (to be signed in 2013).

Agreements to prevent Double Taxation and Fiscal
Evasion:Portugal, Mauritius, United Arab Emirates, the Autonomousand Special Administrative Region of Macau, Italy and South
Africa.

Agriculture&Agro-industry

Fisheries
andAquaculture

Transport
andCommunications

Industry&Commerce

Special EconomicZones

INVESTMENT OPPORTUNITIESEnergyTourismMineralResources

TRANSPORT AND LOGISTICSGEOGRAPHICALCONFIGURATIONRoad transport consideredefficient for distances notexceeding 500Kms.
Therefore better for theEast-West Orientation

Long Distances(North-South):Sea and RailNORTH

EXISTING RAIL LINES
RAIL LINES PLANED IN
THE TRANSPORTSECTOR STRATEGY
LegendAirports

Mapai––Machaila
Massangena–Ribaue––Machoca–– MacuseNhamayabwe
Moatize–Lalaua
Caia– –Inhangoma
Nicoadala
Chitobe– Muxungue
EstaquinhaMontepuez– –Mueda
Murrumbala
Perre –– Mocimboa
Namarroi–-daDondo
Praia.
Lioma- Mutuali

CURRENT SITUATION
OF THE COALLOGISTICS
CENTER

Pre-feasibility study done

SENA LINE OPERATIONAL (Capacity 6 MTPA)(UPGRADE to 20 - 25 MTPA in 3 years)Moatize – Nacala (Via Malawi)
in 3 years

Moatize – Nacala (Bypassing Malawi)
SOUTH

Mining, Oil & Gas

PETROLEUM AND MINERAL RESOURCES
ACTIVITIES IN MOZAMBIQUE
 Top 12 countries with biggest gas resereves in theworld (25% of Africa’s total reserves);
 1,000 mining titles granted to national and foreign
entities; More than 20 billion metric tones of confirmed
coal deposits.

POSSIBLE FUTURE DEVELOPMENTS IN
MINING
Base Metals (Cu,Ni,Zn)
Viability Studies and Exploration
Phosphates
In Monapo- Studies and production
3.5 million tons/annum of phosphates
1,5 million tons/annum of iron
Magnetite and ilmenite
Studies for iron production

1.
2.
3.
4.
5.

Coal
TitaniumConstruction Material
Precious Stones
Heavy Sands

1.
2.
3.
4.
5.

Natural Gas
Alminium
Phosphates
Tantalite
OthersSEDIMENTARY BASINS
Rovuma Basin
Mozambique Basin

Maniamba Basin
Middle Zambezi Basin
Lake Niassa Basin
28

CURENT EXPLORATION CONCESSIONS
SofalaArea A

Sasol

Sasol

(42.5%)

(85%)

Sasol
(90%)

Petronas(42.5%)

ENH

ENH

(15%)

(10%)

M10Buzi
Buzi Hydroc.
(75%)
ENH
(10%)

OnshoreRovumaP&T PSA

16 & 19

Sasol
(70%)

Sasol
(50%)

ENH
(25%)

Petronas
(35%)

ENH

IFC

ENH

(15%)

(5%)

(15%)

Area 4

Area 2 & 5

Area 3 & 6

Eni

Statoil(65%)

Petronas(50%)

Area 1

Anadarko(35.7%)

Anadarko(36.5%)

Maurel &Prom (24%)

Mitsui
(20%)

ENH
(15%)

ENH
(15%)

PTT

Bharat

(10%)

(10%)
Videocon(10%)
PTT(8.5%)

(70%)
ENH

Total

(10%)

ENH
(10%)

(40%)

Galp

Tullow

ENH

(10%)

(25%)

(10%)

Kogas
(10%)

FUTURE OPPORTUNITIES IN NATURALGAS DOWNSTREAM
LNG

ExportHousing

7,000 HaLNG

SocialInfrastructure

Schools
Training Centers
Hospitals

Infrastructure
Development

Ports

18,000 Ha

Roads

PetrochemicalIndustry

GTL

Bulk
Infrastructure

Rail Network

Fertilizers

Airports

MethanolPower

Plastics
Fuels
Pharmaceuticals

ENERGY

EXISTING POWER INFRASTRUCTURE(GEN & TRANS)

Cahora Bassa (2075 MW)

Chicamba & Mavuzi (90 MW)

Matambo - Caia HVTransmission lines

Transmission lines from 66 to 400 kV in AC: 5216 Km and 900 Km in DC at ± 533 kV,
including Substations with a total capacity of 5350 MVA;OPPORTUNITIES• Hydro potential: 12000 MW• Natural gas: reserves &exploitation• Coal: reserves/exploration• Potential for Renewable
Energy development: approx.
5.2 kWm2/day• Growing Electricity Needs:
more than 12 % per annum• Regional market (SAPP):
energyshortagearound2000MW per annum

SAPP(Southern African Power Pool)GENERATION PROJECTS: GEOGRAPHICLOCATION
Benga(2000 MW)

Lúrio
(180 MW)

Cahora Bassa North(1245MW)

Alto-Malema(50 MW)

Mphanda Nkuwa(1500 MW)
Moatize(2400 MW)

Boroma(200 MW)

Mavuzi 2 & 3(60 MW)
Massingir(25 MW)

Kuvaninga(40 MW)

EDM / SASOL(160 MW)

Hydro Gas CoalLupata(600 MW)
Temane(50 MW)
Gigawatt(100 MW)

Aggreko(100 MW)

AGRIBUSINESS INVESTMENTOPPORTUNITIESLAND Land Ownership:
State owned (cannot be bought, sold, mortgaged oralienated) Land Concession:
50 years, renewable for an equal period

DEVELOPMENT CORRIDORS & PRODUCTS
CORRIDORS

MAIN PRODUCTS
CORRID COUNTRIESORS
LINKEDKEY PRODUCTS

Pemba- Malawi
Lichinga
Nacala Malawi,
ZambiaZambezi Malawi,
ValleyZambiacotton, cashew nuts, sesame,beans, maize and timbercotton, cashew nuts, beans,sesame, maize and timbercotton, cashew nuts, sesame,beans, maize, rice, teas,coconuts and timber

Beirarice, sugar, horticultures, poultry
products, chicken and eggs
rice, sugar, horticultures, poultry
products, chicken and eggs
horticultures, chicken and eggs,
fruit and sugar

Zimbabwe

Limpopo RSA ,Zimbabwe
Maputo RSA ,Swaziland

PERSPECTIVES AND CHALLENGES
 Investment in the gas field will double the GDP; To improve the economy’s competitiveness;
 To process the natural resources locally;
 To improve the agricultural sector yield and increase productivity;
 To invest in quality training, particularly in technical areas; To improve logistic infrastructure networks that link to the interior of theCountry;
 To increase domestic savings, enabling the expansion of domestic
investment;

WHAT CAN CPI DO FOR YOU
OFFERS A PACKAGE OF SERVICES TO ASSIST NATIONAL AND FOREIGN INVESTORSFACILITATINGACCESSTO

INCENTIVES

OFFEREDBYTHE

GOVERNMENTANDTHE

ESTABLISHMENT OF THEIR BUSINESSES.

Assist throughinvestment process& aftercare

Assist company
registration, visa, etc.

Provide information
on economy, industry& legislation

CPI Mandate
Facilitation of National & Foreign Investment

Introduce potential
projects, sites,business partners

Arrange meetings
with Government
officials

Issue concessionof fiscal/custom
incentives

ARIGATOU GOZAIMASHITA!
Rua da Imprensa 332 R/C
Caixa Postal 4635
Maputo, MozambiqueTel: +258 21313310
Fax: +258 21313325
Email: galves@cpi.co.mz
bcapitini@cpi.co.mz
srohit@cpi.co.mz