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2016 Edition

REPUBLIC OF MOZAMBIQUEMINISTRY OF INDUSTRY AND COMMERCE

POSITIONING OF MOZAMBIQUE IN THE INTERNATIONAL TRADE

Trade Flows in Mozambique: Trends and Policy Measures

REPUBLIC OF MOZAMBIQUE

MINISTRY OF INDUSTRY AND COMMERCE

2016 Edition

POSITIONING OF MOZAMBIQUE IN THE INTERNATIONAL TRADE

Trade Flows in Mozambique: Trends and Policy Measures

Positioning of Mozambique in the International Trade 2016 iii

Foreword

This report seeks to analyse the position of Mozambique in the international trade in the period of 2010-2015 vis-à-vis relations with principal trade partners. This analysis essentially systematizes the information signalling the status of various socio-economic factors which are infl uencing the performance of economy.

Mozambique’s trade fl ows, especially the value and volume of imports and exports, are important data to un-derstand the situation of Mozambique in the international trade, and to take corrective measures to the coun-try’s less favourable position, as well as to extract the maximum benefi ts granted by the facilities resulting from the implementation of the various trade agreements of which the country is a signatory.

With the modifi cation of the structure of traditional export products (as fi sheries and primary agriculture products reduced its proportion in the exports structure), the country should explore new opportunities in the international trade, increasing the value of primary products, and the opportunities which are emerging in competitive markets for minerals and hydrocarbons.

There is a need to explore all the avenues offered by the greater openness of international trade, the global population increase, as well as the dynamics in the indicators of the ease of doing business, par ticularly in the regional markets, in the context of the profi le of the least developed countries that Mozambique is part of.

The challenge is to orient the government to defi ne trade policies, to benefi t more from trade opportunities in regional and international markets with the aim of improving the balance of payment, and creating new jobs and using trade as a tool for reducing poverty.

We would like to express our appreciation to the United Nations Development Programme (UNDP), for its assistance to the Ministry of Industry and Commerce (MIC) in the elaboration of this report. This support was provided through capacity building for statistical data collection and analysis related to international trade.

We look forward to continuing to engage with UNDP in the future on trade related matters that will enable us to make informed decisions that help the country to use trade as an additional tool in economic growth and development.

Maputo, 12th December 2016

Minister of Industry and Commerce

Ernesto Max Tonela

TECHNICAL NOTE

TITLE:

Positioning of Mozambique in the International Trade

REVIEW:

Sabado Matsolo, Cláudia Langa, José Leonardo, Agonias Macia, Calado Silva, Samuel Zita, Masaki Mifune and John Barns.

PRODUCTION:

Ministério da Indústria e Comércio (MIC)

Direcção de Planifi cação e Estudos – Cláudia Correia Langa e José LeonardoDirecção Nacional Comércio Interno – Isabel SimangoEnhanced Integrated Framework (EIF) – Herlander Namuiche, Samuel ZitaUnited Nations Development Programme (UNDP) – Masaki Mifune

LAYOUT:

Elografi co

EDITION:

1st Edition 2016

PRINTING

500 copies

PUBLISHED BY:

REPUBLIC OF MOZAMBIQUE

MINISTRY OF INDUSTRY AND COMMERCE

Praca 25 de Junho, n° 300Tel: +258 21 320401www.mic.gov.mz

WITH SUPPORT FROM:

UNITED NATIONS DEVELOPMENT PROGRAMME (UNDP)

Av. Kenneth Kaunda 921/931, P.O Box 4595www.undp.org

Positioning of Mozambique in the International Trade 2016 v

Contents

Abbreviations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . viii

Executive Summary. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ix

Chapter I. Overview of Trade Trends in Mozambique . . . . . . . . . . . . . . . . . . . . . . . . . . 1

1.1 The Landscape of Trade in Mozambique . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

1.2 Trade Partners in Mozambique . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

Chapter II. Trend Analysis of Trade Products in Mozambique . . . . . . . . . . . . . . . . . . . . . . 5

2.1 Trade Products Portfolio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

2.2 Main Cash Crops and Foods Exports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

2.3 Main Food Imports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21

Chapter III. Global & Regional Trends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27

3.1 Demographic Trends and Food Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27

3.2 Demographic Trends and Socio-Economic Structure. . . . . . . . . . . . . . . . . . . . . . . 29

3.3 Energy Demand and Industrialization. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33

3.4 SDGs and Trade. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38

Chapter IV. Policy and Institutional Framework for Trade in Mozambique . . . . . . . . . . . . . . . . 40

4.1 Policy and Institutional Framework in the Trade Sector . . . . . . . . . . . . . . . . . . . . . . 40

4.2 International Trade Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44

4.3 Business Environment in Mozambique . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47

Reference . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50

Figures

Figure 1.1: Degree of trade openness 2000-2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

Figure 1.2: Current account, trade and FDI fl ow in Mozambique 2010-2014 . . . . . . . . . . . . . . 2

Figure 1.3: Principal trade products exported from Mozambique 2000 and 2015. . . . . . . . . . . . 3

Figure 1.4: Commodity price trend (Index, 2005=100). . . . . . . . . . . . . . . . . . . . . . . . . . 3

Figure 2.1: Megaproject/extractive industry export value 2000-2015 (selected prducts) . . . . . . . . 6

Figure 2.2: Cash crops and foods exports value 2000-2015 (selected products) . . . . . . . . . . . 6

Figure 2.3: Exports destinations by product (2011-2015 avg.). . . . . . . . . . . . . . . . . . . . . . 7

Figure 2.4 Mozambique cashew nuts exports and global trends . . . . . . . . . . . . . . . . . . . . 8

Figure 2.5: Mozambique cashew nuts export destinations. . . . . . . . . . . . . . . . . . . . . . . . 9

Figure 2.6: Mozambique sesame exports and global trends . . . . . . . . . . . . . . . . . . . . . . 10

Figure 2.7: Mozambique sesame export destinations . . . . . . . . . . . . . . . . . . . . . . . . . . 10

Figure 2.8: Mozambique almonds exports and global trends . . . . . . . . . . . . . . . . . . . . . . 12

Figure 2.9: Mozambique almonds export destinations . . . . . . . . . . . . . . . . . . . . . . . . . . 12

Figure 2.10: Mozambique cotton exports and global trends . . . . . . . . . . . . . . . . . . . . . . . 14

Figure 2.11: Mozambique cotton export destinations . . . . . . . . . . . . . . . . . . . . . . . . . . 14

Positioning of Mozambique in the International Trade 2016 vii

Tables

Table 1.1: Mozambique’s major trading partners (2011-2015 avg.) . . . . . . . . . . . . . . . . . . . 4

Table 2.1: Main export and import products in Mozambique . . . . . . . . . . . . . . . . . . . . . . 5

Table 2.2: Cashew nuts export world ranking . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

Table 2.3: Sesame exports word ranking. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

Table 2.4: Almonds export world ranking. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

Table 2.5: Cotton exports world ranking . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

Table 2.6: Banana exports world ranking . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

Table 2.7: Sugar exports world ranking. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

Table 2.8: Crustaceans exports world ranking . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21

Table 4.1: Preferential Trade Agreements - Mozambique . . . . . . . . . . . . . . . . . . . . . . . . 45

Table 4.2: Bilateral investment agreements – Mozambique . . . . . . . . . . . . . . . . . . . . . . . 46

Table 4.3: Doing Business 2016 (comparison w/selected countries in Sub-Saharan Africa) . . . . . . 47

Table 4.4: GCI 2015-2016 global ranking (comparison w/selected countries in Sub-Saharan Africa). . 48

Table 4.5: LPI 2016 Sub-Saharan Africa ranking (comparison w/selected countries) . . . . . . . . . . 49

Boxes

Box 1.1: Volatile commodity prices destabilize the economy . . . . . . . . . . . . . . . . . . . . . . 3

Box 2.1: Food security and trade. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24

Box 3.1: Changing dietary habits and diversifi cation of foods demand . . . . . . . . . . . . . . . . . 29

Box 3.2: Consumption in developing & emerging countries – Bottom of Pyramid . . . . . . . . . . . . 33

Box 3.3: COP 21 and energy demand forecast – IEA Bridge Scenario . . . . . . . . . . . . . . . . . 34

Box 3.4: Global Value Chains (GVCs) – opportunities and risks . . . . . . . . . . . . . . . . . . . . . 36

Box 3.5: Trade and Development Agenda . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38

Box 4.1: Functions attributed to the Ministry of Industry and Commerce . . . . . . . . . . . . . . . . 41

Box 4.2: Trade related issues coordination mechanism – Aid for Trade and EIF in Mozambique . . . . 43

Box 4.3: Logistics Performance Index (LPI) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49

vi Positioning of Mozambique in the International Trade 2016

Figure 2.12: Mozambique banana exports and global trends . . . . . . . . . . . . . . . . . . . . . . 16

Figure 2.13: Mozambique banana export destination . . . . . . . . . . . . . . . . . . . . . . . . . . 16

Figure 2.14: Mozambique sugar export/import and global trends . . . . . . . . . . . . . . . . . . . . 18

Figure 2.15: Mozambique sugar export destinations . . . . . . . . . . . . . . . . . . . . . . . . . . 18

Figure 2.16: Mozambique crustaceans exports and global trends . . . . . . . . . . . . . . . . . . . 20

Figure 2.17: Mozambique crustaceans export destinations . . . . . . . . . . . . . . . . . . . . . . . 20

Figure 2.18: Food products imported by Mozambique 2001-2015 . . . . . . . . . . . . . . . . . . . 22

Figure 2.19: Population trends and projections for Mozambique . . . . . . . . . . . . . . . . . . . . 22

Figure 2.20: Wheat import origins . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23

Figure 2.21: Maize import origins. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23

Figure 2.22: Rice import origins . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24

Figure 2.23: Frozen fi sh imported by Mozambique & import origins . . . . . . . . . . . . . . . . . . . 25

Figure 2.24: Tomatoes imported by Mozambique & Fresh tomatoes import origin . . . . . . . . . . . 25

Figure 2.25: Mozambique meats and live animals imports and import origins . . . . . . . . . . . . . 26

Figure 3.1: World population trends 1980-2050 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28

Figure 3.2: Cereals production, consumption and net import – Sub-Saharan Africa (excl. South Africa) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28

Figure 3.3: Calorie intake per capita in LDCs and Developed countries. . . . . . . . . . . . . . . . . 29

Figure 3.4: World demographic trends by age group 1980-2050 . . . . . . . . . . . . . . . . . . . . 30

Figure 3.5: World population median age trends 1990-2050. . . . . . . . . . . . . . . . . . . . . . . 30

Figure 3.6: Demographic age pyramid - Mozambique. . . . . . . . . . . . . . . . . . . . . . . . . . 31

Figure 3.7: World urban population growth rates & Rural/urban population trends for Mozam-bique1990-2050 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31

Figure 3.8: Trend of urbanization and services value added (% of GDP) 1980-2014 . . . . . . . . . . 32

Figure 3.9: Mobile and fi xed telephone subscription & International tourism arrivals and revenues . . 32

Figure 3.10: Consumption patterns by sector and income segment – 2010 (average of 92 countries) . . 33

Figure 3.11: Energy demand by sector & Total primary energy demand by resource . . . . . . . . . 33

Figure 3.12: Electricity generation trend by resource – IEA bridge scenario . . . . . . . . . . . . . . 34

Figure 3.13: Industry, value added (% of GDP) 2014 – Sub-Saharan Africa + Gulf States . . . . . . . 35

Figure 3.14: Fuel price trends and world trade (exports) 2002-2014 . . . . . . . . . . . . . . . . . . 36

Figure 3.15: Fuel price trends and global GDP & Government revenue in oil producing countries . . . 37

Figure 3.16: Fuel price trend and global FDI trend & Mozambique and Nigeria FDI trend . . . . . . . 37

Figure 3.17: Global development initiatives related to trade agenda . . . . . . . . . . . . . . . . . . 39

Figure 4.1: Organigram – Ministry of Industry and Commerce. . . . . . . . . . . . . . . . . . . . . . 41

Figure 4.2: Policy and strategic framework – Ministry of Industry and Commerce. . . . . . . . . . . . 43

Figure 4.3: Average MFN applied duties 2014 – Mozambique . . . . . . . . . . . . . . . . . . . . . 46

Figure 4.4: LPI – Mozambique 2010 vs 2016. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49

Positioning of Mozambique in the International Trade 2016 vii

Tables

Table 1.1: Mozambique’s major trading partners (2011-2015 avg.) . . . . . . . . . . . . . . . . . . . 4

Table 2.1: Main export and import products in Mozambique . . . . . . . . . . . . . . . . . . . . . . 5

Table 2.2: Cashew nuts export world ranking . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

Table 2.3: Sesame exports word ranking. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

Table 2.4: Almonds export world ranking. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

Table 2.5: Cotton exports world ranking . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

Table 2.6: Banana exports world ranking . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

Table 2.7: Sugar exports world ranking. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

Table 2.8: Crustaceans exports world ranking . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21

Table 4.1: Preferential Trade Agreements - Mozambique . . . . . . . . . . . . . . . . . . . . . . . . 45

Table 4.2: Bilateral investment agreements – Mozambique . . . . . . . . . . . . . . . . . . . . . . . 46

Table 4.3: Doing Business 2016 (comparison w/selected countries in Sub-Saharan Africa) . . . . . . 47

Table 4.4: GCI 2015-2016 global ranking (comparison w/selected countries in Sub-Saharan Africa). . 48

Table 4.5: LPI 2016 Sub-Saharan Africa ranking (comparison w/selected countries) . . . . . . . . . . 49

Boxes

Box 1.1: Volatile commodity prices destabilize the economy . . . . . . . . . . . . . . . . . . . . . . 3

Box 2.1: Food security and trade. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24

Box 3.1: Changing dietary habits and diversifi cation of foods demand . . . . . . . . . . . . . . . . . 29

Box 3.2: Consumption in developing & emerging countries – Bottom of Pyramid . . . . . . . . . . . . 33

Box 3.3: COP 21 and energy demand forecast – IEA Bridge Scenario . . . . . . . . . . . . . . . . . 34

Box 3.4: Global Value Chains (GVCs) – opportunities and risks . . . . . . . . . . . . . . . . . . . . . 36

Box 3.5: Trade and Development Agenda . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38

Box 4.1: Functions attributed to the Ministry of Industry and Commerce . . . . . . . . . . . . . . . . 41

Box 4.2: Trade related issues coordination mechanism – Aid for Trade and EIF in Mozambique . . . . 43

Box 4.3: Logistics Performance Index (LPI) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49

Positioning of Mozambique in the International Trade 2016 ix

Executive Summary

This report was prepared by the Ministry of Indus-try and Trade with the support of UNDP to illustrate Mozambique’s position in relation to business/trade opportunities with its economic partners. Mozam-bique’s rich endowment in natural resources rep-resent signifi cant trading opportunities that could transform the country from one which is dependent on agricultural, marine, mineral and energy based exports, to a major player in the global market of value added products, creating the fi scal space for sustainable investment in its increasingly young population and socio-economic infrastructure. Yet, such opportunities often present a complex set of macro-economic challenges, and in an increasingly globalized economy, Mozambique will need to care-fully consider ways to improve its productivity and competitiveness and promote greater diversifi ca-tion through greater integration into the global value chains. To address such challenges, evidence-based policy coordination is a condition sine qua non to ensure effective policy implementation and meaningful economic transformation.

The trade landscape in Mozambique has changed signifi cantly in the last 15 years with substantial increases in both imports and exports and there is evidence that points to an intensifi cation of this transformation over the next fi fteen years. Chap-ter I looks at the changing nature of trade in Mo-zambique and the growing importance of trade for the economy. Mozambique’s historical exports like cashew, cotton and shellfi sh, still signifi cant two decades ago, have been overtaken by the export in the minerals and energy sector. As a result of inte-grating into the regional and global trade networks, the importance of trade for the Mozambican econo-my had grown to attain a value equivalent to 100% of GDP by 2012. Substantial growth in imports over the period 2010-14 was driven by Foreign Direct In-vestments in extractives sector.

Mozambique’s abundant natural resources, not only in terms of minerals but including agricultural land and fi sheries, potentially place the country in a strong position as a major exporter of commodities. Chapter II analyses the signifi cance of changes in

Mozambique’s trade product portfolio and principle trade partners. The export of minerals has grown, particularly in the last 5 years, with much greater growth anticipated in the future. However, the ex-port and import of agricultural and food products is also signifi cant given its importance for sustain-ing livelihoods and food security, and its impact on the balance of trade. This chapter focusses on the trade volume and value of a set of key agricultural and marine exports and changes in global market share. Mozambique is a net importer of food and the growth of food imports has closely correlated with population growth, which is expected to grow exponentially suggesting that the import of basic foods will continue to increase. The implications and impact of trade policy and food security policy are intertwined, emphasizing the importance of a coor-dinated effort among the key ministries and institu-tions responsible for agriculture and trade policy.

Growth in Mozambique’s trade has resulted in its re-integration into the regional and global econ-omy. Chapter III looks at key global trends and their impact on socio economic development and on trade. The world’s population is growing and becoming more urbanized and these trends are creating a new dynamism for Africa and for Mozambique. Population growth can contribute positively to domestic production and the bal-ance of trade. Mozambique’s young population and growth in the working age population could bring a signifi cant demographic bonus for the country. However, if domestic production of food is unable to keep pace with population growth, dependence of food imports will increase. Global energy demand increased by over 50% in the pe-riod 1990-2013. Although this growth is expected to continue, the world leaders are determined to curb growth in the demand for energy to meet the COP 21 global target. Coal and oil has been the major energy sources for power generation for many decades, but their relative importance is declining with natural gas becoming more im-portant, a trend which is potentially positive, to a great extent, for Mozambique. However, fl uc-

viii Positioning of Mozambique in the International Trade 2016

Abbreviations

ACP African, Caribbean and Pacifi c Countries

AfT Aid for Trade

AGOA African Growth and Opportunity Act

CAADP Comprehensive African Agriculture Development Program

COMESA Common Market for Eastern and Southern Africa

COP Conference of the Parties

DTIS Diagnostic of Trade Integration Study

EAC East African Community

EIF Enhanced Integrated Framework

ENDE Estratégia Nacional de Desenvolvimento (National Development Strategy)

FAO Food and Agriculture Organization

FDI Foreign Direct Investment

GSP Generalized System of Preferences

GVCs Global Value Chains

ICT Information and Communication Technology

IEA International Energy Agency

INE Instituto Nacional de Estatistica (National Statistics Institutions)

LDCs Least Developed Countries

LPI Logistics Performance Index

MASA Ministro da Agricultura e Segurança Alimentar (Ministry of Agriculture and Food Security)

MDG Millennium Development Goals

MEF Ministro de Economia e Finanças (Ministry of Economy and Finance)

MFN Most Favoured Nation

MIC Ministro da Indústria e Comércio (Ministry of Industry and Commerce)

MMAIP Ministro do Mar, Águas Interiores e Pescas (Ministry for the Sea, Inland Water and Fishery)

MTOE Million Tonnes of Oil Equivalent

OECD Organisation for Economic Co-operation and Development

PES Plano Economico e Social (Social Economic Plan)

PEDSA Plan for the Development of the Agricultural Sector

PPP Purchasing Power Parity

PQG Programa Quinquenal do Governo (Government’s fi ve-year programme)

PTA Preferential Trade Agreement

SADC Southern African Development Community

SDGs Sustainable Development Goals

SDT Special and Differential Treatment

TWh Terawatt Hour

UNDP United Nations Development Programme

UNCTAD United Nations Conference on Trade and Development

WEF World Economic Forum

WTO World Trade Organization

Positioning of Mozambique in the International Trade 2016 ix

Executive Summary

This report was prepared by the Ministry of Indus-try and Trade with the support of UNDP to illustrate Mozambique’s position in relation to business/trade opportunities with its economic partners. Mozam-bique’s rich endowment in natural resources rep-resent signifi cant trading opportunities that could transform the country from one which is dependent on agricultural, marine, mineral and energy based exports, to a major player in the global market of value added products, creating the fi scal space for sustainable investment in its increasingly young population and socio-economic infrastructure. Yet, such opportunities often present a complex set of macro-economic challenges, and in an increasingly globalized economy, Mozambique will need to care-fully consider ways to improve its productivity and competitiveness and promote greater diversifi ca-tion through greater integration into the global value chains. To address such challenges, evidence-based policy coordination is a condition sine qua non to ensure effective policy implementation and meaningful economic transformation.

The trade landscape in Mozambique has changed signifi cantly in the last 15 years with substantial increases in both imports and exports and there is evidence that points to an intensifi cation of this transformation over the next fi fteen years. Chap-ter I looks at the changing nature of trade in Mo-zambique and the growing importance of trade for the economy. Mozambique’s historical exports like cashew, cotton and shellfi sh, still signifi cant two decades ago, have been overtaken by the export in the minerals and energy sector. As a result of inte-grating into the regional and global trade networks, the importance of trade for the Mozambican econo-my had grown to attain a value equivalent to 100% of GDP by 2012. Substantial growth in imports over the period 2010-14 was driven by Foreign Direct In-vestments in extractives sector.

Mozambique’s abundant natural resources, not only in terms of minerals but including agricultural land and fi sheries, potentially place the country in a strong position as a major exporter of commodities. Chapter II analyses the signifi cance of changes in

Mozambique’s trade product portfolio and principle trade partners. The export of minerals has grown, particularly in the last 5 years, with much greater growth anticipated in the future. However, the ex-port and import of agricultural and food products is also signifi cant given its importance for sustain-ing livelihoods and food security, and its impact on the balance of trade. This chapter focusses on the trade volume and value of a set of key agricultural and marine exports and changes in global market share. Mozambique is a net importer of food and the growth of food imports has closely correlated with population growth, which is expected to grow exponentially suggesting that the import of basic foods will continue to increase. The implications and impact of trade policy and food security policy are intertwined, emphasizing the importance of a coor-dinated effort among the key ministries and institu-tions responsible for agriculture and trade policy.

Growth in Mozambique’s trade has resulted in its re-integration into the regional and global econ-omy. Chapter III looks at key global trends and their impact on socio economic development and on trade. The world’s population is growing and becoming more urbanized and these trends are creating a new dynamism for Africa and for Mozambique. Population growth can contribute positively to domestic production and the bal-ance of trade. Mozambique’s young population and growth in the working age population could bring a signifi cant demographic bonus for the country. However, if domestic production of food is unable to keep pace with population growth, dependence of food imports will increase. Global energy demand increased by over 50% in the pe-riod 1990-2013. Although this growth is expected to continue, the world leaders are determined to curb growth in the demand for energy to meet the COP 21 global target. Coal and oil has been the major energy sources for power generation for many decades, but their relative importance is declining with natural gas becoming more im-portant, a trend which is potentially positive, to a great extent, for Mozambique. However, fl uc-

Positioning of Mozambique in the International Trade 2016 1

1.1 The Landscape of Trade in Mozambique

Overview of Trade Trends in Mozambique

C h a p t e r I

Political reforms and sound macro-economic man-agement have been important factors in stimulating economic development in Mozambique over the past 15 years, securing one of the highest growth rates for African non-oil economies with annual real GDP growth over the period 2002-2012 averaging 7.5%.

Economic reforms since 2000 have resulted in the gradual reintegration of the economy into both re-gional and global markets, directly impacting on the country’s trade structure and enabling trade to play an important role in facilitating economic growth.

The trade landscape in Mozambique has changed signifi cantly over the last 15 years, as both imports and exports have grown dramatically as a result of Foreign Direct Investment (FDI) in mega-projects, and this dynamic is likely to continue for the fore-seeable future as the country’s trading potential be-comes a reality, particularly in the extractive sector.

The Trade Openness Index measures the relation-ship between the combined value of imports and exports in relation to the size of GDP. Figure 1.1 il-lustrates the changing importance of trade for the Mozambican economy. There has been a notable change in Mozambique’s score on the index since 2000 in comparison to regional and global averages emphasizing the steady re-integration of Mozam-bican trade into regional and global trade networks.

A closer examination of the value of imports and exports as a percentage of GDP over the same pe-riod shows that changes in trade openness appear to be largely export driven in the period 2000-2002 and import driven in the period 2008-12. This almost certainly refl ects the beginning of the export of alu-minium in the early part of the decade and the im-port of equipment and machinery associated with investments in the energy and mineral resources sector, particularly coal and natural gas, at the end of the decade.

x Positioning of Mozambique in the International Trade 2016

tuations in fuel and energy prices have shown signifi cant impacts on global export market and GDP growth, casting a shadow on extractive de-pendent economies. Excessive dependence on extractive industry can disproportionately expose developing nations to volatile and unpredictable global markets.

The complex nature of trade at the local, regional and global level requires an organized and coor-dinated policy response to seize the potential op-portunities and to mitigate the risks of volatility as-sociated with global markets. Chapter IV looks at

the role of the Ministry of Industry and Commerce, the key institution in Mozambique responsible for the trade agenda, and the composition of a num-ber of trade and commerce related policy instru-ments and strategies. A number of international trade and investment agreements to which Mo-zambique is a signatory provide the framework for the promotion of bilateral and multi-lateral trade. Finally, an review of the business environment in Mozambique evaluates the country’s trade com-petiveness and weaknesses in relation to regional counterparts.


1.1 The Landscape of Trade in Mozambique

Overview of Trade Trends in Mozambique

C h a p t e r I

Political reforms and sound macro-economic man-agement have been important factors in stimulating economic development in Mozambique over the past 15 years, securing one of the highest growth rates for African non-oil economies with annual real GDP growth over the period 2002-2012 averaging 7.5%.

Economic reforms since 2000 have resulted in the gradual reintegration of the economy into both re-gional and global markets, directly impacting on the country’s trade structure and enabling trade to play an important role in facilitating economic growth.

The trade landscape in Mozambique has changed signifi cantly over the last 15 years, as both imports and exports have grown dramatically as a result of Foreign Direct Investment (FDI) in mega-projects, and this dynamic is likely to continue for the fore-seeable future as the country’s trading potential be-comes a reality, particularly in the extractive sector.

The Trade Openness Index measures the relation-ship between the combined value of imports and exports in relation to the size of GDP. Figure 1.1 il-lustrates the changing importance of trade for the Mozambican economy. There has been a notable change in Mozambique’s score on the index since 2000 in comparison to regional and global averages emphasizing the steady re-integration of Mozam-bican trade into regional and global trade networks.

A closer examination of the value of imports and exports as a percentage of GDP over the same pe-riod shows that changes in trade openness appear to be largely export driven in the period 2000-2002 and import driven in the period 2008-12. This almost certainly refl ects the beginning of the export of alu-minium in the early part of the decade and the im-port of equipment and machinery associated with investments in the energy and mineral resources sector, particularly coal and natural gas, at the end of the decade.

2 Positioning of Mozambique in the International Trade 2016

Figure 1.1: Degree of trade openness 2000-2014

Imports of goods and services (% of GDP)

Exports of goods and services (% of GDP)

0

20

40

60

80

100

120

20002006

20072008

20092010

20112012

20132014

Importsdriven

Exportdriven

(% of GDP)

0

20

40

60

80

100

120

20002002

20042006

20082010

20122014

Mozambique Sub Saharan Africa World

(% of GDP)

Source: World Bank

This trend is further substantiated in Figure 1.2 that illustrates modest growth in the value of exports over the period 2010-14 but substan-tial growth in imports over the same period, with imports achieving double the value of ex-

ports in the last 3 years. This has resulted in a widening current account deficit since 2010, although as Figure 1.2 indicates, this has been offset by the steady growth in FDI over the same period.

Figure 1.2: Current account, trade and FDI fl ow in Mozambique 2010-2014

2010 2011 2012 2013 2014Goods - exports 2,333 3,118 3,856 4,123 3,916Goods - imports (3,512) (5,368) (7,903) (8,480) (7,952)Current account (1,525) (2,997) (6,371) (6,254) (5,797)FDI 1,018 3,559 5,629 6,175 4,349

(10,000)

(8,000)

(6,000)

(4,000)

(2,000)

-

2,000

4,0006,000

8,000

(million USD)

Source: INE

The portfolio of the products exported by Mozam-bique has seen a signifi cant change over the last 15 years as illustrated in Figure 1.3. Mozambique is traditionally known for the export of crustaceans (mainly prawns, crabs and lobster) and cash crops such as cashew nuts, cotton, tobacco and sugar, and indeed these products accounted for 80% of

total exports in 2000. However, although the export of these products has continued, the impact of FDI on the composition of Mozambique’s top export products became noticeable by 2015 with the ex-port of aluminium, coal, natural gas, heavy mineral sands, and precious stones accounting for the top 70% of export products.


Figure 1.3: Principal trade products exported from Mozambique 2000 and 2015

2000 (364 million USD)

Crustaceances Other

Electricity Aluminium

Cotton

Cashew nuts

Tabacco Sugar

2015 (3,196 million USD)

Aluminium Other

Coal

Electricity

Natural Gas

Haevy Mineral Sands

Tabacco SugarPreciousStones

Source: UN Comtrade

Box 1.1: Volatile commodity prices destabilize the economy

World commodity prices are known to be volatile, driven by changes in global demand and supply, and emerging economies, that are highly dependent on revenue derived from agricultural and mineral and energy resources, and that also rely on the import of basic foods, are particularly vulnerable to these price fl uctuations. The graphics below show a high price volatility both in Mozambique’s principle export commodities, particularly coal, cotton and sugar, and in the prices of staple and imported foods like wheat, maize and rice. Commodity price volatility can have various negative impacts on economic growth, instability in the balance of trade and Government revenue, and unpredictable infl ation in domestic markets for end-users and consumers.

Figure 1.4: Commodity price trend (Index, 2005=100)Commodities exported from Mozambique Commodities imported to Mozambique

0

50

100

150

200

250

300

350

(USD, Index 2005=100)

20012003

20052007

20092011

20132015

Coal Aluminium Cotton Sugar

0

50

100

150

200

250

300

350(USD, Index 2005=100)

20012003

20052007

20092011

20132015

Crude Oil Wheat Maize Rice

Source: IMF, World Economic Outlook


Figure 1.3: Principal trade products exported from Mozambique 2000 and 2015

2000 (364 million USD)

Crustaceances Other

Electricity Aluminium

Cotton

Cashew nuts

Tabacco Sugar

2015 (3,196 million USD)

Aluminium Other

Coal

Electricity

Natural Gas

Haevy Mineral Sands

Tabacco SugarPreciousStones

Source: UN Comtrade

Box 1.1: Volatile commodity prices destabilize the economy

World commodity prices are known to be volatile, driven by changes in global demand and supply, and emerging economies, that are highly dependent on revenue derived from agricultural and mineral and energy resources, and that also rely on the import of basic foods, are particularly vulnerable to these price fl uctuations. The graphics below show a high price volatility both in Mozambique’s principle export commodities, particularly coal, cotton and sugar, and in the prices of staple and imported foods like wheat, maize and rice. Commodity price volatility can have various negative impacts on economic growth, instability in the balance of trade and Government revenue, and unpredictable infl ation in domestic markets for end-users and consumers.

Figure 1.4: Commodity price trend (Index, 2005=100)Commodities exported from Mozambique Commodities imported to Mozambique

0

50

100

150

200

250

300

350

(USD, Index 2005=100)

20012003

20052007

20092011

20132015

Coal Aluminium Cotton Sugar

0

50

100

150

200

250

300

350(USD, Index 2005=100)

20012003

20052007

20092011

20132015

Crude Oil Wheat Maize Rice



2.1 Trade Products Portfolio

Trend Analysis of Trade Products in Mozambique

C h a p t e r II

Table 2.1 summarizes Mozambique’s principle ex-port and import products across three broad cat-egories: mega-projects, extractive industries (min-erals) and industrial products, cash crops and food products. Principal exports comprise aluminum,

minerals, and cash crops whereas imports include petrol, industrial and manufactured products, par-ticularly vehicles, machinery and construction ma-terials, and basic foodstuffs, including cereals, fro-zen fi sh and meat.

Table 2.1: Main export and import products in Mozambique

Megaproject, Extractive industry, Industrial products

Cash Crops Foods

Exports

� Aluminium � Coal � Natural gas � Electricity � Heavy mineral sands � Precious stones � Woods

� Cashew nuts � Sesame � Almonds � Sugar � Cotton � Banana � Tobacco

� Crustaceans

Imports

� Petroleum � Unwrought aluminum � Electricity � Machinery � Construction materials � Vehicle � Pharmaceutical products � Furniture

� Sugar

� Wheat � Maize � Rice � Fish frozen � Live animals and meats


Table 1.1 shows Mozambique’s top ten trading partners according to the value of exports and im-ports. Proximity to South Africa, the second-larg-est economy in Africa, accounting for 24% of the continent’s gross domestic product in 2015, make it Mozambique’s biggest trading partner. Mozam-bique’s principle exports to South Africa are gas from Inhambane, and electricity from the Cahorra Bassa hydro dam in Tete. However, the importance of South Africa as a trading partner lies principally in its role as a source of imports particularly in re-lation to machinery, vehicles, and foods, and as a result Mozambique runs a signifi cant trade defi cit with its neighbour that has averaged close to $2bn per annum over the last fi ve years. In fact, Mozam-

1.2 Trade Partners in Mozambique

bique runs a trade defi cit with most of its top ten trade partners with the exception of the Netherlands and India. The Netherlands is a special case due to the trading of aluminum and India is Mozambique’s largest coal export destination.

China and India, ranked in 3rd and 4th position, are gaining increasing importance as trade partners and are the principle destinations for primary commodities such as coal and heavy mineral sands. The impor-tance of Bahrain and the UEA is related to the import of petroleum. Traditional trading partners amongst de-veloped countries, notably Portugal, the UK, the USA and Japan, are international suppliers of machinery, vehicles, and electrical and electronic products.

Table 1.1: Mozambique’s major trading partners (2011-2015 avg.)

(million USD)Trade value

(exports + imports)Trade balance

South Africa 3,264 -1,789Netherlands 1,678 537China 851 -371India 625 34United Arab Emirates 550 -465Bahrain 465 -447Portugal 434 -336United Kingdom 354 -68USA 289 -152Japan 238 -198

Source: UN Comtrade

Figure 1.5: Mozambique’s principle export destination and import origins (2011-2015 avg.)

Exports destinations Imports origins

South Africa19%

China6%

Netherlands29%

India9%

USA2%

Italy2%

Switzerland2%

Zimbabwe2%

Singapore4%

United Kingdom

4%

Other21%

South Africa32%

China8%

Netherlands7%

United Arab Emirates

6%Bahrain6%

Portugal5%

India4%

USA3%

Japan3%

United Kingdom

3%

Other23%

Source: UN Comtrade


2.1 Trade Products Portfolio

Trend Analysis of Trade Products in Mozambique

C h a p t e r II

Table 2.1 summarizes Mozambique’s principle ex-port and import products across three broad cat-egories: mega-projects, extractive industries (min-erals) and industrial products, cash crops and food products. Principal exports comprise aluminum,

minerals, and cash crops whereas imports include petrol, industrial and manufactured products, par-ticularly vehicles, machinery and construction ma-terials, and basic foodstuffs, including cereals, fro-zen fi sh and meat.

Table 2.1: Main export and import products in Mozambique

Megaproject, Extractive industry, Industrial products

Cash Crops Foods

Exports

� Aluminium � Coal � Natural gas � Electricity � Heavy mineral sands � Precious stones � Woods

� Cashew nuts � Sesame � Almonds � Sugar � Cotton � Banana � Tobacco

� Crustaceans

Imports

� Petroleum � Unwrought aluminum � Electricity � Machinery � Construction materials � Vehicle � Pharmaceutical products � Furniture

� Sugar

� Wheat � Maize � Rice � Fish frozen � Live animals and meats


Regarding cash crops, the markets for sugar and cotton are relatively diverse. Sugar is exported al-most entirely to Europe, although split relatively equally between Portugal, Spain and Italy and with smaller volumes going to France and the Nether-lands. Cotton exports go almost entirely to Asia with the biggest volumes going to Indonesia but with

Bangladesh, China, Singapore and Vietnam as im-portant destinations. Over 60 % of the exports of sesame go to China, with the balance exported to various countries mainly in Asia. Finally, India is the principal market for Mozambican cashew nuts ac-counting for over 40% of export volume, but the USA and Canada are also important export destinations.

Figure 2.3: Exports destinations by product (2011-2015 avg.)Destinations of export products - megaproject/extractive resources (2011-2015 avg.)

Aluminium Coal Natural gas Heavy mineral sands

Netherlands83%

Singapore3%

United Kingdom

9%

Other5%

China16%

Italy17%

India22%

USA15%Spain

6%

Other20%

Japan4%

India52%

Other7%

China25%

Singapore16%

Other5%

South Africa95%

Destinations of export products - cash crops (2011-2015 avg.)

Sugar Cotton Sesame Cashew nuts

Netherlands6%

Portugal25%

France6%

Spain24%

Italy22%

Other17%

China14%

Indonesia24%

Bangladesh16%

Other16%

Viet Nam7%

Singapore9%

Mauritius10%

Malaysia4%

South Africa3%

Turkey6%

China61%

Singapore2%

India2%

Japan16%

UAE2%

Other8%

South Africa5%

Canada14%

India43%

USA17%

Lebanon2%

UAE3%

Other16%

Source: UN Comtrade

2.2 Main Cash Crops and Foods Exports

Turning from general trends to look in more detail at specifi c export products, this section will analyse seven key export products for Mozambique: cash-ew, sesame, almonds, cotton, banana, sugar and crustaceans.

Cashew Nuts

Since production began in the early 20th century, cashew nuts have been an important cash crop for Mozambique. In the post war period numerous factories were built for processing cashew nuts for

export. Production peaked in the 70’s when Mozam-bique was the world’s leading exporter of shelled cashew. However, in recent years the volume and quality of cashew nuts produced and exported has declined.

The volume of cashew nuts exported over the pe-riod 2005-2015 has been fl uctuating as export value has sharply declined in 2015 (Fig. 2.4). This shows a marked contrast to global trends where export vol-umes have more than doubled over the same period and export value has increased by almost tenfold.


Figure 2.1 indicates that in terms of export volume, industrial products and minerals have accounted for the greater percentage of total exports over the period 2005 to 2015, albeit witnessing a small drop to below 60% between 2012 and 2014. Aluminium export has accounted for over 30% of total exports in this category since early 2000. Export of minerals

has grown particularly in the last 5 years although much greater growth is anticipated in the future.

By contrast, cash crops as a percentage of total exports halved between 2000 and 2005 and have fl uctuated between 10 to 20% over the last 10 years (Fig.2.2). Tobacco, sugar and cotton are the biggest export crops by value.

Figure 2.1: Megaproject/extractive industry export value 2000-2015 (selected prducts)

100%3,000(million USD)

2,500

2,000

1,500

1,000

500

-

Precious stones

Heavy mineral sands

Natural gas

Coal

Electricity

Aluminium

% of total exports – right axis

90%

80%70%60%50%40%

30%20%

10%

0%2000 2005 2012 2012 2014 2015

Source: UN Comtrade

Figure 2.2: Cash crops and foods exports value 2000-2015 (selected products)

100%90%

80%70%60%50%40%

30%20%

10%

0%

700

600

500

400

300

200

100

-

Cashew nuts

Almonds

Sesame

Crustaceances

Cotton

Banana

Sugar

Tabocco

% of total exports – right axis2000 2005 2012 2012 2014 2015

(million USD)

Source: UN Comtrade

Figure 2.3 summarises the principle export destina-tions in relation to industrial projects and mineral re-sources and cash crops over the period 2011 to 2015

Over 90% of Mozambican coal is exported to Asia, with over 50% going to India and a further 25% to China. Almost all of the natural gas currently pro-duced in Mozambique is exported to South Africa. However, this is likely to change signifi cantly once

gas exploration and processing starts in northern Mozambique. The market for heavy mineral sands shows greater diversity with exports going to Asia, Europe and the USA, although India and China rep-resent the biggest markets. Aluminium export is a special case with of 80% of the aluminium produced going to the Netherlands as the Port of Rotterdam is a logistic hub for trade in Europe.


Regarding cash crops, the markets for sugar and cotton are relatively diverse. Sugar is exported al-most entirely to Europe, although split relatively equally between Portugal, Spain and Italy and with smaller volumes going to France and the Nether-lands. Cotton exports go almost entirely to Asia with the biggest volumes going to Indonesia but with

Bangladesh, China, Singapore and Vietnam as im-portant destinations. Over 60 % of the exports of sesame go to China, with the balance exported to various countries mainly in Asia. Finally, India is the principal market for Mozambican cashew nuts ac-counting for over 40% of export volume, but the USA and Canada are also important export destinations.

Figure 2.3: Exports destinations by product (2011-2015 avg.)Destinations of export products - megaproject/extractive resources (2011-2015 avg.)

Aluminium Coal Natural gas Heavy mineral sands

Netherlands83%

Singapore3%

United Kingdom

9%

Other5%

China16%

Italy17%

India22%

USA15%Spain

6%

Other20%

Japan4%

India52%

Other7%

China25%

Singapore16%

Other5%

South Africa95%

Destinations of export products - cash crops (2011-2015 avg.)

Sugar Cotton Sesame Cashew nuts

Netherlands6%

Portugal25%

France6%

Spain24%

Italy22%

Other17%

China14%

Indonesia24%

Bangladesh16%

Other16%

Viet Nam7%

Singapore9%

Mauritius10%

Malaysia4%

South Africa3%

Turkey6%

China61%

Singapore2%

India2%

Japan16%

UAE2%

Other8%

South Africa5%

Canada14%

India43%

USA17%

Lebanon2%

UAE3%

Other16%

Source: UN Comtrade

2.2 Main Cash Crops and Foods Exports

Turning from general trends to look in more detail at specifi c export products, this section will analyse seven key export products for Mozambique: cash-ew, sesame, almonds, cotton, banana, sugar and crustaceans.

Cashew Nuts

Since production began in the early 20th century, cashew nuts have been an important cash crop for Mozambique. In the post war period numerous factories were built for processing cashew nuts for

export. Production peaked in the 70’s when Mozam-bique was the world’s leading exporter of shelled cashew. However, in recent years the volume and quality of cashew nuts produced and exported has declined.

The volume of cashew nuts exported over the pe-riod 2005-2015 has been fl uctuating as export value has sharply declined in 2015 (Fig. 2.4). This shows a marked contrast to global trends where export vol-umes have more than doubled over the same period and export value has increased by almost tenfold.


Figure 2.5: Mozambique cashew nuts export destinations

2006-2010 Average 2011-2015 Average

South Africa7%

India50%

USA7%

Lebanon2%

UAE1%

Other13%

Netherlands20%

South Africa5%

Canada14%

India43%

USA17%

Lebanon2%

UAE3%

Other16%

Source: UN Comtrade

Table 2.2: Cashew nuts export world ranking

2006 ranking Exports value (USD) 2014 ranking Exports value (USD)

1 India 544,229,716 1 Viet Nam 1,931,387,530

2 Viet Nam 455,763,308 2 India 883,240,879

3 Brazil 187,538,588 3 Cote d’Ivoire 818,171,096

4 Netherlands 107,124,478 4 Tanzania 391,880,956

5 Cote d’Ivoire 92,376,962 5 Netherlands 199,009,852

6 Indonesia 56,584,795 6 Brazil 110,302,452

7 Tanzania 49,900,621 7 Indonesia 103,642,649

8 Mozambique 36,688,195 8 Nigeria 91,662,971

9 Benin 16,553,863 9 UAE 90,739,498

10 Belgium 16,342,431 10 Germany 68,597,104

11 USA 12,775,166 11 Benin 65,149,698

12 Germany 9,148,000 12 Burkina Faso 42,951,571

13 Ghana 9,012,535 13 Belgium 29,418,299

14 Italy 7,495,788 14 Guinea 23,445,523

15 United Kingdom 6,173,580 15 Singapore 19,222,269

16 Singapore 3,770,318 16 Mozambique 19,092,930

17 Kenya 3,258,871 17 USA 16,441,894

18 Hong Kong 1,742,720 18 United Kingdom 15,997,026

19 Greece 1,682,427 19 Italy 11,712,756

20 Sri Lanka 1,148,251 20 Austria 6,644,115

World Total 1,632,531,586 World Total 4,994,341,256

Mozambique % 2.25% Mozambique % 0.38%

Source: UN Comtrade

Sesame

Mozambican farmers have been encouraged to produce sesame as the price paid for the product

is considered more favourable to that of other more traditional cash crops such as cotton and tobacco.


Figure 2.4 Mozambique cashew nuts exports and global trends

Mozambique Global trend

-

5

10

15

20

25

0

3

6

9

12

15

(thousand tonne) (million USD)

2005 2012 2013 2014 2015

Ex volume -left axis Export right axis Ex volume -left axis Export right axis

-

1,000

2,000

3,000

4,000

5,000

6,000

-

500

1,000

1,500

2,000(thousand tonne) (million USD)

20052006

20072008

20092010

20112012

20132014

Mozambique: cashew nuts exports in shell and shelled

0

4

8

12

16

20

0

2

4

6

8

10

2005 2012 2013 2014 2015

Volume - casehew huts in shell Volume - casehew huts shelled

Value - casehew huts in shell Value - casehew huts shelled

(thousand tonne) (million USD)

Source: UN Comtrade

This may be partly explained by the percentage of the total crop that is processed, with shelled nuts having a greater market value than unshelled or raw cashew, as illustrated in Figure 2.5. The higher mar-ket value of shelled nuts means there is upside po-tential for the economy of Mozambique to add value before exporting, yet it requires greater competitive-ness to access the export markets.

India is the principal export destination for Mozam-bican cashew but in the last fi ve years the USA and Canada have become important markets tak-ing a 17 and 14 percent market share respectively (Fig.2.5)

Mozambique’s global market share in cashew nut has dropped signifi cantly from 2.25% in 2006 to 0.38% in 2014, and the country has slipped in world rankings from 8th to 16th place over the same period (Table 2.2). There is a remarkable growth in cashew export by African countries, notably in West Africa, where the export value in Cote d’Ivoire has doubled, and where Benin and Burkina Faso have appeared as important exporters. As to Mozambique’s neigh-bour Tanzania, the value of exports of cashew nuts has increased by a factor of eight over the period 2006 to 2014. By contrast the value of Mozambican exports have almost halved over the same period.


Figure 2.5: Mozambique cashew nuts export destinations


South Africa7%

India50%

USA7%

Lebanon2%

UAE1%

Other13%

Netherlands20%

South Africa5%

Canada14%

India43%

USA17%

Lebanon2%

UAE3%

Other16%

Source: UN Comtrade

Table 2.2: Cashew nuts export world ranking

2006 ranking Exports value (USD) 2014 ranking Exports value (USD)

1 India 544,229,716 1 Viet Nam 1,931,387,530

2 Viet Nam 455,763,308 2 India 883,240,879

3 Brazil 187,538,588 3 Cote d’Ivoire 818,171,096

4 Netherlands 107,124,478 4 Tanzania 391,880,956

5 Cote d’Ivoire 92,376,962 5 Netherlands 199,009,852

6 Indonesia 56,584,795 6 Brazil 110,302,452

7 Tanzania 49,900,621 7 Indonesia 103,642,649

8 Mozambique 36,688,195 8 Nigeria 91,662,971

9 Benin 16,553,863 9 UAE 90,739,498

10 Belgium 16,342,431 10 Germany 68,597,104

11 USA 12,775,166 11 Benin 65,149,698

12 Germany 9,148,000 12 Burkina Faso 42,951,571

13 Ghana 9,012,535 13 Belgium 29,418,299

14 Italy 7,495,788 14 Guinea 23,445,523

15 United Kingdom 6,173,580 15 Singapore 19,222,269

16 Singapore 3,770,318 16 Mozambique 19,092,930

17 Kenya 3,258,871 17 USA 16,441,894


19 Greece 1,682,427 19 Italy 11,712,756

20 Sri Lanka 1,148,251 20 Austria 6,644,115


Mozambique % 2.25% Mozambique % 0.38%

Source: UN Comtrade

Sesame

Mozambican farmers have been encouraged to produce sesame as the price paid for the product

is considered more favourable to that of other more traditional cash crops such as cotton and tobacco.


Table 2.3: Sesame exports word ranking

2006 ranking Exports (USD) 2014 ranking Exports (USD)

1 India 171,301,580 1 India 813,601,513

2 Ethiopia 160,618,956 2 Ethiopia 714,545,764

3 Fmr Sudan 143,712,121 3 Nigeria 553,561,191

4 China 55,915,893 4 Tanzania 324,414,519

5 Paraguay 28,363,175 5 Burkina Faso 131,838,092

6 Tanzania 21,135,390 6 China 97,584,787

7 Netherlands 19,080,060 7 Paraguay 78,608,002

8 Guatemala 16,206,568 8 Pakistan 65,401,723

9 Mexico 15,696,397 9 Uganda 55,165,179

10 Bolivia 13,736,288 10 Guatemala 52,858,249

11 Mozambique 13,499,546 11 Netherlands 47,432,050

12 Pakistan 10,884,218 12 Mozambique 40,453,920

13 Venezuela 9,700,650 13 Mexico 26,141,253

14 Thailand 7,736,563 14 Egypt 17,106,452

15 Turkey 7,261,183 15 Germany 16,640,180

16 Uganda 4,547,430 16 Greece 14,489,832

17 Germany 4,351,000 17 USA 14,140,743

18 Nicaragua 4,319,270 18 Bolivia 13,018,099

19 Greece 3,090,870 19 Nicaragua 12,986,969

20 Egypt 2,925,392 20 Afghanistan 11,861,646

World Total 742,134,620 World Total 3,203,518,646

Mozambique % 1.82% Mozambique % 1.26%Source: UN Comtrade

Almonds

Almond is a relatively new export crop for Mozam-bique with very little production prior to 2005. Export volumes and values have shown signifi cant varia-tion (Fig 2.8) in marked contrast to global trends which have shown substantial growth over the pe-riod 2005-15.

The Netherlands has continued as the major des-tination for Mozambican almonds over the last 10 years but exports to the USA and South Africa have seen signifi cant growth in the period 2011 to 2015 and Australia has appeared as a notable export

destination (Fig. 2.9). Exports to Singapore have seen a signifi cant fall over the period 2006-14 and China has dropped out of the top 8 export destina-tions.

Despite variable export volumes, Mozam-bique’s global ranking in terms of export value for almond has improved substantially, climb-ing from 43rd place in 2006 to 14th place in 2014, and with global market share growing from almost zero to 0.29% over the same pe-riod (Table2.4).


The fi rst sesame processing plant in Mozambique was installed in the port city of Nacala in 2010. Export volumes have shown considerable varia-tion over the period 2005-2015 (Fig 2.6) especially when compared to global trends which show steady growth in both export volumes and market value over the same period (Fig. 2.6).

Asia, particularly China and Japan, are the princi-pal export destinations for Mozambican sesame ac-counting for 71% of exports in the period 2006-10 and rising to 77% in the period 2011-15. Export of sesame to neighbouring South Africa has maintained a con-sistent 8% share but exports to Turkey which took 15% of volume in the period 2006-10 have fallen off signifi cantly in the last fi ve years to just 2% (Fig. 2.7).

Mozambique has largely maintained its global rank-ing in relation to the value of sesame exports slip-ping one place from 11th in 2006 to 12th in 2014. Export value tripled over the period, but global mar-ket share dropped by almost a third from 1.82% to 1.26% over the 10-year period (Table 2.3). India and Ethiopia are the dominant market players for sesa-me with their export value increasing fi vefold over the last 10 years. Mozambique appears to have per-formed less well than other African sesame export-ers. The export value of Tanzanian sesame has in-creased by over 15 times since 2006 placing it in 4th position in global ranking in 2014. Nigeria, Burkina Faso and Uganda have all overtaken Mozambique in the global rankings, with the value of Ugandan sesame increasing tenfold over the period.

Figure 2.6: Mozambique sesame exports and global trends


Export volume - left axis Exports value - right axis

0

10

20

30

40

50(thousand tonnes) (million USD)

0

10

20

30

40

50

20052006

20072008

20092010

20112012

20132014

2015


- -

500

1,000

1,500

2,000(thousand tonnes) (million USD)

1,000

2,000

3,000

4,000

20052006

20072008

20092010

20112012

20132014

Source: UN Comtrade

Figure 2.7: Mozambique sesame export destinations


South Africa2%

Turkey15%

China63%

India1%

Japan9%

UAE2%

Other8%

South Africa3%

Turkey6%

China61%

Singapore2%

India2%

Japan16%

UAE2% Other

8%

Source: UN Comtrade


Table 2.3: Sesame exports word ranking


1 India 171,301,580 1 India 813,601,513

2 Ethiopia 160,618,956 2 Ethiopia 714,545,764

3 Fmr Sudan 143,712,121 3 Nigeria 553,561,191

4 China 55,915,893 4 Tanzania 324,414,519

5 Paraguay 28,363,175 5 Burkina Faso 131,838,092

6 Tanzania 21,135,390 6 China 97,584,787

7 Netherlands 19,080,060 7 Paraguay 78,608,002

8 Guatemala 16,206,568 8 Pakistan 65,401,723

9 Mexico 15,696,397 9 Uganda 55,165,179

10 Bolivia 13,736,288 10 Guatemala 52,858,249

11 Mozambique 13,499,546 11 Netherlands 47,432,050

12 Pakistan 10,884,218 12 Mozambique 40,453,920

13 Venezuela 9,700,650 13 Mexico 26,141,253

14 Thailand 7,736,563 14 Egypt 17,106,452

15 Turkey 7,261,183 15 Germany 16,640,180

16 Uganda 4,547,430 16 Greece 14,489,832

17 Germany 4,351,000 17 USA 14,140,743

18 Nicaragua 4,319,270 18 Bolivia 13,018,099

19 Greece 3,090,870 19 Nicaragua 12,986,969

20 Egypt 2,925,392 20 Afghanistan 11,861,646

World Total 742,134,620 World Total 3,203,518,646


Almonds

Almond is a relatively new export crop for Mozam-bique with very little production prior to 2005. Export volumes and values have shown signifi cant varia-tion (Fig 2.8) in marked contrast to global trends which have shown substantial growth over the pe-riod 2005-15.

The Netherlands has continued as the major des-tination for Mozambican almonds over the last 10 years but exports to the USA and South Africa have seen signifi cant growth in the period 2011 to 2015 and Australia has appeared as a notable export

destination (Fig. 2.9). Exports to Singapore have seen a signifi cant fall over the period 2006-14 and China has dropped out of the top 8 export destina-tions.

Despite variable export volumes, Mozam-bique’s global ranking in terms of export value for almond has improved substantially, climb-ing from 43rd place in 2006 to 14th place in 2014, and with global market share growing from almost zero to 0.29% over the same pe-riod (Table2.4).


Table 2.4: Almonds export world ranking

2006 Ranking Exports (USD) 2014 Ranking Exports (USD)

1 USA 1,781,207,394 1 USA 4,437,673,773

2 Spain 364,748,850 2 Spain 629,664,636

3 Italy 64,777,202 3 Australia 391,949,143

4 Chile 49,204,000 4 UAE 264,534,132

5 Greece 46,190,654 5 Hong Kong 152,413,174

6 Netherlands 42,505,831 6 Germany 135,562,116

7 Germany 40,899,692 7 Netherlands 109,080,317

8 France 39,876,596 8 Italy 106,480,302

9 UAE 26,440,633 9 Belgium 71,413,371

10 Australia 25,769,830 10 Turkey 70,759,557

11 Belgium 22,474,353 11 Chile 43,719,074


13 Morocco 12,167,285 13 Benin 22,492,107

14 United Kingdom 7,459,634 14 Mozambique 18,849,840

15 Tunisia 6,796,223 15 France 15,137,819

16 Turkey 5,479,747 16 Greece 11,564,900

17 Syria 3,661,593 17 Czech Rep. 9,670,837

18 Portugal 3,416,027 18 Austria 8,069,514

19 Denmark 3,203,058 19 Sweden 7,167,306

43 Mozambique 155,907 20 Poland 6,992,729



Cotton

Historically cotton has been an important agricultural export crop for Mozambique. Produced on large plan-tations during the colonial period, cotton today is one of the major sources of income for rural households in central and northern Mozambique. Nevertheless, as noted in Chapter 1, the global price of cotton is notably volatile and as a result, the export volume and value of Mozambican cotton has shown considerable variation over the last 10 years with growth in the pe-riod 2010-2013 corresponding with global price fl uc-tuation (Fig. 2.10). Global export volume and value have also varied showing signifi cant growth from 2009, peaking in 2012, before tailing off to 2014.

Asia is the principal market for Mozambican cotton with Indonesia being the principal destination in the period 2011-15 but with Singapore, Vietnam and

Malaysia appearing as important trading partners (Fig. 2.11).

Mozambique’s importance as a cotton exporter has marginally improved over the period 2006-2014 climbing from 23rd to 18th place in the global rank-ing by export value and with global market share increasing from 0.48% to 0.54% over the same pe-riod (Table 2.5). The USA, India and Australia are the market leaders with the latter two more than doubling the value of cotton exports over the last 10 years. In Africa, Mozambique is outperformed by West African countries with the export value of cotton in Benin and Cote d’Ivoire growing by signifi -cantly more than for Mozambique, and Nigeria and Burkina Faso overtaking Mozambique in the world rankings.


Figure 2.8: Mozambique almonds exports and global trends



0

2

4

6

8

10

0

5

10

15

20

20052006

20072008

20092010

20112012

20132014

2015

(thousand tonnes) (million USD)


20052006

20072008

20092010

20112012

20132014

-

1,000

2,000

3,000

4,000

5,000

6,000

7,000

-

200

400

600

800

1,000

1,200

1,400


Source: UN Comtrade

Figure 2.9: Mozambique almonds export destinations


South Africa18%

China4%

India4%

Other17%

Netherlands29%

Singapore19%

USA9%

Canada3%

South Africa20%

India4%

Other12%

Netherlands26%

Australia9%

Singapore3%

USA22%

Source: UN Comtrade


Table 2.4: Almonds export world ranking

2006 Ranking Exports (USD) 2014 Ranking Exports (USD)

1 USA 1,781,207,394 1 USA 4,437,673,773

2 Spain 364,748,850 2 Spain 629,664,636

3 Italy 64,777,202 3 Australia 391,949,143

4 Chile 49,204,000 4 UAE 264,534,132

5 Greece 46,190,654 5 Hong Kong 152,413,174

6 Netherlands 42,505,831 6 Germany 135,562,116

7 Germany 40,899,692 7 Netherlands 109,080,317

8 France 39,876,596 8 Italy 106,480,302

9 UAE 26,440,633 9 Belgium 71,413,371

10 Australia 25,769,830 10 Turkey 70,759,557

11 Belgium 22,474,353 11 Chile 43,719,074


13 Morocco 12,167,285 13 Benin 22,492,107

14 United Kingdom 7,459,634 14 Mozambique 18,849,840

15 Tunisia 6,796,223 15 France 15,137,819

16 Turkey 5,479,747 16 Greece 11,564,900

17 Syria 3,661,593 17 Czech Rep. 9,670,837

18 Portugal 3,416,027 18 Austria 8,069,514

19 Denmark 3,203,058 19 Sweden 7,167,306

43 Mozambique 155,907 20 Poland 6,992,729



Cotton

Historically cotton has been an important agricultural export crop for Mozambique. Produced on large plan-tations during the colonial period, cotton today is one of the major sources of income for rural households in central and northern Mozambique. Nevertheless, as noted in Chapter 1, the global price of cotton is notably volatile and as a result, the export volume and value of Mozambican cotton has shown considerable variation over the last 10 years with growth in the pe-riod 2010-2013 corresponding with global price fl uc-tuation (Fig. 2.10). Global export volume and value have also varied showing signifi cant growth from 2009, peaking in 2012, before tailing off to 2014.

Asia is the principal market for Mozambican cotton with Indonesia being the principal destination in the period 2011-15 but with Singapore, Vietnam and

Malaysia appearing as important trading partners (Fig. 2.11).

Mozambique’s importance as a cotton exporter has marginally improved over the period 2006-2014 climbing from 23rd to 18th place in the global rank-ing by export value and with global market share increasing from 0.48% to 0.54% over the same pe-riod (Table 2.5). The USA, India and Australia are the market leaders with the latter two more than doubling the value of cotton exports over the last 10 years. In Africa, Mozambique is outperformed by West African countries with the export value of cotton in Benin and Cote d’Ivoire growing by signifi -cantly more than for Mozambique, and Nigeria and Burkina Faso overtaking Mozambique in the world rankings.


Table 2.5: Cotton exports world ranking


1 USA 4,641,121,974 1 USA 4,501,584,351

2 India 992,939,039 2 India 2,880,677,123

3 Australia 764,544,644 3 Australia 1,812,264,006

4 Greece 414,035,736 4 Brazil 1,359,826,889

5 Brazil 342,721,628 5 Burkina Faso 496,611,800

6 Mali 254,078,848 6 Greece 417,961,866

7 Syria 194,266,487 7 Cote d’Ivoire 323,251,535

8 Kazakhstan 180,750,202 8 Benin 288,167,103

9 Turkey 138,555,686 9 Pakistan 251,777,123

10 Egypt 132,516,874 10 Nigeria 181,961,335

11 Pakistan 116,820,039 11 Turkey 170,720,195

12 Cote d’Ivoire 113,524,524 12 Cameroon 160,565,582

13 Cameroon 103,741,608 13 Spain 153,810,726

14 Spain 97,902,716 14 Argentina 120,577,571

15 Benin 90,837,230 15 UAE 89,942,916

16 Zimbabwe 83,120,690 16 Egypt 89,613,305

17 Fmr Sudan 71,116,956 17 Kazakhstan 80,264,846

18 Tanzania 69,077,820 18 Mozambique 77,354,954

19 Mexico 62,996,162 19 Germany 75,878,216

23 Mozambique 45,691,101 20 Zambia 67,173,377



Banana

Bananas are one of the most common fruit crops grown in Mozambique, but like Sesame, the com-mercialisation of Banana is a fairly recent develop-ment and banana is a relatively new export crop for the country. Approximately 60% of banana produc-tion is undertaken on medium to large commercial plantations mainly in Maputo, Manica and Nampula Provinces. Export volume and value of Banana has grown signifi cantly over the last 10 years from al-most zero in 2004 outperforming the global trend (Figs. 2.12).

The market for Mozambican banana over the last 10 years has been dominated by neighbouring South

Africa as the principle export destination, although in the last 5 years the market has become more di-versifi ed with the notable entry of the Gulf States (Fig. 2.13).

Growth in the value of Mozambique’s banana exports has been impressive in the last ten years with the country climbing in world ranking from 53rd place in 2006 to 20th place in 2014 and market share growing from nearly zero to 0.41% over the same period (Ta-ble 2.6). It appears that Mozambique has few com-petitors in the Southern Africa region and looking to Africa as a whole, Mozambique is outperformed in West Africa only by Cameroon and Cote d’Ivoire.


Figure 2.10: Mozambique cotton exports and global trends



20

10

0

30

40

50

60

70

40

20

-

60

80

100

120

20052006

20072008

20092010

20112012

20132014

2015


Export volume - left axis Export value - right axis

-

5,000

10,000

15,000

20,000

25,000

-

2,000

4,000

6,000

8,000

12,000

10,000

20052006

20072008

20092010

20112012

20132014


Source: UN Comtrade

Figure 2.11: Mozambique cotton export destinations


Indonesia14%

Bangladesh3%

Pakistan3%

China10%

Portugal10%

Thailand7%

Other44%

South Africa9%

China14%

Indonesia24%

Bangladesh16%

Other16%

Viet Nam7%

Singapore9%

Mauritius10%

Malaysia4%

Source: UN Comtrade


Table 2.5: Cotton exports world ranking


1 USA 4,641,121,974 1 USA 4,501,584,351

2 India 992,939,039 2 India 2,880,677,123

3 Australia 764,544,644 3 Australia 1,812,264,006

4 Greece 414,035,736 4 Brazil 1,359,826,889

5 Brazil 342,721,628 5 Burkina Faso 496,611,800

6 Mali 254,078,848 6 Greece 417,961,866

7 Syria 194,266,487 7 Cote d’Ivoire 323,251,535

8 Kazakhstan 180,750,202 8 Benin 288,167,103

9 Turkey 138,555,686 9 Pakistan 251,777,123

10 Egypt 132,516,874 10 Nigeria 181,961,335

11 Pakistan 116,820,039 11 Turkey 170,720,195

12 Cote d’Ivoire 113,524,524 12 Cameroon 160,565,582

13 Cameroon 103,741,608 13 Spain 153,810,726

14 Spain 97,902,716 14 Argentina 120,577,571

15 Benin 90,837,230 15 UAE 89,942,916

16 Zimbabwe 83,120,690 16 Egypt 89,613,305

17 Fmr Sudan 71,116,956 17 Kazakhstan 80,264,846

18 Tanzania 69,077,820 18 Mozambique 77,354,954

19 Mexico 62,996,162 19 Germany 75,878,216

23 Mozambique 45,691,101 20 Zambia 67,173,377



Banana

Bananas are one of the most common fruit crops grown in Mozambique, but like Sesame, the com-mercialisation of Banana is a fairly recent develop-ment and banana is a relatively new export crop for the country. Approximately 60% of banana produc-tion is undertaken on medium to large commercial plantations mainly in Maputo, Manica and Nampula Provinces. Export volume and value of Banana has grown signifi cantly over the last 10 years from al-most zero in 2004 outperforming the global trend (Figs. 2.12).

The market for Mozambican banana over the last 10 years has been dominated by neighbouring South

Africa as the principle export destination, although in the last 5 years the market has become more di-versifi ed with the notable entry of the Gulf States (Fig. 2.13).

Growth in the value of Mozambique’s banana exports has been impressive in the last ten years with the country climbing in world ranking from 53rd place in 2006 to 20th place in 2014 and market share growing from nearly zero to 0.41% over the same period (Ta-ble 2.6). It appears that Mozambique has few com-petitors in the Southern Africa region and looking to Africa as a whole, Mozambique is outperformed in West Africa only by Cameroon and Cote d’Ivoire.


Table 2.6: Banana exports world ranking


1 Ecuador 1,213,576,373 1 Ecuador 2,620,664,069

2 Belgium 1,151,309,846 2 Belgium 1,335,550,929

3 Costa Rica 645,152,006 3 Philippines 1,137,315,622

4 Colombia 525,457,557 4 Colombia 835,546,254

5 Germany 406,015,000 5 Guatemala 721,443,494

6 Philippines 405,444,333 6 USA 470,246,918

7 USA 240,069,557 7 Germany 391,873,334

8 Guatemala 233,031,692 8 Dominican Rep. 331,572,516

9 Honduras 131,525,973 9 Netherlands 249,783,121

10 Ghana 118,945,693 10 France 246,041,287

11 Cote d’Ivoire 115,625,889 11 Honduras 221,616,975

12 France 114,726,827 12 Mexico 179,693,289

13 Netherlands 112,765,451 13 Cote d’Ivoire 139,788,913

14 Panama 110,162,330 14 Spain 139,233,789

15 Italy 104,865,505 15 Peru 119,415,764

16 Cameroon 64,653,451 16 Panama 97,900,985

17 Dominican Rep. 58,149,595 17 Cameroon 77,074,916

18 Sweden 45,166,669 18 Italy 60,192,897

19 Brazil 38,555,322 19 Czech Rep. 49,747,656

53 Mozambique 1,670,994 20 Mozambique 41,533,060



50% over the same period (Fig. 2.14). The glob-al sugar price is subject to volatility and due to excess supply has fallen since 2011. The value of Mozambican sugar exports has mirrored this trend.

Europe is the principle destination for Mozambican sugar exports with over 70% of exports going to Portugal, Spain and Italy in the period 2011 to 2015 and these markets growing signifi cantly over the last 10 years. (Fig. 2.15)

Mozambique’s global ranking in the sugar market by export value has improved climbing, from 69th place in 2006 to 64th place in 2014 (Table 2.7).

Sugar

Historically, Mozambique has been a major sugar producer but by 1980 production had fallen to a sig-nifi cant low level as a result of the civil war. The re-vitalisation of Mozambique’s sugar industry is con-sidered a major success story attracting investment from South Africa and Mauritius.

Sugar is both exported, as cane or syrup (molas-ses), and imported as refi ned, white sugar mainly to meet demand from beverage companies and a number of breweries. Exports by volume have ris-en over the last ten years to over 300,000 tonnes in 2015 and have outperformed the global trend where volumes have increased by approximately


Figure 2.12: Mozambique banana exports and global trends



-

20

10

30

40

50

-

30

60

90

120

150

20042006

20082010

20122013

20142015



-

6,000

3,000

9,000

12,000

15,000

18,000

-

5,000

10,000

15,000

20,000

30,000

25,000

20052006

20072008

20092010

20112012

20132014


Source: UN Comtrade

Figure 2.13: Mozambique banana export destination


South Africa82%

Other2%

Iran16%

South Africa69%

Kuwait2%

Other3%

UAE4%

Iran4%

Saudi Arabia18%

Source: UN Comtrade


Table 2.6: Banana exports world ranking


1 Ecuador 1,213,576,373 1 Ecuador 2,620,664,069

2 Belgium 1,151,309,846 2 Belgium 1,335,550,929

3 Costa Rica 645,152,006 3 Philippines 1,137,315,622

4 Colombia 525,457,557 4 Colombia 835,546,254

5 Germany 406,015,000 5 Guatemala 721,443,494

6 Philippines 405,444,333 6 USA 470,246,918

7 USA 240,069,557 7 Germany 391,873,334

8 Guatemala 233,031,692 8 Dominican Rep. 331,572,516

9 Honduras 131,525,973 9 Netherlands 249,783,121

10 Ghana 118,945,693 10 France 246,041,287

11 Cote d’Ivoire 115,625,889 11 Honduras 221,616,975

12 France 114,726,827 12 Mexico 179,693,289

13 Netherlands 112,765,451 13 Cote d’Ivoire 139,788,913

14 Panama 110,162,330 14 Spain 139,233,789

15 Italy 104,865,505 15 Peru 119,415,764

16 Cameroon 64,653,451 16 Panama 97,900,985

17 Dominican Rep. 58,149,595 17 Cameroon 77,074,916

18 Sweden 45,166,669 18 Italy 60,192,897

19 Brazil 38,555,322 19 Czech Rep. 49,747,656




50% over the same period (Fig. 2.14). The glob-al sugar price is subject to volatility and due to excess supply has fallen since 2011. The value of Mozambican sugar exports has mirrored this trend.

Europe is the principle destination for Mozambican sugar exports with over 70% of exports going to Portugal, Spain and Italy in the period 2011 to 2015 and these markets growing signifi cantly over the last 10 years. (Fig. 2.15)

Mozambique’s global ranking in the sugar market by export value has improved climbing, from 69th place in 2006 to 64th place in 2014 (Table 2.7).

Sugar

Historically, Mozambique has been a major sugar producer but by 1980 production had fallen to a sig-nifi cant low level as a result of the civil war. The re-vitalisation of Mozambique’s sugar industry is con-sidered a major success story attracting investment from South Africa and Mauritius.

Sugar is both exported, as cane or syrup (molas-ses), and imported as refi ned, white sugar mainly to meet demand from beverage companies and a number of breweries. Exports by volume have ris-en over the last ten years to over 300,000 tonnes in 2015 and have outperformed the global trend where volumes have increased by approximately


Table 2.7: Sugar exports world ranking2006 ranking Exports (USD) 2014 ranking Exports (USD)

1 Brazil 6.347.522.140 1 Brazil 9.616.252.505

2 France 1.845.479.894 2 Thailand 2.971.493.438

3 Germany 1.621.460.000 3 Germany 2.518.813.552

4 Belgium 1.411.180.375 4 USA 2.267.758.308

5 USA 1.042.843.156 5 Netherlands 1.818.248.331

6 Thailand 873.841.792 6 France 1.729.429.451

7 Netherlands 866.789.002 7 Mexico 1.721.427.209

8 Mexico 857.568.289 8 China 1.540.350.663

9 Canada 712.393.121 9 Belgium 1.364.298.276

10 United Kingdom 710.806.172 10 India 1.306.197.907

11 India 680.052.657 11 Guatemala 1.051.411.878

12 Colombia 568.786.182 12 Canada 934.930.883

13 Spain 520.577.315 13 Colombia 819.552.311

14 Poland 480.908.894 14 Spain 720.900.869

15 China 462.420.105 15 Poland 679.670.253

16 Italy 407.703.221 16 Turkey 669.764.958

17 United Arab Emirates 404.844.228 17 United Kingdom 645.645.649

18 South Africa 397.755.299 18 United Arab Emirates 576.019.561

19 Mauritius 357.019.910 19 South Africa 526.583.005

69 Mozambique 48.010.267 64 Mozambique 86.484.255

Grand Total 28.259.217.357 Grand Total 44.354.416.786

Mozambique % 0,17% Mozambique % 0,19%

Source: UN Comtrade

Crustaceans

Mozambique is famous for its seafood with prawn and shrimp accounting for approximately 80% of export volume of crustaceans. Nevertheless, export volumes and value have fallen by two thirds over the last ten years in contrast to global trends where volumes have steadily increased and export values have risen signifi cantly (Figs. 2.16).

Europe is the principal export destination for Mo-zambique’s crustaceans with Spain and Portugal consistently taking over 50% of export volume (Fig. 2.17). However, the importance of these markets

has reduced over the last 5 years with increasing volumes being exported to Asia and notably to Chi-na which accounts for 18% of export volume.

The decline in the export value of Mozambican crustacean is refl ected its global ranking that has fallen from 30th place in 2006 to 44th place in 2014 with a fall in global market share of more than two thirds from 0.63% to 0.19% over the same period (Table 2.8). On a more positive note, Mozambique appears to have few regional competitors in this sector.


Figure 2.14: Mozambique sugar export/import and global trends

Mozambique Global trend (incl. sugar confectionery)

2005 2007 2009 20132010 2015

Expots volume - left axis Import volume - left axis

Expots value - right axis Import value - right axis

-

50

100

150

200

-

100

200

300

400


Expots volume - left axis Import value - right axis

40,000

60,000

80,000

20,000

-

10,000

20,000

30,000

40,000

50,000

60,000

-

20052006

20072008

20092010

20132012

20112014


Source: UN Comtrade

Figure 2.15: Mozambique sugar export destinations


Portugal7%

Kenya13%

France9%

Finland8%

Other48%

United Kingdom15%

Netherlands6%

Portugal25%

France6%

Spain24%Italy

22%

Other17%

Source: UN Comtrade


Table 2.7: Sugar exports world ranking2006 ranking Exports (USD) 2014 ranking Exports (USD)

1 Brazil 6.347.522.140 1 Brazil 9.616.252.505

2 France 1.845.479.894 2 Thailand 2.971.493.438

3 Germany 1.621.460.000 3 Germany 2.518.813.552

4 Belgium 1.411.180.375 4 USA 2.267.758.308

5 USA 1.042.843.156 5 Netherlands 1.818.248.331

6 Thailand 873.841.792 6 France 1.729.429.451

7 Netherlands 866.789.002 7 Mexico 1.721.427.209

8 Mexico 857.568.289 8 China 1.540.350.663

9 Canada 712.393.121 9 Belgium 1.364.298.276

10 United Kingdom 710.806.172 10 India 1.306.197.907

11 India 680.052.657 11 Guatemala 1.051.411.878

12 Colombia 568.786.182 12 Canada 934.930.883

13 Spain 520.577.315 13 Colombia 819.552.311

14 Poland 480.908.894 14 Spain 720.900.869

15 China 462.420.105 15 Poland 679.670.253

16 Italy 407.703.221 16 Turkey 669.764.958

17 United Arab Emirates 404.844.228 17 United Kingdom 645.645.649

18 South Africa 397.755.299 18 United Arab Emirates 576.019.561

19 Mauritius 357.019.910 19 South Africa 526.583.005

69 Mozambique 48.010.267 64 Mozambique 86.484.255

Grand Total 28.259.217.357 Grand Total 44.354.416.786

Mozambique % 0,17% Mozambique % 0,19%

Source: UN Comtrade

Crustaceans

Mozambique is famous for its seafood with prawn and shrimp accounting for approximately 80% of export volume of crustaceans. Nevertheless, export volumes and value have fallen by two thirds over the last ten years in contrast to global trends where volumes have steadily increased and export values have risen signifi cantly (Figs. 2.16).

Europe is the principal export destination for Mo-zambique’s crustaceans with Spain and Portugal consistently taking over 50% of export volume (Fig. 2.17). However, the importance of these markets

has reduced over the last 5 years with increasing volumes being exported to Asia and notably to Chi-na which accounts for 18% of export volume.

The decline in the export value of Mozambican crustacean is refl ected its global ranking that has fallen from 30th place in 2006 to 44th place in 2014 with a fall in global market share of more than two thirds from 0.63% to 0.19% over the same period (Table 2.8). On a more positive note, Mozambique appears to have few regional competitors in this sector.


Table 2.8: Crustaceans exports world ranking


1 Canada 1,444,389,184 1 India 3,834,859,472

2 Viet Nam 1,421,035,051 2 Ecuador 2,580,590,424

3 Thailand 1,192,221,015 3 Viet Nam 2,553,754,261

4 Indonesia 1,067,782,393 4 Canada 2,295,764,945

5 India 922,800,349 5 China 2,043,897,702

6 Ecuador 591,886,549 6 Indonesia 1,815,229,830

7 USA 588,027,358 7 USA 1,138,532,729

8 Bangladesh 482,589,875 8 Thailand 966,598,099

9 Australia 481,733,373 9 Argentina 776,825,030

10 United Kingdom 467,255,007 10 Australia 699,795,116

11 Denmark 418,859,591 11 Netherlands 621,758,630

12 China 398,469,866 12 Russian Federation 548,821,139

13 Mexico 374,697,119 13 Denmark 491,329,091

14 Argentina 371,517,765 14 United Kingdom 441,933,755

15 Belgium 360,933,410 15 Mexico 423,084,461

16 Netherlands 315,433,450 16 Malaysia 418,278,046

17 Malaysia 286,190,492 17 Belgium 413,414,836

18 Brazil 241,114,229 18 Spain 409,786,537

19 Spain 239,386,924 19 Honduras 345,303,963




2015 with volume increasing fi vefold over the pe-riod. As Figure 2.18 illustrates, there is a high cor-relation between the increase in food imports and population growth.

2.3 Main Food Imports

Mozambique is a net importer of basic foods includ-ing cereals (maize, wheat, and rice) and substan-tial quantities of meat and livestock products. Food imports have risen substantially between 2001 and


Figure 2.16: Mozambique crustaceans exports and global trends



-

40

20

60

80

100

-

5

10

15

20

25

20052006

20072008

20092010

20112012

20132014

2015



-

10,000

5,000

15,000

20,000

25,000

30,000

-

500

1,000

1,500

2,000

3,000

2,500

20052006

20072008

20092010

20112012

20132014


Source: UN Comtrade

Figure 2.17: Mozambique crustaceans export destinations


China15%

France3%

Japan3%

Portugal23%

USA3%

China0,4%

Spain47%

Other6%

South Africa11%

China18%

France3%

Thailand3%

Viet Nam3%

Portugal29%

Spain26%

Other8%

Source: UN Comtrade


Table 2.8: Crustaceans exports world ranking


1 Canada 1,444,389,184 1 India 3,834,859,472

2 Viet Nam 1,421,035,051 2 Ecuador 2,580,590,424

3 Thailand 1,192,221,015 3 Viet Nam 2,553,754,261

4 Indonesia 1,067,782,393 4 Canada 2,295,764,945

5 India 922,800,349 5 China 2,043,897,702

6 Ecuador 591,886,549 6 Indonesia 1,815,229,830

7 USA 588,027,358 7 USA 1,138,532,729

8 Bangladesh 482,589,875 8 Thailand 966,598,099

9 Australia 481,733,373 9 Argentina 776,825,030

10 United Kingdom 467,255,007 10 Australia 699,795,116

11 Denmark 418,859,591 11 Netherlands 621,758,630

12 China 398,469,866 12 Russian Federation 548,821,139

13 Mexico 374,697,119 13 Denmark 491,329,091

14 Argentina 371,517,765 14 United Kingdom 441,933,755

15 Belgium 360,933,410 15 Mexico 423,084,461

16 Netherlands 315,433,450 16 Malaysia 418,278,046

17 Malaysia 286,190,492 17 Belgium 413,414,836

18 Brazil 241,114,229 18 Spain 409,786,537

19 Spain 239,386,924 19 Honduras 345,303,963




2015 with volume increasing fi vefold over the pe-riod. As Figure 2.18 illustrates, there is a high cor-relation between the increase in food imports and population growth.

2.3 Main Food Imports

Mozambique is a net importer of basic foods includ-ing cereals (maize, wheat, and rice) and substan-tial quantities of meat and livestock products. Food imports have risen substantially between 2001 and


Wheat

As bread is a staple food for many Mozambican families, wheat is one of the country’s major food imports. During the period 2006 to 2010, the USA, Germany and Argentinian were the princi-pal suppliers, with 70% of wheat imports coming from these countries (Fig. 2.20). However, the

last fi ve years have witnessed greater diversity in supply with Australia emerging as a signifi cant supplier and imports from the UEA, Canada, and Russia all growing. In contrast, imports from the USA have seen a reduction of approximately two thirds.

Figure 2.20: Wheat import origins


Canada6% Argentina

14%Germany23%

Australia4%

UAE4%

Other11%

Russian4%

USA33%

South Africa1%

Ukraine6%

Brazil7%

Canada8%

Germany6%

Australia24%

UAE12%

Other17%

Russian10%

USA10%

Source: UN Comtrade

Maize

Maize imports are sourced principally from within the SADC region with neighbouring South Africa being the dominant supplier (Fig. 2.21). However, during the last fi ve years, Zambia has

emerged as the supplier of 11% of imported maize and imports from Malawi, although small, have tripled from 1 % to 3 % over the last ten years.

Figure 2.21: Maize import origins


South Africa91%

Other6%Malawi

1%USA2%

United Kingdom3%

South Africa82%

Other2%

Zambia2%

Malawi11%

Source: UN Comtrade


Figure 2.18: Food products imported by Mozambique 2001-2015

RiceMozambiquepopulation - right axis

Wheat

Maize Frozen �sh

250

200

150

100

50

0

300

350

400

450

550

600

(million USD) (million People)

500

20012002

20032004

20052006

20072008

20092010

20112012

20132014

2015

Live animals & Meats

16

18

10

22

24

26

28

30

Source: UN Comtrade; UN, World Population Prospects The 2015 Revision

Moreover, Mozambique’s population is expected to continue to grow exponentially reaching a pro-jected 40 million by 2030 and over 60 million by 2050 (Fig 2.19). This suggests that without sub-

stantial growth in domestic agricultural produc-tion, the import of basic foodstuffs will continue to increase with resulting implications for the coun-try’s trade balance.

Figure 2.19: Population trends and projections for Mozambique

0

20

40

60

80

100

120

140

1990 2000 2013 2030 2050 2100

0-14 14-65 65+

(million People)

Source: UN World Population Prospects The 2015 Revision


Wheat

As bread is a staple food for many Mozambican families, wheat is one of the country’s major food imports. During the period 2006 to 2010, the USA, Germany and Argentinian were the princi-pal suppliers, with 70% of wheat imports coming from these countries (Fig. 2.20). However, the

last fi ve years have witnessed greater diversity in supply with Australia emerging as a signifi cant supplier and imports from the UEA, Canada, and Russia all growing. In contrast, imports from the USA have seen a reduction of approximately two thirds.

Figure 2.20: Wheat import origins


Canada6% Argentina

14%Germany23%

Australia4%

UAE4%

Other11%

Russian4%

USA33%

South Africa1%

Ukraine6%

Brazil7%

Canada8%

Germany6%

Australia24%

UAE12%

Other17%

Russian10%

USA10%

Source: UN Comtrade

Maize

Maize imports are sourced principally from within the SADC region with neighbouring South Africa being the dominant supplier (Fig. 2.21). However, during the last fi ve years, Zambia has

emerged as the supplier of 11% of imported maize and imports from Malawi, although small, have tripled from 1 % to 3 % over the last ten years.

Figure 2.21: Maize import origins


South Africa91%

Other6%Malawi

1%USA2%

United Kingdom3%

South Africa82%

Other2%

Zambia2%

Malawi11%

Source: UN Comtrade


Frozen � sh

The value of frozen fi sh imports has steadily grown over the last 15 years with a notable increase to over $80 million per year in the last three years (Fig 2.23).

Supply is dominated by two southern African countries with Namibia supplying 60% of frozen fi sh imports and a further 26% coming from South Africa (Fig. 2.23).

Figure 2.23: Frozen fi sh imported by Mozambique & import origins

-

20

40

60

80

100(million USD)

20012002

20032004

20052006

20072008

20092010

20112012

20132014

2015

South Africa26%

Other8%

Japan2%

Namibia60%

New Zealand4%

Source: UN Comtrade

Tomatoes

Almost all fresh tomatoes imported into Mozambique come from neighbouring South Africa and despite some increase in domestic production, imported tomatoes dominate Mozambique’s urban retail mar-ket (Fig.2.24). The value of imported fresh tomatoes

has, in fact, varied over the period 2002 to 2014, yet Mozambique has consistently imported fresh toma-toes over the last ten years. The value of imported preserved tomatoes has also slowly increased as a proportion of the total value of imported tomato.

Figure 2.24: Tomatoes imported by Mozambique & Fresh tomatoes import origin

0

1

2

3

4

5(million USD)

2002 2004 2006 2008 2010 2012 2014

Tomatoes fresh Tomatoes preserved

South Africa98%

Other2%

Source: UN Comtrade


Rice

Despite some domestic production, Mozam-bique depends on imports for two-thirds of total rice consumption. Most of the rice imported to Mozambique comes from Asia, although in the last fi ve years Thailand has become the principal

supplier accounting for over 50% of rice imports and supply from Vietnam has doubled (Fig. 2.22). Imports from Pakistan, a major supplier in the pe-riod 2006 to 2010, fell by almost half to 18% over the last fi ve years.

Figure 2.22: Rice import origins


India8%

Thailand36%

UAE2%China

3%

Viet Nam14%

Pakstan35%

Other2%

India11%

Japan2%

Thailand54%

UAE6%

Viet Nam7%

Pakstan18%

Other21%

Source: UN Comtrade

Box 2.1: Food security and trade

According to The State of Agricultural Commodity Markets 2015-2016, a report prepared by FAO, population increases, urbanization, and changing patterns of consumption, suggest that global food production will need to increase by 60% by 2050 from the 2005–07 baseline and this will have signifi cant implications for Africa where nearly all major food commodi-ties have a net import status, a situation that is expected to intensify. Trade affects the structure of domestic production and the productivity and composition of agricultural output, which in turn affects food availability, access, and utilization.

The theme of the report for the 2015-16 edition is “Trade and food security: achieving a better balance between national pri-orities and the collective good” highlighting the importance of an integrated approach to food security. The report explains that although openness to trade can resolve some of the problems related to food availability, and may lead to downward pressures on food prices, it also carries risks, potentially leaving countries exposed to short-term market shocks and import surges that can effectively undermine nascent domestic food production. Moreover, the increasingly globalized nature of agricultural commodity markets means that the actions of one country or trading group can have knock-on effects for the rest of the world. Changes in production, market stability and trade policy in one major importer or exporter can have major implications for world markets that will impact on global supplies and prices, and potentially on food security.

The report also articulates that changing trading patterns can impact on domestic production and consumption of food at all stages of the value chain. Increases in food imports can undermine domestic production and cause economic disruption that reduces incomes, raises unemployment and affects the welfare and food security of some population groups. Moreover, individual countries are often more vulnerable than those that are members of regional trading blocs which can facilitate a pooling of the risks associated with globalization and short term disruptions to domestic production.

The implications and impact of trade policy and food security policy are intertwined, emphasizing the importance of coordination among the key ministries and institutions of agriculture and trade. However, the report indicates many countries are not fully coordinating and prioritizing trade and food security issues in an integrated manner. Greater coherence between trade and domestic production policy is of the utmost importance to stabilize food security and reduce the vulnerability of developing countries to external shocks.

Source: FAO, The State of Agricultural Commodity Markets 2015-2016


Frozen � sh

The value of frozen fi sh imports has steadily grown over the last 15 years with a notable increase to over $80 million per year in the last three years (Fig 2.23).

Supply is dominated by two southern African countries with Namibia supplying 60% of frozen fi sh imports and a further 26% coming from South Africa (Fig. 2.23).

Figure 2.23: Frozen fi sh imported by Mozambique & import origins

-

20

40

60

80

100(million USD)

20012002

20032004

20052006

20072008

20092010

20112012

20132014

2015

South Africa26%

Other8%

Japan2%

Namibia60%

New Zealand4%

Source: UN Comtrade

Tomatoes

Almost all fresh tomatoes imported into Mozambique come from neighbouring South Africa and despite some increase in domestic production, imported tomatoes dominate Mozambique’s urban retail mar-ket (Fig.2.24). The value of imported fresh tomatoes

has, in fact, varied over the period 2002 to 2014, yet Mozambique has consistently imported fresh toma-toes over the last ten years. The value of imported preserved tomatoes has also slowly increased as a proportion of the total value of imported tomato.

Figure 2.24: Tomatoes imported by Mozambique & Fresh tomatoes import origin

0

1

2

3

4

5(million USD)

2002 2004 2006 2008 2010 2012 2014

Tomatoes fresh Tomatoes preserved

South Africa98%

Other2%

Source: UN Comtrade

27Positioning of Mozambique in the International Trade 2016

Global & Regional Trends

C h a p t e r III

Population growth leads to various socio-economic changes, including increased demand for food and growth in available labour force. If the working age population can be equipped with the appropriate skill-set and absorbed into the labour force, then popula-tion growth can contribute positively to domestic pro-duction, economic growth and the balance of trade. However, if domestic production of food is unable to keep pace with population growth, dependence of food imports will increase, making a country more vulnerable to global commodity price fl uctuations.

3.1 Demographic Trends and Food Security

Demography as a factor of socio-economic change impacts on every aspect of human development. The global population is expected to grow by ap-proximately 30% during the next 35 years, from 7.3 billion in 2015 to 9.7 billion in 2050, according to UN World Population Prospects. As Figure 3.1 shows, population in Africa is projected to grow at a faster rate. In 2015, Africa accounted for 16% of the global population, but by 2050, this is projected to rise to over 25% with the population of Africa exceeding that of both China and India.


Meats and Live animals

The import of meat to Mozambique has stead-ily increased over the last 15 years and broadly correlates with population growth (as seen in Fig. 2.26). Despite commercial investment in Mozam-bique’s poultry industry, poultry imports (mainly frozen chicken) account for the majority of im-ported meat with volumes increasing substantially over the last 15 years, the majority coming from Brazil, although South Africa is also an important

supplier (Fig. 2.25). Imports of beef and bovine products were almost negligible for much of the period 2001 to 2010 (averaging just $1 million per year) but have witnessed a marked growth over the last 5 years. Import of pork and other meats has been small and fairly consistent for much of the period although has seen some growth in the last 3 years. Live animal imports come almost en-tirely from South Africa and Zimbabwe.

Figure 2.25: Mozambique meats and live animals imports and import origins

10

-

20

30

40

50

60

(million USD)

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Bovine meat Fowls meat Swine meat Other meats Live animals

Meat of Fowls Meat of Bovine Live Animals

South Africa16%

Brazil67%

Portugal2%

Italy2%

Other6%

USA9%

South Africa89%

Italy3%

Swaziland4%

Other4%

South Africa70%

Other3%

Zimbabwe25%

Zambia2%

Source: UN Comtrade

27Positioning of Mozambique in the International Trade 2016

Global & Regional Trends

C h a p t e r III

Population growth leads to various socio-economic changes, including increased demand for food and growth in available labour force. If the working age population can be equipped with the appropriate skill-set and absorbed into the labour force, then popula-tion growth can contribute positively to domestic pro-duction, economic growth and the balance of trade. However, if domestic production of food is unable to keep pace with population growth, dependence of food imports will increase, making a country more vulnerable to global commodity price fl uctuations.

3.1 Demographic Trends and Food Security

Demography as a factor of socio-economic change impacts on every aspect of human development. The global population is expected to grow by ap-proximately 30% during the next 35 years, from 7.3 billion in 2015 to 9.7 billion in 2050, according to UN World Population Prospects. As Figure 3.1 shows, population in Africa is projected to grow at a faster rate. In 2015, Africa accounted for 16% of the global population, but by 2050, this is projected to rise to over 25% with the population of Africa exceeding that of both China and India.


Box 3.1: Changing dietary habits and diversi cation of foods demand

The OECD-FAO Agriculture Outlook 2015-2024 (2015) shows consumption patterns of basic foodstuffs for least developed countries (LDCs) in comparison to developed countries for the periods 2002-04, 2012-14 and projected for 2024 (Fig. 3.4). Food consumption in LDCs has been growing and this trend is projected to continue over the next 10 years. As economic development in LDCs improves, calorie consumption increases and the population starts to consume a greater variety of foods. However, whilst the pattern for developed countries shows a balanced consumption across different food types, consumption in LDCs, even as they start to grow and diversify, is domi-nated by cereals. Increases in consumption of protein rich meat and dairy products are still signifi cantly smaller. Nevertheless, the pattern of food consumption certainly changes, and to respond to this growing demand for food and greater dietary variations, LDCs will have to increase domestic production of cereal and meats, or import these commodities in increasing volumes. Moreover, increasing domestic meat production is likely to require a concomi-tant increase in domestic cereal production (or imports) to provide animal feed. This suggests that in order to un-derstand changing dietary and food consumption patterns, it is necessary to take a holistic look at the food value chain and to see how economic development will impact on the supply and demand for food.

Figure 3.3: Calorie intake per capita in LDCs and Developed countries

2002-04 ave

2012-14 ave

Least Developed Countries

Dairy Meat Fish Sugar OtherVegetable oilsCereals

(kcal/day/person)

Developed Countries

2024-

500

1,000

1,500

2,000

2,500

3,000

2002-04 ave

2012-14 ave

2024

Source: OECD-FAO, Agricultural Outlook 2015-2024

3.2 Demographic Trends and Socio-Economic Structure

An analysis of the structure of global population by age group over the last 35 years (1980-2015) shows that the labour force (those in the 15-65 age group) has increased as a percentage of the total popula-tion, but has been accompanied by an increase in the elderly, dependent population (over 65s). How-ever, projections anticipate a marked change oc-curring over the next 35 years with the working age population falling back (from 66% to 63%) but the

percentage of the elderly population doubling from 8% to 16% of the total, indicating a decline in the importance of what is termed the “demographic bo-nus”. However, an examination of continental data suggests that Africa will contradict the global trend with the labour force, as a percentage of total popu-lation, continuing to grow for the next 30 years, thus maintaining the demographic bonus for the conti-nent.


Figure 3.1: World population trends 1980-2050

1980 (4,440 million)

2015 (7,349 million)

2050 (9,725 million)

China, 978 India, 697

Europe, 694 Other, 615

Africa, 478

Latin America, 365

South-Eastern Asia, 258

North America, 254

China, 1,376 India, 1,311

Africa, 1,186 Other, 1,112

Europe, 738

Latin America, 634


North America, 358

Africa, 2,478 India, 1,705

Other, 1,478


Latin America, 784

China, 1,348Europe, 707

North Ameri-ca, 433

Source: UN, World Population Prospects The 2015 Revision

Figure 3.2 illustrates the difference between the pro-duction and consumption of wheat, rice and maize in Sub-Saharan Africa (excluding South Africa) for the periods 2002-04, 2012-14 and projected for 2024. The trend shows that for both wheat and rice,

consumption has been outstripping production which has led to sharp growth in imports volumes. Population growth in the region is likely to exacer-bate this trend to 2024 with net imports rising even further.

Figure 3.2: Cereals production, consumption and net import – Sub-Saharan Africa (excl. South Africa)

Wheat Rice Maize

0

5

10

15

20

25

30

35

40(million tonnes)

0

5

10

15

20

25

30

35

40(million tonnes)

2002-2004 2012-2014 2024

Production

Net Import - right axis

Consumption


ave ave

0

5

10

15

20

25

30

35

40(million tonnes)

0

5

10

15

20

25

30

35

40(million tonnes)

2002-2004 2012-2014 2024

Production Consumption

ave ave


0

20

40

60

80

100

120

140(million tonnes)

-5

0

5

10

15

20

25

30

35

40(million tonnes)

2002-2004 2012-2014 2024

Production Consumption

ave ave



Box 3.1: Changing dietary habits and diversi cation of foods demand

The OECD-FAO Agriculture Outlook 2015-2024 (2015) shows consumption patterns of basic foodstuffs for least developed countries (LDCs) in comparison to developed countries for the periods 2002-04, 2012-14 and projected for 2024 (Fig. 3.4). Food consumption in LDCs has been growing and this trend is projected to continue over the next 10 years. As economic development in LDCs improves, calorie consumption increases and the population starts to consume a greater variety of foods. However, whilst the pattern for developed countries shows a balanced consumption across different food types, consumption in LDCs, even as they start to grow and diversify, is domi-nated by cereals. Increases in consumption of protein rich meat and dairy products are still signifi cantly smaller. Nevertheless, the pattern of food consumption certainly changes, and to respond to this growing demand for food and greater dietary variations, LDCs will have to increase domestic production of cereal and meats, or import these commodities in increasing volumes. Moreover, increasing domestic meat production is likely to require a concomi-tant increase in domestic cereal production (or imports) to provide animal feed. This suggests that in order to un-derstand changing dietary and food consumption patterns, it is necessary to take a holistic look at the food value chain and to see how economic development will impact on the supply and demand for food.

Figure 3.3: Calorie intake per capita in LDCs and Developed countries

2002-04 ave

2012-14 ave

Least Developed Countries

Dairy Meat Fish Sugar OtherVegetable oilsCereals

(kcal/day/person)

Developed Countries

2024-

500

1,000

1,500

2,000

2,500

3,000

2002-04 ave

2012-14 ave

2024


3.2 Demographic Trends and Socio-Economic Structure

An analysis of the structure of global population by age group over the last 35 years (1980-2015) shows that the labour force (those in the 15-65 age group) has increased as a percentage of the total popula-tion, but has been accompanied by an increase in the elderly, dependent population (over 65s). How-ever, projections anticipate a marked change oc-curring over the next 35 years with the working age population falling back (from 66% to 63%) but the

percentage of the elderly population doubling from 8% to 16% of the total, indicating a decline in the importance of what is termed the “demographic bo-nus”. However, an examination of continental data suggests that Africa will contradict the global trend with the labour force, as a percentage of total popu-lation, continuing to grow for the next 30 years, thus maintaining the demographic bonus for the conti-nent.


Looking in more detail at the changes expected to the population structure in Mozambique, Figure 3.6 shows a dependency rate of approximately 50/50 for 2015, that is 49% of the population economically in-active (under 15s and over 65s) dependent on 51%

of the population that forms the labour force. Howev-er, this trend is changing. By 2050, those of working age are expected to comprise 61% of the population supporting the remaining 39%, representing a signifi -cant potential demographic bonus for the country.

Figure 3.6: Demographic age pyramid - Mozambique

1980 2015

4.5 3.5 2.5 1.5 0.5 0.5 1.5 2.5 3.5 4.5

Famele

(million people)

Male

85+

75-79

70-7465-69

60-64

55-5950-5445-49

40-4435-39

30-3425-2920-24

15-1910-145-90-4

4%

45%24%

27%

0-14

30-6515-29

65+

4.5 3.5 2.5 1.5 0.5 0.5 1.5 2.5 3.5 4.5

Famele

Male

85+75-79

70-74

65-69

60-64

55-5950-54

45-4940-4435-39

30-3425-29

20-24

15-1910-145-90-4

0-14

30-6515-29

65+

33% 35%

28%

4%

(million people)


Not only is the world’s population growing, but it is becom-ing more urbanised. The proportion of the world’s popula-tion living in urban areas is expected to increase from 54% in 2014 to 66% in 2050. The population of Mozambique is also rapidly urbanising. In 1990, 75% of the population lived in rural areas and the remaining 25% in urban areas.

Population projections for 2015 indicate that out of the to-tal of c. 25 million inhabitants, 32% live in urban areas and 68% in rural areas. By 2030 the urban population of Mo-zambique is expected to account for 38% of the total and in less than 35 years’ time, by 2050, half of Mozambique’s population is projected to live in towns or cities.

Figure 3.7: World urban population growth rates & Rural/urban population trends for Mozambique1990-2050

60

80

100(% of urban population)

40

20

01990

Africa

Europe

World

Northern America

Asia

Latin America

2000 2015 2030 2050

60

70

80

90100

5040

302010

0

% of urban population % of rural population

1990 2000 2015 2030 2050

7571 68

625149

3832

2925

(% of rural/urban population in Mozambique)

Source: UN, World Urbanization Prospects The 2014 Revision


Figure 3.4: World demographic trends by age group 1980-2050

1980 2015 2050

85+

75-79

70-7465-6960-64

55-5950-5445-4940-4435-39

30-3425-2920-24

15-1910-14

5-90-4

Africa Asia AmericaEurope Other

- 200 400 600 800(million people)

6%

35%59%

0-1415-6565+

(age)(4,440 million in Total)

100+95-9990-9485-8980-8475-7970-7465-6960-6455-5950-5445-4940-4435-3930-3425-2920-2415-1910-14

5-90-4

Africa Asia America

Europe Other

- 200 400 600 800

8%

26%

66%

0-1415-6565+

(million people)

(age)(7,349 million in Total)

100+(age)

95-9990-9485-8980-8475-7970-7465-6960-6455-5950-5445-4940-4435-3930-3425-2920-2415-1910-14

5-90-4

Africa Asia AmericaEurope Other

- 200 400 600 800

0-1415-6565+

21%16%

63%

(million people)

(9,725 million in Total)


Moreover, the average age of the population in Africa is signifi cantly lower than for other con-tinents and is aging at a slower rate (Fig. 3.5), with the average age and ageing rate lower still for Mozambique. Whilst the average age of the global population has risen from 22 to 29 over the last 25 years (1990-2015), the average age of the population in both Africa and Mozambique

has remained in the upper teens, between 17 to 19. Looking ahead, the average age of the global population is expected to increase to 33 by 2030 and 36 by 2050, but for Mozambique a smaller rise is foreseen from 17 to 19 by 2030 and then to 22 by 2015, with similar trends for Africa as a whole. Population aging is most prominent for China and Latin America.

Figure 3.5: World population median age trends 1990-2050

60(age)

50

40

30

20

10

0

35 3538

4245 46

50 China

Europe

North America

Latin America

World

Africa

Mozambique

1990 2000 2015 2030 2050

4340

37

30252422

26242829

3334

4241

36

252221

191918171718

16

38



Looking in more detail at the changes expected to the population structure in Mozambique, Figure 3.6 shows a dependency rate of approximately 50/50 for 2015, that is 49% of the population economically in-active (under 15s and over 65s) dependent on 51%

of the population that forms the labour force. Howev-er, this trend is changing. By 2050, those of working age are expected to comprise 61% of the population supporting the remaining 39%, representing a signifi -cant potential demographic bonus for the country.

Figure 3.6: Demographic age pyramid - Mozambique

1980 2015

4.5 3.5 2.5 1.5 0.5 0.5 1.5 2.5 3.5 4.5

Famele

(million people)

Male

85+

75-79

70-7465-69

60-64

55-5950-5445-49

40-4435-39

30-3425-2920-24

15-1910-145-90-4

4%

45%24%

27%

0-14

30-6515-29

65+

4.5 3.5 2.5 1.5 0.5 0.5 1.5 2.5 3.5 4.5

Famele

Male

85+75-79

70-74

65-69

60-64

55-5950-54

45-4940-4435-39

30-3425-29

20-24

15-1910-145-90-4

0-14

30-6515-29

65+

33% 35%

28%

4%

(million people)


Not only is the world’s population growing, but it is becom-ing more urbanised. The proportion of the world’s popula-tion living in urban areas is expected to increase from 54% in 2014 to 66% in 2050. The population of Mozambique is also rapidly urbanising. In 1990, 75% of the population lived in rural areas and the remaining 25% in urban areas.

Population projections for 2015 indicate that out of the to-tal of c. 25 million inhabitants, 32% live in urban areas and 68% in rural areas. By 2030 the urban population of Mo-zambique is expected to account for 38% of the total and in less than 35 years’ time, by 2050, half of Mozambique’s population is projected to live in towns or cities.

Figure 3.7: World urban population growth rates & Rural/urban population trends for Mozambique1990-2050

60

80

100(% of urban population)

40

20

01990

Africa

Europe

World

Northern America

Asia

Latin America

2000 2015 2030 2050

60

70

80

90100

5040

302010

0

% of urban population % of rural population

1990 2000 2015 2030 2050

7571 68

625149

3832

2925

(% of rural/urban population in Mozambique)

Source: UN, World Urbanization Prospects The 2014 Revision


Box 3.2: Consumption in developing & emerging countries – Bottom of Pyramid

Global Consumption Data prepared by the World Bank provides meticulously disaggregated information on con-sumption patterns in 92 developing and emerging countries ranked into four income groups (Fig 3.10). It clearly shows how consumption patterns change according to income strata, with an average close to 50% of income be-ing spent on food and beverages for the low income and poorest population strata. The potential commercial impli-cations of this area worth consideration, particularly the structure of economy is dynamically transforming. Countries with low income and the poorest populations tend to have the greatest population growth and urbanisation rates. If economic development and growth were anticipated in these countries, the expected change in consumption patterns that would likely to follow could point to some interesting business and investment opportunities that could lead to greater diversifi cation of the economy.

Figure 3.10: Consumption patterns by sector and income segment – 2010 (average of 92 countries)

0 10 20 30 40 50 60 70 80 90 100(%)

54Lowest

Low

Middle

High

Food and Beverages

Health & EducationEnergy & Water Utility

Transport

Clothing and FootwearFinancial Service

Housing

ICTOthers

42

35

21 19 12 9 7 7 4 3 20

10 11 10 8 7 6 1 13

7 11 10 7 5 7 1 11

4 8 7 6 3 7 0 10 Consumer segmentation is based on income per capita (PPP, USD basis using local cur-rency exchange rate as of 2010)

� Lowest: below $2.97 per capita a day

� Low: between $2.97 and $8.44 per capita a day

� Middle: between $8.44 and $23.03 per cap-ita a day

� Higher: above $23.03 per capita a day

Source: World Bank, Global Consumption Database

A key sector for future trade and development in Mo-zambique, Figure 3.11 shows that global energy de-mand increased by over 50% during the period 1990 to 2013 and during this period, the quantity of energy used for power generation almost doubled. Demand for energy is expected to continue to grow to 2030. How-ever, the rate of growth is estimated by the IEA to slow, based on the assumptions and recommendations of the

3.3 Energy Demand and IndustrializationCOP21 climate change conference. This is predicted to lead to signifi cant changes in fuel sources used for power generation. Historically, coal and oil have been the predominant fuels used to generate power with consumption of both increasing over the period 1990 to 2013. However, the importance of these fuels needs to decrease during the period 2013 to 2030 with gas, biofuels and renewables taking on greater signifi cance.

Figure 3.11: Energy demand by sector & Total primary energy demand by resource

1990 2013 2030

Power generation Industry Transport Buildings

8,000

6,000

4,000

2,000

-

10,000

12,000

14,000

16,000

18,000(Mtoe)

1990 2013 2030Coal Oil Gas Nuclear

Hydro Bioenergy Other renewables

8,000

6,000

4,000

2,000

-

10,000

12,000

14,000

16,000

18,000(Mtoe)

Source: IEA, World Energy Outlook 2015


As urban areas grow, they become important clusters for economic development and invest-ment due to the benefits of economies of ag-glomeration. However, with urbanisation the structure of the economy also tends to shift to one which is more service sector driven as economic actors become concentrated in ur-ban areas and engage in the supply of services and greater concentrations of population create

demand. Figure 3.8 shows growth in the ser-vice sector as a percentage of GDP in relation to change in the urban population for Mozam-bique, South Africa, Brazil and India. All coun-tries show greater dependence on the service sector as urbanisation increases. Even with a relatively low urbanisation rate, the service sec-tor in Mozambique already contributes over 50% to GDP.

Figure 3.8: Trend of urbanization and services value added (% of GDP) 1980-2014

20

10

40

30

60

50

80

70

100

90

10 20 30 40 50 60 70 80 90 100

South Africa

(Services, etc. value added % of GDP)

(% of urban population)

Brazil

India

1980

1980

19801980

2014

20142014

Mozambique

2014

Source: UN, World Urbanization Prospects The 2014 Revision; World Bank

As an indication of the dynamic of service sec-tor growth in Mozambique, Figure 3.10 shows the growth in the number of mobile phone subscriptions in the period 2001 to 2013, increasing from nearly zero in 2001 to over 12 million subscriptions in 2012.

Figure 3.11 shows the growth in international tourism and tourism derived revenue over the same period and indicates a similar trend in a key service sector that creates jobs and new business opportunities in both urban areas and other tourist attractions.

Figure 3.9: Mobile and fi xed telephone subscription & International tourism arrivals and revenues

0

2

6

4

10

8

14(million subscriptions)

12

2001 2003 2005 2007 2009 2011 2013

Mobile Celular Fixed telephone

0

0.5

1.0

1.5

2.0

2.5

0

50

150

100

250

200

350

300

2001 2003 2005 2007 2009 2011 2013

International tourism, arrivals - left axis

International tourism, revenue - right axis

(million people) (million USD)

Source: INE


Box 3.2: Consumption in developing & emerging countries – Bottom of Pyramid

Global Consumption Data prepared by the World Bank provides meticulously disaggregated information on con-sumption patterns in 92 developing and emerging countries ranked into four income groups (Fig 3.10). It clearly shows how consumption patterns change according to income strata, with an average close to 50% of income be-ing spent on food and beverages for the low income and poorest population strata. The potential commercial impli-cations of this area worth consideration, particularly the structure of economy is dynamically transforming. Countries with low income and the poorest populations tend to have the greatest population growth and urbanisation rates. If economic development and growth were anticipated in these countries, the expected change in consumption patterns that would likely to follow could point to some interesting business and investment opportunities that could lead to greater diversifi cation of the economy.

Figure 3.10: Consumption patterns by sector and income segment – 2010 (average of 92 countries)

0 10 20 30 40 50 60 70 80 90 100(%)

54Lowest

Low

Middle

High

Food and Beverages

Health & EducationEnergy & Water Utility

Transport

Clothing and FootwearFinancial Service

Housing

ICTOthers

42

35

21 19 12 9 7 7 4 3 20

10 11 10 8 7 6 1 13

7 11 10 7 5 7 1 11

4 8 7 6 3 7 0 10 Consumer segmentation is based on income per capita (PPP, USD basis using local cur-rency exchange rate as of 2010)

� Lowest: below $2.97 per capita a day

� Low: between $2.97 and $8.44 per capita a day

� Middle: between $8.44 and $23.03 per cap-ita a day

� Higher: above $23.03 per capita a day

Source: World Bank, Global Consumption Database

A key sector for future trade and development in Mo-zambique, Figure 3.11 shows that global energy de-mand increased by over 50% during the period 1990 to 2013 and during this period, the quantity of energy used for power generation almost doubled. Demand for energy is expected to continue to grow to 2030. How-ever, the rate of growth is estimated by the IEA to slow, based on the assumptions and recommendations of the

3.3 Energy Demand and IndustrializationCOP21 climate change conference. This is predicted to lead to signifi cant changes in fuel sources used for power generation. Historically, coal and oil have been the predominant fuels used to generate power with consumption of both increasing over the period 1990 to 2013. However, the importance of these fuels needs to decrease during the period 2013 to 2030 with gas, biofuels and renewables taking on greater signifi cance.

Figure 3.11: Energy demand by sector & Total primary energy demand by resource

1990 2013 2030

Power generation Industry Transport Buildings

8,000

6,000

4,000

2,000

-

10,000

12,000

14,000

16,000

18,000(Mtoe)

1990 2013 2030Coal Oil Gas Nuclear

Hydro Bioenergy Other renewables

8,000

6,000

4,000

2,000

-

10,000

12,000

14,000

16,000

18,000(Mtoe)



Turning to the economic impact of the energy and industrial sectors, Figure 3.13 shows the contribution of industry to GDP for Africa and the Gulf States for 2014. The average contribution of the industrial sec-tor to GDP for both Sub-Saharan Africa and world-wide is less than 30% (27% and 26% respectively). For oil producing and resource rich countries, the percentage tends to be much higher, for instance in DR Congo, Gabon, Algeria and the Gulf States. Ni-geria is an interesting case where the data has been disaggregated for the periods 2000-04 and 2010-14,

illustrating that as the country became less depend-ent on oil, and began to diversify its economy, then it became less dependent on the industrial sector for GDP growth, dropping from a 40% to 26% con-tribution to GDP. This would seem to suggest that as Mozambique becomes an exporter of mineral re-sources, and particularly gas, it risks becoming over-dependent on the industrial sector. However, as the case of Nigeria shows, there is also an opportunity to take steps to promote greater economic diversity and more balanced economic development.

Figure 3.13: Industry, value added (% of GDP) 2014 – Sub-Saharan Africa + Gulf States

Mauritania

Congo Rep.

69 6865 64

5756

46

4039 39

3836

33 32 3229 29 29

28 27 26 2625 24 23 23 22 22 21 20 19

17 17 16 16 15 15 14 1410

29

Qatar

Kuwait

Gabon

Saudi Arabia

Algeria

Nigeria(2000-04 ave)

Egipt

Botswana

Lesoth

o

Tunisia

Marocc

o

GuineaBenin

Ghana

Congo, Dem. R

ep

Namibia

Zimbabwe

Burkina Faso

South Afri

caMali

Sub.Saharan Africa

World (2

013)

Nigeria(2010-14 ave.)

Niger

Tanzania

Senegal

Uganda

Sierra Leone

Kenya

Mozambique

Malawi

Cabo Verde

Madagascar

RwandaChad

Guinea-Bissau

Sao Tome and Prince

pe

Ethiopia

Oman

(Industry, value added % of GDP)

Source: World Bank


Box 3.3: COP 21 and energy demand forecast – IEA Bridge Scenario

Development in Mozambique remains challenged by climate change and natural disasters with studies pointing to the intensifying magnitude and frequency of fl oods and droughts. With energy production and use accounting for over two thirds of global greenhouse-gas emissions, delegates to the COP21 conference in 2015 agreed to a programme of deep cuts to emissions whilst seeking to maintain global growth and enhance energy security, par-ticularly for poor and developing nations.

The International Energy Agency reveals in its World Energy Outlook Special Report (2015) that, the use of low-carbon energy is expanding and there are indications that a break in the linkage between economic growth and a concomitant growth in emissions may be taking place. In 2014 over half of new power generation capacity used renewables and although the global economy grew by 3%, CO2 emissions remained stable for the fi rst time in over 40 years. Moreover, the energy intensity of the global economy dropped by 2.3% in 2014, more than double the average rate of fall over the last decade.

The IEA believes that by 2020 a peak in the use of fossil fuels can be achieved through using existing technologies and without changing the development prospects of any one region. This is referred to as the “Bridge Scenario” and Ichievement would be a clear indication of a collective determination to tackle climate change and maintain global warming below the 2 °C limit considered critical by COP 21 delegates. The Bridge Scenario envisages the long-term decarbonisation of the energy sector through the adoption of fi ve measures: � Increasing energy effi ciency, particularly in the industrial, construction and transport sectors. � Gradually phasing out ineffi cient, coal-fi red power plants and banning their construction. � Promoting investment in renewable energy technology with the aim of increasing funding from the current $270

billion to $400 billion by 2030. � Phasing out of fossil-fuel subsidies by 2030. � Reducing methane emissions in oil and gas production.


Figure 3.12, based on EIA assumption, emphasizes this prediction showing a fall in the use of coal and oil for power generation for the period 2013 to 2030 and increases in the use of gas nuclear, hydro and

other renewable energy sources. In fact, the reduc-tion in the use of oil and the increase in the use of gas had already become established as a trend in the period 1990 to 2013.

Figure 3.12: Electricity generation trend by resource – IEA bridge scenario

5,000 4,4251,310

1,760

2,013

2,144

5,187(194)

3,266 4641,578 308 624 35 134 5 2,197

1,5281,885

848

2,242 2091,002 221 16

174

-

10,000

15,000

20,000

25,000

30,000

35,000

CoalOil

Gas

(TWh)

Nuclear

HydroOth

er

1990 total

CoalOil

Gas

Nuclear

Hydro

Bioenergy

Wind

Geotherm

al

Solar PV

CSP

2013 total

CoalOil

Gas

Nuclear

Hydro

BioenergyWind

Geotherm

al

Solar PV

CSP

Marine

2030 total

30,618

23,233

11,826

(2,134)(629)

Gas22%

Coal41%

Oil5%

Nuclear11%

23,233 TWh (2013)

30,618 TWh (2030)

Hydro16%

Other5%

Gas24%

Coal24%

Oil2%

Nuclear13%

Hydro18%

Other19%



Turning to the economic impact of the energy and industrial sectors, Figure 3.13 shows the contribution of industry to GDP for Africa and the Gulf States for 2014. The average contribution of the industrial sec-tor to GDP for both Sub-Saharan Africa and world-wide is less than 30% (27% and 26% respectively). For oil producing and resource rich countries, the percentage tends to be much higher, for instance in DR Congo, Gabon, Algeria and the Gulf States. Ni-geria is an interesting case where the data has been disaggregated for the periods 2000-04 and 2010-14,

illustrating that as the country became less depend-ent on oil, and began to diversify its economy, then it became less dependent on the industrial sector for GDP growth, dropping from a 40% to 26% con-tribution to GDP. This would seem to suggest that as Mozambique becomes an exporter of mineral re-sources, and particularly gas, it risks becoming over-dependent on the industrial sector. However, as the case of Nigeria shows, there is also an opportunity to take steps to promote greater economic diversity and more balanced economic development.

Figure 3.13: Industry, value added (% of GDP) 2014 – Sub-Saharan Africa + Gulf States

Mauritania

Congo Rep.

69 6865 64

5756

46

4039 39

3836

33 32 3229 29 29

28 27 26 2625 24 23 23 22 22 21 20 19

17 17 16 16 15 15 14 1410

29

Qatar

Kuwait

Gabon

Saudi Arabia

Algeria

Nigeria(2000-04 ave)

Egipt

Botswana

Lesoth

o

Tunisia

Marocc

o

GuineaBenin

Ghana

Congo, Dem. R

ep

Namibia

Zimbabwe

Burkina Faso

South Afri

caMali

Sub.Saharan Africa

World (2

013)

Nigeria(2010-14 ave.)

Niger

Tanzania

Senegal

Uganda

Sierra Leone

Kenya

Mozambique

Malawi

Cabo Verde

Madagascar

RwandaChad

Guinea-Bissau

Sao Tome and Prince

pe

Ethiopia

Oman

(Industry, value added % of GDP)

Source: World Bank


Figure 3.15: Fuel price trends and global GDP & Government revenue in oil producing countries

0

50

100

150

200

250

20012000

20022003

20042005

20062007

20082009

20102011

20122013

20142015

Fuel/energy prince index World GDP

Sub-Sahara Africa GDP Mozambique GDP

(index, USD basis 2005=100)

0

50

100

150

200

250

300

350

500

400

450

20012000

20022003

20042005

20062007

20082009

20102011

20122013

20142015

Angola Gov. general revenue Nigeria Gov. generalrevenue

Gabon Gov. general revenue Fuel/energy price index



Finally, in relation to energy demand, Figures 3.16 looks at the relationship between changes in the fuel/energy price index and FDI over the period 2000 to 2014 at a global level, and specifi cally in Nigeria and Mozambique. At the global level, although there is a time lag, there appears to be strong correlation between the variables with no-ticeable drops in FDI following reductions in the

fuel/energy price index. However, for Mozam-bique, reductions in FDI have only noticeably cor-responded to drops in the fuel/energy price in-dex in the last 3 years, with investment growing for most of the period 2000 to 2012 regardless of changes to fuel and energy prices. However, for Nigeria, a bigger and more mature economy, the correlation is more marked.

Figure 3.16: Fuel price trend and global FDI trend & Mozambique and Nigeria FDI trend

-

200

400

600

800

1,000

1,200

1,400

2,000

1,600

1,800

-

50

100

150

250

200

20012000

20022003

20042005

20062007

20082009

20102011

20122013

2014

AfricaAsiaOceania

AmericaEuropaFuel/energy price-right axis

(billion USD) (index, USD basis 2005=100)

-

1

2

3

4

5

6

7

10

8

9

-

50

100

150

250

200

20012000

20022003

20042005

20062007

20082009

20102011

20122013

2014

Mozambique Nigeria Fuel/energy price-right axis


Source: UNCTAD; IMF, World Economic Outlook


Box 3.4: Global Value Chains (GVCs) – opportunities and risks

Global Value Chains (GVCs) represent a systeI which fi nished goods are no longer produced in a single country of a single location. Rather the components of a product are both manufactured and assembled in various locations across the globe. Thus the structure of a country’s production capacity and its economic success is deterI by its ability to become, and stay part of, one or more global value chains. The web of global production is becoming more and more complex and changing rapidly, as the mobility of human resources, capital, goods, information drastically increase.

Economic growth in East Asia, attained by addressing the demand for manufactured goods from advanced coun-tries and integration into GVCs, has encouraged other countries to adopt an export-led approach to development. The Industrial Development Report 2013 (2013) explains that being a part of GVCs, can improve the development of industry in four main ways: � Increases in revenue from trade integration encourage exporters to upgrade technology. � International trade exposes fi rms to forms of competition that they may not face in the domestic market. � Foreign buyers may exert pressure in relation to quality and price forcing fi rms to improve their effi ciency � It can improve access to advanced equipment and research and development facilities.

The Industrial Development Report 2016 (2015) emphasizes that although the exports of African countries are already integrating into GVCs, they tend to be at the lower end of the value chain involving the products of primary production processes (such as minerals and rIaterials) which tend to offer few opportunities for the type of tech-nological innovation that would create greater potential for growth and economic expansion. It also leaves these countries extremely vulnerable to volatility in the world economy, notably commodity prices. Trade openness can create opportunities but excessive dependence on primary industry and low-tech manufacturing may dispropor-tionately expose developing nations to international markets leading to signifi cant variation in government revenue.

Source: UNIDO, Industrial Development Report 2013, 2016

There is a strong correlation between changes in the fuel/energy price index (including crude oil, nat-ural gas and coal prices) and world export values. The export of mineral fuels and oils is the biggest component of world trade, and has had a signifi cant impact on trade trends over the period 2002 to 2014 as highlighted in Figure 3.14.

Changes in the fuel/energy price index also ap-pear to impact on GDP and government reve-

nue. Economic growth in Sub-Saharan Africa, including Mozambique, seems to be more sensi-tive to falls in the fuel/energy price index than is the case for the global economy as a whole. Similarly, Figure 3.15 shows a particularly strong correlation between the fuel/energy price index and government revenue in three resource-rich African countries over the period 2000 to 2014, an important factor for Mozambique to take into consideration.

Figure 3.14: Fuel price trends and world trade (exports) 2002-2014

0

20

40

60

80

100

120

140

160

180

200

20022003

20042005

20062007

20082009

20102011

20122013

2014

Vehicles (excl. railway)

Other

Machinery, nuclear reactorboiler, etcElectrical, ElectronicEquipment

Mineral fuel, oils, etc

Fuel /energy price indx - right axis

2,000

-

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

20,000

(billion USD) (USD, Index 2005=100))

Source: UN Comtrade; IMF, World Economic Outlook


Figure 3.15: Fuel price trends and global GDP & Government revenue in oil producing countries

0

50

100

150

200

250

20012000

20022003

20042005

20062007

20082009

20102011

20122013

20142015

Fuel/energy prince index World GDP

Sub-Sahara Africa GDP Mozambique GDP


0

50

100

150

200

250

300

350

500

400

450

20012000

20022003

20042005

20062007

20082009

20102011

20122013

20142015

Angola Gov. general revenue Nigeria Gov. generalrevenue

Gabon Gov. general revenue Fuel/energy price index



Finally, in relation to energy demand, Figures 3.16 looks at the relationship between changes in the fuel/energy price index and FDI over the period 2000 to 2014 at a global level, and specifi cally in Nigeria and Mozambique. At the global level, although there is a time lag, there appears to be strong correlation between the variables with no-ticeable drops in FDI following reductions in the

fuel/energy price index. However, for Mozam-bique, reductions in FDI have only noticeably cor-responded to drops in the fuel/energy price in-dex in the last 3 years, with investment growing for most of the period 2000 to 2012 regardless of changes to fuel and energy prices. However, for Nigeria, a bigger and more mature economy, the correlation is more marked.

Figure 3.16: Fuel price trend and global FDI trend & Mozambique and Nigeria FDI trend

-

200

400

600

800

1,000

1,200

1,400

2,000

1,600

1,800

-

50

100

150

250

200

20012000

20022003

20042005

20062007

20082009

20102011

20122013

2014

AfricaAsiaOceania

AmericaEuropaFuel/energy price-right axis


-

1

2

3

4

5

6

7

10

8

9

-

50

100

150

250

200

20012000

20022003

20042005

20062007

20082009

20102011

20122013

2014

Mozambique Nigeria Fuel/energy price-right axis


Source: UNCTAD; IMF, World Economic Outlook


Regional integration will be an important means to achieving this through reducing trade barriers and introducing policy reforms that allow large, small and micro enterprises to integrate more effectively into re-gional and global value chains. This will require support from the international community including regional development banks. Moreover, Aid for Trade will need to give special attention to LDCs particularly through the Enhanced Integrated Framework for Trade-Related Technical Assistance.

SDGs

AAAA

AfT IPOA

RomeDeclaration

Figure 3.17: Global development initiatives related to trade agenda

MDG(2000)

Brussel Planof Action

(2001)

MonterryConsensus

(2002)

DohaDeclaration

(2008)

Addis AbabaActon Agenda

(2015)

Istanbul Plainof Action

(2011)

SDGs(2015)

AfT - Hong KongWTO Ministerial

Conference (2005)

Rome Declarationon World FoodSecurity(1996)

Source: OECD/WTO, Aid for Trade at a Glance 2015


3.4 SDGs and Trade

In 2015, United Nations member states unanimous-ly agreed on a set of Sustainable Development Goals (SDGs) with the aim of ending poverty by 2030. The SDGs are a set of 17 aspirational goals with 169 specifi c development targets. The 2030 agenda is the foundation on which efforts to secure sustainable and inclusive development will be built over the next 15 years and in September 2015 the Government of Mozambique committed itself to im-plementing the 2030 Agenda and working towards the achievement of the SDGs.

Trade, and the government revenue derived from it, will make an important contribution to fi nancing the implementation of the SDGs and will have a positive impact on socio-economic development if it can be effectively harnessed. A number of the SDGs have direct linkages to trade, for example:

� Goal 2: End hunger, achieve food security and improved nutrition and promote sustainable ag-riculture

Target 2.b: Correct and prevent trade restric-tions and distortion in world agricultural mar-kets, including by the parallel elimination of all forms of agricultural export subsidies and

all export measures with equivalent effect, in accordance with the mandate of the Doha Development Round

� Goal 8: Promote sustained, inclusive and sus-tainable economic growth, full and productive employment and decent work for all

Target 8.a: Increase aid-for-trade support for developing countries, particularly LDCs, including through the Enhanced Integrated Framework for LDCs

� Goal 10: Reduce inequality within and among countries

Target 10.b: Implement the principle of special and differential treatment (SDT) of developing countries, in particular least developed coun-tries, in accordance with WTO agreement

� Goal 17 Strengthen the means of implementation and revitalize the global partnership for sustain-able development

Target 17.11: Signifi cantly increase the ex-ports of developing countries, in particular with a view to doubling the LDC share of global exports by 2020

Box 3.5: Trade and Development Agenda

Trade is a key factor in economic development and can improve the access of developing countries to essential goods and services by further reducing their costs and trade defi cits. It is widely agreed that trade, development, and poverty reduction are intrinsically linked. Sustained growth is strongly associated with poverty reduction, and trade and growth are strongly linked.

Trade is an important source of both fi nancial and non-fi nancial means for development. International trade is an important source of revenue and capital investment that is essential for structural transformation. The 2030 develop-ment agenda requires signifi cant increases in development fi nance and international trade could play an important contributory role, particularly for LDCs.

Trade policy should not only promote trade, but use improvements in trade to promote more inclusive and sustain-able development. The Aid-for-Trade Initiative helps countries improve policy coherence in relation to trade and economic development whilst adhering to wider social and environmental development objectives

The Rome Declaration (1996) considers trade to be a key element in achieving world food security through enabling food consumption to exceed food production and helping to overcome variations in production and consumption.

The Addis Ababa Action Agenda (2015) notes the importance of trade fi nance for maximizing a country’s trading po-tential through allowing it to seize opportunities to use trade as an engine for development. The Agenda advocates for a signifi cant increase world trade, seeking to double the share of global exports of LDCs by 2020, but in a way which is consistent with the attainment of the sustainable development goals.


Regional integration will be an important means to achieving this through reducing trade barriers and introducing policy reforms that allow large, small and micro enterprises to integrate more effectively into re-gional and global value chains. This will require support from the international community including regional development banks. Moreover, Aid for Trade will need to give special attention to LDCs particularly through the Enhanced Integrated Framework for Trade-Related Technical Assistance.

SDGs

AAAA

AfT IPOA

RomeDeclaration

Figure 3.17: Global development initiatives related to trade agenda

MDG(2000)

Brussel Planof Action

(2001)

MonterryConsensus

(2002)

DohaDeclaration

(2008)

Addis AbabaActon Agenda

(2015)

Istanbul Plainof Action

(2011)

SDGs(2015)

AfT - Hong KongWTO Ministerial

Conference (2005)

Rome Declarationon World FoodSecurity(1996)

Source: OECD/WTO, Aid for Trade at a Glance 2015


Figure 4.1: Organigram – Ministry of Industry and Commerce

MinistroVice Ministro

Secretaria Permanente

IPEX Instituto para a Promoção de Exportações

ICM Instituto de Cereais de Moçambique

IPI Instituto da Propriedade Industrial

INNOQ Instituto Nacional de Normalização e Qualidade

IPEME Instituto Promoção das Pequenas e Medias Empresas

INAE Inspecção Nacional das Actividades Económicas

BMM Bolsa de Mercadorias de Moçambique

Gabinete do Ministro

Gabinete Jurídico

Inspeção da Industria e Comercio

Conselho Coordenador(uma vez por ano)

Conselho Consultivo(bimensalmente)

Conselho Técnico(semanal)

DNI

Direcção Nacional da

Industria

DNCI

Direcção Nacional do

Comercio Interno

DNCE


Comercio Externo

DASP

Dirceção Nacional da

Apoio ao Desenvolvi-mento do

Sector Privado

DPE

Direcção do Plani�cação

e Estudos

DTIC

Departa-mento de

Tecnologias de

Informação e Comuni-

cação

DAF

Departa-mento de Adminis-tração e Finanças

DRH

Departa-mento de Recursos Humanos

DA

Departa-mento de

Aquisições

DCI

Departa-mento de Comuni-cação e Imagem

BAU Balcões de Atendimento Único

Instituição Subordinadas/Tuteladas

Colectivos de MIC

Box 4.1: Functions attributed to the Ministry of Industry and Commerce � Preparation of proposals and monitoring the implementation of policies and industrial development

strategies;

� Promotion of a legal and institutional framework for the development of the sector;

� Promotion of services relating to standards and quality;

� Protection of industrial property rights and combating unfair competition;

� Streamlining the inspection and supervision of economic activities;

� Promote measures that protect consumer rights;

� Coordinate with other government agencies to ensure competition;

� Inter-sectoral coordination for private sector development;

� Promotion of industrialization and the modernize the economy;

� Promotion of industrial production, agro-processing and industrial competitiveness;

� Promote cooperation with a view to mobilizing technical assistance and sector programs;

� Promote the development of infrastructure for agricultural marketing and to support industrial activity;

� Development and promotion of exports;

� Promote the development of products with added value and local content;

� Promotion of industrial research and development; and

� Promote the participation of the private sector in industrial development, trade and services.


Policy and Institutional Framework for Trade in Mozambique

C h a p t e r IV

revised in April 2016 and attribute 16 functions to the Ministry (Box 4.1).

To operationalize these functions, MIC has defi ned four key policy areas

1. Industry

2. Internal commerce

3. External commerce

4. Support to the Private Sector

and these are refl ected in the organizational struc-ture of the Ministry that was redefi ned in its Statute. There are also a number of specialized institutions that perform specifi c functions in in the context of the mandate of the MIC and fall under the Ministry’s supervision (Fig. 4.1).

4.1 Policy and Institutional Framework in the Trade Sector

Trade is a cross-cutting issue which impacts nearly every sector and which therefore requires a holis-tic and integrated approach to ensure effective and effi cient policy measures. Moreover, given that the private sector is the key player in the trade sector, the role of government in terms of promoting and facilitating the role of the private sector in economic development and improving the business environ-ment is critical to the growth of both domestic and international trade.

The Ministry of Industry and Commerce (MIC) is the key institution with the mandate to promote trade, improve competitiveness and coordinate this cross-cutting issue across various sectors and institutions in order to maximize efforts to improve trade. The statute setting out the competencies of MIC were


Figure 4.1: Organigram – Ministry of Industry and Commerce

MinistroVice Ministro

Secretaria Permanente

IPEX Instituto para a Promoção de Exportações

ICM Instituto de Cereais de Moçambique

IPI Instituto da Propriedade Industrial

INNOQ Instituto Nacional de Normalização e Qualidade

IPEME Instituto Promoção das Pequenas e Medias Empresas

INAE Inspecção Nacional das Actividades Económicas

BMM Bolsa de Mercadorias de Moçambique

Gabinete do Ministro

Gabinete Jurídico

Inspeção da Industria e Comercio

Conselho Coordenador(uma vez por ano)

Conselho Consultivo(bimensalmente)

Conselho Técnico(semanal)

DNI

Direcção Nacional da

Industria

DNCI


Comercio Interno

DNCE


Comercio Externo

DASP

Dirceção Nacional da

Apoio ao Desenvolvi-mento do

Sector Privado

DPE

Direcção do Plani�cação

e Estudos

DTIC

Departa-mento de

Tecnologias de

Informação e Comuni-

cação

DAF

Departa-mento de Adminis-tração e Finanças

DRH

Departa-mento de Recursos Humanos

DA

Departa-mento de

Aquisições

DCI

Departa-mento de Comuni-cação e Imagem

BAU Balcões de Atendimento Único

Instituição Subordinadas/Tuteladas

Colectivos de MIC

Box 4.1: Functions attributed to the Ministry of Industry and Commerce � Preparation of proposals and monitoring the implementation of policies and industrial development

strategies;

� Promotion of a legal and institutional framework for the development of the sector;

� Promotion of services relating to standards and quality;

� Protection of industrial property rights and combating unfair competition;

� Streamlining the inspection and supervision of economic activities;

� Promote measures that protect consumer rights;

� Coordinate with other government agencies to ensure competition;

� Inter-sectoral coordination for private sector development;

� Promotion of industrialization and the modernize the economy;

� Promotion of industrial production, agro-processing and industrial competitiveness;

� Promote cooperation with a view to mobilizing technical assistance and sector programs;

� Promote the development of infrastructure for agricultural marketing and to support industrial activity;

� Development and promotion of exports;

� Promote the development of products with added value and local content;

� Promotion of industrial research and development; and

� Promote the participation of the private sector in industrial development, trade and services.


Given the multi-sectoral and cross-cutting nature of trade promotion in a global economy, it is of the ut-most importance that in exercising its functions, MIC coordinates and collaborates with other Ministries and participates in the formulation and implementa-tion of policy and strategies that are relevant for its remit. For instance, policy coordination is important with the of Agriculture and Food Security (MASA)

in relation to the implementation of the Strategic Plan for the Development of the Agricultural Sector 2010-2019; with the Ministry of the Sea, Inland Water and Fishery (MMAIP) regarding the National Programme for the Development of Fishing 2010-2019; and with Ministry of the Economy and Finance (MEF) related to the Integrated Investment Programme for strate-gic infrastructure development.

Figure 4.2: Policy and strategic framework – Ministry of Industry and Commerce

PES 2016

Politica e estratégia comercial 1998

Estudo Diagnostico para Integração do Comercio (EDIC) 2014

Politica e estratégia industrial 2016

Estratégia para a Melhoria do Ambiente de Negócios em

Moçambique (EMAN 2) 2013-2017

Programa Integrado de Comerciali-zação Agrícola (PICA)

Lei do Sistema Nacional de Qualidade

Estrategia para o Desenvolvimento das Pequenas e Medias Empresas

em Mocambique 2007

MASA - PEDSA, PNISA, etc.MMAIP - PDP, PESPA, etc.

MEF - PII, etc.

Politica e Estratégias ligado nos outros sectores (e.g. MASA, MMAIP, MEF)

Politica e Estratégias ligado ao missão de MIC

PQG 2015-2019

Estratégia Nacional de Desenvolvimento 2015-2035 (ENDE)

(National Level)

(Other Ministry)

(MIC)

Box 4.2: Trade related issues coordination mechanism – Aid for Trade and EIF in Mozambique

The Enhanced Integrated Framework (EIF) is the only global initiative on Aid for Trade (AfT) for Least Developed Countries. Mozambique became eligible for support under the Integrated Framework (IF) in 2004 and later by the EIF in 2010. Support is given under Tier 1 and Tier 2 projects. Current support is for Tier 1 projects which include an update of the Diagnostic of Trade Integration Study (DTIS), capacity building for trade-related institutions, and trade mainstreaming actions such as workshops and studies. Tier 2 projects are based on the priorities defi ned in the DTIS Action Matrix fi nalized in 2014. The EIF is also providing technical assistance to national stakeholders to identify, select, prioritize, and draft small-scale business development projects and mobilize fi nancial resources.

One of the key challenges faced by Mozambique in the area of trade policy in general, and AfT in particular, is the weakness of coordination mechanisms at institutional and policy levels. There is no single body responsible for the coordination of trade issues and mechanisms tend to be established on an ad hoc basis to address specifi c issues.


The policy measures of MIC in relation to trade de-velopment is guided by several strategic documents such as “Politica e estrategia commercial 1998,” “Es-trategia para a melhoria do ambiente de negocias em Moçambique 2013-2017,” “Politica e estrategia industrial 2016”, and “Programa de integração de comercialização agricola” (Fig. 4.2). National and in-ter-ministerial strategy in realtion to trade is defi ned in the National Development Strategy 2015-35 (ENDE) and the Government’s Five Year Plan (PQG) for the period 2015-2019. The ENDE articulates the path to industrialization in Mozambique linking various sec-tors, including education and health with the objec-tive of promoting economic development through diversifi cation with a focus on four priority sectors: agriculture and fi sheries’ transformative industry, mineral extractive industry, and tourism.

The PQG sets out the Government’s priorities and de-velopment objectives for the period 2015-19 and was approved by Parliament in April 2015. The central ob-jective of the programme is to improve the living condi-tions of the Mozambican people by increasing employ-ment, production and competitiveness, creating wealth and generating balanced and inclusive development, in an environment of peace, security, harmony, solidar-ity, justice and cohesion among Mozambicans.

The Programme establishes fi ve key development priorities:

� Priority I: Consolidating national unity, peace and sovereignty

� Priority II: Developing human and social capital

� Priority III: Promoting employment, productivity and competitiveness

� Priority IV: Developing economic and social in-frastructure

� Priority IV: Ensuring sustainable and transparent management of natural resources and the envi-ronment

The Programme adopts a holistic approach and establishes an integrated programme which seeks to improve the country’s competitiveness and pro-ductivity, transform agriculture and modernize and industrialise the economy with a focus on increasing exports. The PQG is operationalized by the Plano Economic Social (PES), an annual plan of actions implemented by the Ministries, funded though both internal and external sources, and approved by par-liament.

The competencies attributed to MIC are directly linked to the priorities, pillars and strategic objec-tives, of the PQG, such as:

� Priority II: Reduction of malnutrition through the improving the supply of fortifi ed foods

� Priority III: Promotion of Industrialization, market-ing, exports, and training of local producers

� Priority V: Construction of silo complex

Moreover, MIC is the key Ministry responsible for the achievement of a number of strategic objectives related to Priority III in the PQG, for which the key strategic objective are as follows:

Priority III: Promote Employment and Improve Productivity and Competitiveness

Strategic Objective (i) Strategic Objective (ii) Strategic Objective (iv)

Increase production and productivity in all sectors with emphasis on agri-culture.

� Increase production and pro-ductivity in staple food crops to achieve food self-suffi ciency.

� Promote agricultural marketing in the domestic and foreign markets, with a focus cereals and giving preference to those involved in storage networks and agro pro-cessing, to improve the balance of payments.

Promote industrialization and the modernisation of the economy and increase exports.

� Promote exports to allow traders to take advantage of market oppor-tunities created by the multilateral trading system.

� Diversify the base and export des-tinations.

� Implement SADC to consolidate the Free Trade Zone.

� Encourage the development of manufacturing to increase added value in order to reduce trade im-balances.

Promote the value chain of primary products ensuring the integration of local content.

� Strengthen the integration and growth of national industries in the value chains of mega-projects with a focus on small and medium-sized Mozambican companies.

� Support the establishment of in-dustrial parks, aqua culture and special economic zones and other facilities to support the develop-ment of the productive sector.

� Promote the incubation of technol-ogy companies and competition in business ideas for the development of new products and services.


Given the multi-sectoral and cross-cutting nature of trade promotion in a global economy, it is of the ut-most importance that in exercising its functions, MIC coordinates and collaborates with other Ministries and participates in the formulation and implementa-tion of policy and strategies that are relevant for its remit. For instance, policy coordination is important with the of Agriculture and Food Security (MASA)

in relation to the implementation of the Strategic Plan for the Development of the Agricultural Sector 2010-2019; with the Ministry of the Sea, Inland Water and Fishery (MMAIP) regarding the National Programme for the Development of Fishing 2010-2019; and with Ministry of the Economy and Finance (MEF) related to the Integrated Investment Programme for strate-gic infrastructure development.

Figure 4.2: Policy and strategic framework – Ministry of Industry and Commerce

PES 2016

Politica e estratégia comercial 1998

Estudo Diagnostico para Integração do Comercio (EDIC) 2014

Politica e estratégia industrial 2016

Estratégia para a Melhoria do Ambiente de Negócios em

Moçambique (EMAN 2) 2013-2017

Programa Integrado de Comerciali-zação Agrícola (PICA)

Lei do Sistema Nacional de Qualidade

Estrategia para o Desenvolvimento das Pequenas e Medias Empresas

em Mocambique 2007

MASA - PEDSA, PNISA, etc.MMAIP - PDP, PESPA, etc.

MEF - PII, etc.

Politica e Estratégias ligado nos outros sectores (e.g. MASA, MMAIP, MEF)

Politica e Estratégias ligado ao missão de MIC

PQG 2015-2019

Estratégia Nacional de Desenvolvimento 2015-2035 (ENDE)

(National Level)

(Other Ministry)

(MIC)

Box 4.2: Trade related issues coordination mechanism – Aid for Trade and EIF in Mozambique

The Enhanced Integrated Framework (EIF) is the only global initiative on Aid for Trade (AfT) for Least Developed Countries. Mozambique became eligible for support under the Integrated Framework (IF) in 2004 and later by the EIF in 2010. Support is given under Tier 1 and Tier 2 projects. Current support is for Tier 1 projects which include an update of the Diagnostic of Trade Integration Study (DTIS), capacity building for trade-related institutions, and trade mainstreaming actions such as workshops and studies. Tier 2 projects are based on the priorities defi ned in the DTIS Action Matrix fi nalized in 2014. The EIF is also providing technical assistance to national stakeholders to identify, select, prioritize, and draft small-scale business development projects and mobilize fi nancial resources.

One of the key challenges faced by Mozambique in the area of trade policy in general, and AfT in particular, is the weakness of coordination mechanisms at institutional and policy levels. There is no single body responsible for the coordination of trade issues and mechanisms tend to be established on an ad hoc basis to address specifi c issues.


also the tripartite SADC-EAC-COMESA which is currently being negotiated

� Unilateral initiatives: This mainly refers to the Preferential Trade Agreements (PTA) provided to LDCs, including the African Growth and Oppor-tunity Act (AGOA). (Table 4.1)

� Multilateral Agreements: this refers to the trade negotiations among WTO member countries. The Doha Round is the current trade negotia-tion round launched in 2001, also known as Doha Development Agenda as it focusses on trade prospects of developing countries. In 2013, WTO members concluded negations

Trade tariff are a key measure in international trade to promote trade and also nurture domestic indus-try and business. In 2014, the applied tariff for agri-cultural products was 13.8%, while the bound tariff

on a Trade Facilitation Agreement (Bali Min-isterial Declaration adopted on December 2013) which will enter into once two-thirds of WTO members have completed the ratifica-tion process. In Mozambique the ratification process is on-going (as of July 2016). Mo-zambique participates in several negotiations in the Doha round as a group of ACP (African, Caribbean and Pacific countries with prefer-ences in the EU), the African Group (African members of the WTO), LDCs, G-33 (Coalition of developing country pressing for flexibility to undertake limited market opening in agri-culture).

Table 4.1: Preferential Trade Agreements - Mozambique

Country TypeYear of Entry into

ForcePTA sub-schemes

EU GSP 1971 GSP+, Everything but Arms (LDCs)

Japan GSP 1971 LDCs

Norway GSP 1971 GSP zero, GSP plus

Switzerland GSP 1972 LDSs and countries undergoing debt relief

Australia GSP 1974 LDCs

New Zealand GSP 1972 LDCs

Canada GSP 1974 LDCs

USA GSP 1979 LDCs

USA Other PTAs 2000 Textile and apparel benefi ts

Morocco LDC-specifi c 2001

Turkey GSP 2002 LDSs, Special incentive arrangement

Iceland GSP 2002

Chinese Taipei LDC-specifi c 2003

Tajikistan LDC-specifi c 2003

Kyrgyz LDC-specifi c 2006

India LDC-specifi c 2008

China LDC-specifi c 2010

Russia GSP 2010 LDCs

Kazakhstan GSP 2010 LDCs

Belarus GSP 2010 LDCs

Chile LDC-specifi c 2014

Thailand LDC-specifi c 2015Source: WTO

was set at 100%. On non-agriculture products, the applied tariff was 9.5%, while the bound tariff was 22.8%. Figure 4.3 shows the tariff applied to prod-ucts imported in Mozambique in 2014.


Two examples are worth noting. The EIF National Steering Committee was set up to monitor the implementation of the EIF at national level. It meets on a quarterly under the chairmanship of the Director of External Trade (MIC) its members comprise representatives from the public and private sectors, civil society, academia and development partners. Despite the importance of the issues addressed by the EIF the level of engagement by stakeholders needs to improve. The establishment of the National Committee on Trade Facilitation was a recommendation of the 2013 WTO’s Trade Facilitation Agreement and is expected to be set up as a sub-group Inter-Ministerial Group for the Removal of Trade Barriers (GIRBI - Grupo Inter-Ministerial de Remoção de Barreiras ao Investimento) which meets quarterly under the chairmanship of the MIC at technical level, and the Prime Minister at political level. These examples show how that whilst mechanisms are structured in a manner to produce results, at the same time they pose challenges for the coordination of efforts at a national level.

At the policy level coordination is also essential. On the one hand, policy instruments such as the African Union’s Comprehensive African Agriculture Development Program (CAADP), PQG 2015-2019 and the National Strategic Plan for the Development of the Agricultural Sector (PEDSA) stress the importance of the need to increase produc-tion, productivity, jobs and income from agricultural products. On the other hand, the government needs to ensure that the operationalization of these policies and strategies are effectively aligned with MIC’s policy instruments including the Industrial Policy and Strategy 2015-2025, the Trade Policy and Strategy, and DTIS 2014 to better facilitate integration of the domestic economy with regional and global value chains.

EIF Coordination Mechanism - Inter-institutional committee

Private Sector (CTA,

etc.)

MASA

MMAIP

MEF

MINEC

MITESSMITADER

MTC

MCT

MIREME

MIC

Multilateral Cooperation

(WTO, UN, IFI, etc.)

Academia/ Think-tank (UEM, ACIS, CEMO, etc.)

Civil Society, Media

Bilateral Cooperation

4.2 International Trade Agreements

There are a number of international trade agreements in force in Mozambique which provide the framework for the promotion of bilateral and multi-lateral trade. International trade agreements, to which Mozam-bique is a party, can be grouped in to four types:

� Bilateral Agreements: Agreements with Zimba-bwe (2004) and Malawi (2006)

� Regional Agreements: These include the SADC Free Trade Zone, the SADC-EU Economic Part-nership Agreements (signed in June 2016), and


also the tripartite SADC-EAC-COMESA which is currently being negotiated

� Unilateral initiatives: This mainly refers to the Preferential Trade Agreements (PTA) provided to LDCs, including the African Growth and Oppor-tunity Act (AGOA). (Table 4.1)

� Multilateral Agreements: this refers to the trade negotiations among WTO member countries. The Doha Round is the current trade negotia-tion round launched in 2001, also known as Doha Development Agenda as it focusses on trade prospects of developing countries. In 2013, WTO members concluded negations

Trade tariff are a key measure in international trade to promote trade and also nurture domestic indus-try and business. In 2014, the applied tariff for agri-cultural products was 13.8%, while the bound tariff

on a Trade Facilitation Agreement (Bali Min-isterial Declaration adopted on December 2013) which will enter into once two-thirds of WTO members have completed the ratifica-tion process. In Mozambique the ratification process is on-going (as of July 2016). Mo-zambique participates in several negotiations in the Doha round as a group of ACP (African, Caribbean and Pacific countries with prefer-ences in the EU), the African Group (African members of the WTO), LDCs, G-33 (Coalition of developing country pressing for flexibility to undertake limited market opening in agri-culture).

Table 4.1: Preferential Trade Agreements - Mozambique

Country TypeYear of Entry into

ForcePTA sub-schemes

EU GSP 1971 GSP+, Everything but Arms (LDCs)

Japan GSP 1971 LDCs

Norway GSP 1971 GSP zero, GSP plus

Switzerland GSP 1972 LDSs and countries undergoing debt relief

Australia GSP 1974 LDCs

New Zealand GSP 1972 LDCs

Canada GSP 1974 LDCs

USA GSP 1979 LDCs

USA Other PTAs 2000 Textile and apparel benefi ts

Morocco LDC-specifi c 2001

Turkey GSP 2002 LDSs, Special incentive arrangement

Iceland GSP 2002

Chinese Taipei LDC-specifi c 2003

Tajikistan LDC-specifi c 2003

Kyrgyz LDC-specifi c 2006

India LDC-specifi c 2008

China LDC-specifi c 2010

Russia GSP 2010 LDCs

Kazakhstan GSP 2010 LDCs

Belarus GSP 2010 LDCs

Chile LDC-specifi c 2014

Thailand LDC-specifi c 2015Source: WTO

was set at 100%. On non-agriculture products, the applied tariff was 9.5%, while the bound tariff was 22.8%. Figure 4.3 shows the tariff applied to prod-ucts imported in Mozambique in 2014.


Table 4.3: Doing Business 2016 (comparison w/selected countries in Sub-Saharan Africa)

Glo

bal R

ank

(out

of 1

89)

Sta

rtin

g a

Bus

ines

s

Dea

ling

with

C

onst

ruct

ion

Per

mits

Get

ting

Ele

ctric

ity

Reg

iste

ring

Pro

pert

y

Get

ting

Cre

dit

Pro

tect

ing

Min

ority

In

vest

ors

Pay

ing

Taxe

s

Trad

ing

Acr

oss

Bor

ders

Enf

orci

ng C

ontr

acts

Res

olvi

ng In

solv

ency

Mauritius 32 3 2 1 9 4 3 1 4 1 1

Rwanda 62 14 3 8 1 1 9 5 28 20 6

Botswana 72 28 11 10 3 10 7 6 3 21 3

South Africa 73 17 10 31 11 7 1 2 21 16 2

Seychelles 95 22 20 16 2 13 15 3 7 23 4

Zambia 97 8 14 11 32 2 9 4 26 22 15

Namibia 101 35 5 2 41 7 4 9 15 10 11

Swaziland 105 32 8 25 15 10 22 8 1 41 10

Kenya 108 31 28 12 17 3 17 11 22 9 29

Ghana 114 13 23 9 5 4 4 15 36 14 36

Lesotho 114 15 38 20 13 33 12 16 2 8 22

Uganda 122 36 33 30 18 4 12 14 19 6 14

Cabo Verde 126 7 12 17 4 13 37 10 11 2 39

Mozambique 133 18 1 28 12 33 12 20 20 46 5

Tanzania 139 21 21 3 22 33 20 26 40 3 12

Malawi 141 33 4 35 7 33 17 12 16 28 37

Zimbabwe 155 43 46 27 16 12 7 24 8 38 33

Angola 181 27 13 29 38 45 4 23 41 47 39Source: World Bank, Doing Business 2016

4.3 Business Environment in Mozambique

Doing Business

“Doing Business”, annually produced by World Bank Group since 2003, measures 10 aspects of a country’s legal and regulatory framework to compare the ease of doing business in global context. According to Doing Business 2016, Mo-zambique was positioned in 133rd place in the index of a total of 189 countries. Table 4.3 shows a comparison of the rankings of Sub-Saharan Af-rican countries and highlights that Mozambique

performs relatively well in relation to dealing with construction permits, resolving insolvency, pro-tecting minority investors and registering proper-ty, while under-performing in the area of connect-ing to electricity, accessing credit and enforcing contracts. It is worthwhile to note that Rwanda records excellent performance in terms of getting credit which position the country 2nd rank among Sub-Saharan African countries.


Figure 4.3: Average MFN applied duties 2014 – Mozambique

0

ClothingFish & �sh products

Animal productsBeverages & tobacco

Co�ee, teaFruit, vegetables, plants

Dairy productsTextiles

Cereals & preparationsLeather, footwear, etc.

Wood, paper, etc.Oilseeds, fat & oils

Sugars and confectioneryElectrical machinery

Transport equipamentMinerals & metals

Non-electrical machineryPetroleumChemicals

Cotton

2 4 6 8 10 12 14 16 18 20

Source: WTO

Trade agreements and investment agreements are inseparable legal frameworks in global economic sys-tem, as both promote fl ows of goods, fi nancial means,

and human resources between two or more countries. Table 4.2 shows the bilateral investment agreements in force in Mozambique and/or signed bilaterally.

Table 4.2: Bilateral investment agreements – Mozambique Country Year of Signature Year of Entry into Force

Zimbabwe 1990

Portugal 1996 1998Mauritius 1997 2003South Africa 1997 1998Algeria 1998 2000Egypt 1998Italy 1998 2003United States of America 1998 2005Indonesia 1999 2000China 2001 2002Cuba 2001 2002Netherlands 2001 2004Sweden 2001 2007Denmark 2002 2002France 2002 2006Germany 2002 2007Switzerland 2002 2004United Arab Emirates 2003Finland 2004 2005United Kingdom 2004 2004United States of America (TIFA) 2005 2005BLEU (Belgium-Luxembourg Economic Union)

2006 2009

Viet Nam 2007 2007India 2009 2009Spain 2010Japan 2013 2014Brazil 2015Singapore 2016

Source: UNCTAD


Table 4.3: Doing Business 2016 (comparison w/selected countries in Sub-Saharan Africa)

Glo

bal R

ank

(out

of 1

89)

Sta

rtin

g a

Bus

ines

s

Dea

ling

with

C

onst

ruct

ion

Per

mits

Get

ting

Ele

ctric

ity

Reg

iste

ring

Pro

pert

y

Get

ting

Cre

dit

Pro

tect

ing

Min

ority

In

vest

ors

Pay

ing

Taxe

s

Trad

ing

Acr

oss

Bor

ders

Enf

orci

ng C

ontr

acts

Res

olvi

ng In

solv

ency

Mauritius 32 3 2 1 9 4 3 1 4 1 1

Rwanda 62 14 3 8 1 1 9 5 28 20 6

Botswana 72 28 11 10 3 10 7 6 3 21 3

South Africa 73 17 10 31 11 7 1 2 21 16 2

Seychelles 95 22 20 16 2 13 15 3 7 23 4

Zambia 97 8 14 11 32 2 9 4 26 22 15

Namibia 101 35 5 2 41 7 4 9 15 10 11

Swaziland 105 32 8 25 15 10 22 8 1 41 10

Kenya 108 31 28 12 17 3 17 11 22 9 29

Ghana 114 13 23 9 5 4 4 15 36 14 36

Lesotho 114 15 38 20 13 33 12 16 2 8 22

Uganda 122 36 33 30 18 4 12 14 19 6 14

Cabo Verde 126 7 12 17 4 13 37 10 11 2 39

Mozambique 133 18 1 28 12 33 12 20 20 46 5

Tanzania 139 21 21 3 22 33 20 26 40 3 12

Malawi 141 33 4 35 7 33 17 12 16 28 37

Zimbabwe 155 43 46 27 16 12 7 24 8 38 33

Angola 181 27 13 29 38 45 4 23 41 47 39Source: World Bank, Doing Business 2016

4.3 Business Environment in Mozambique

Doing Business

“Doing Business”, annually produced by World Bank Group since 2003, measures 10 aspects of a country’s legal and regulatory framework to compare the ease of doing business in global context. According to Doing Business 2016, Mo-zambique was positioned in 133rd place in the index of a total of 189 countries. Table 4.3 shows a comparison of the rankings of Sub-Saharan Af-rican countries and highlights that Mozambique

performs relatively well in relation to dealing with construction permits, resolving insolvency, pro-tecting minority investors and registering proper-ty, while under-performing in the area of connect-ing to electricity, accessing credit and enforcing contracts. It is worthwhile to note that Rwanda records excellent performance in terms of getting credit which position the country 2nd rank among Sub-Saharan African countries.


Box 4.3: Logistics Performance Index (LPI)

The Logistics Performance Index has been prepared annually by the World Bank since 2010 and it represents an in-teractive benchmarking tool created to help countries identify the challenges and opportunities they face in their per-formance on trade logistics and what they can do to improve their performance. The LPI 2016 allows for comparisons across 160 countries. Mozambique scores relatively well at 9th position in the index for the Southern African region and in 88th place globally and performs well on international shipments and tracking and tracing of goods. Overall Mozambique’s performance in the index has improved since 2010 particularly in relation to timeliness of shipping, customs and tracking and tracing which probably refl ects works undertaken to upgrade the port of Nacala.

Figure 4.4: LPI – Mozambique 2010 vs 2016

Customs

Infrastructure

InternationalShipments

Logistics quality

Mozambique 2016 Mozambique 2010

Timeliness ofshipmant

Tracking and tracing

5

4

3

2

1

0

� Customs: The effi ciency of customs and border management clearance.

� Infrastructure: The quality of trade and transport infrastructure.

� International shipments: The ease of arranging competitively priced shipments.

� Logistics quali ty and competence: The compe-tence and quality of logistics services—truck-ing, forwarding, and customs brokerage.

� Tracking and tracing: The ability to track and trace consignments.

� Timeliness of shipment: The frequency with which shipments reach consignees within scheduled or expected delivery times

Table 4.5: LPI 2016 Sub-Saharan Africa ranking (comparison w/selected countries)

LPI O

vera

ll R

ank

Cus

tom

s

Infr

astr

uctu

re

Inte

rnat

iona

l S

hipm

ents

Logi

stic

s qu

ality

an

d co

mpe

tenc

e

Trac

king

and

tr

acin

g

Tim

elin

ess

of

ship

men

t

Regional GlobalSouth Africa 1 20 18 21 23 22 17 24Kenya 2 42 39 42 46 40 38 46Botswana 3 57 48 54 70 75 70 43Uganda 4 58 51 67 74 57 59 45Tanzania 5 61 60 60 63 58 60 64Rwanda 6 62 52 76 59 63 58 69Namibia 7 79 73 64 86 86 100 85Burkina Faso 8 81 84 71 83 71 103 88Mozambique 9 84 88 116 58 109 79 97Ghana 10 88 93 86 85 98 101 82Nigeria 11 90 92 96 118 74 82 95Togo 12 92 89 117 93 106 91 76Côte d’Ivoire 13 95 70 89 105 87 89 128

Source: World Bank, Connecting to Compete Trade Logistics in the Global Economy 2016


Table 4.4: GCI 2015-2016 global ranking (comparison w/selected countries in Sub-Saharan Africa)

Glo

bal r

ank

(out

of 1

40)

Inst

itutio

ns

Infr

astr

uctu

re

Mac

roec

onom

ic

envi

ronm

ent

Hea

lth a

nd p

rimar

y ed

ucat

ion

Hig

her

educ

atio

n an

d tr

aini

ng

Goo

ds m

arke

t effi

cien

cy

Labo

r m

arke

t effi

cien

cy

Fin

anci

al m

arke

t de

velo

pmen

t

Tech

nolo

gica

l rea

dine

ss

Mar

ket s

ize

Bus

ines

s so

phis

ticat

ion

Inno

vatio

n

Mauritius 46 34 37 73 42 52 25 57 34 65 119 34 78

South Africa 49 38 68 85 126 83 38 107 12 50 29 33 38

Rwanda 58 17 97 92 88 120 44 8 28 103 126 69 46

Botswana 71 37 96 9 119 100 95 39 63 91 105 111 102

Namibia 85 44 66 71 116 109 85 49 50 87 114 77 74

Cote d’Ivoire 91 62 85 74 129 108 75 69 60 102 81 93 53

Zambia 96 46 120 83 122 78 53 87 62 108 89 85 52

Seychelles 97 61 47 61 64 92 65 43 106 71 140 62 87

Kenya 99 91 99 123 114 98 84 31 42 94 71 48 41

Gabon 103 78 110 18 111 125 124 71 97 112 110 129 129

Cape Verde 112 66 94 124 51 81 99 125 111 77 138 106 100

Lesotho 113 45 113 44 130 116 88 75 127 123 133 105 70

Tanzania 120 96 127 84 124 135 121 46 101 131 72 114 105

Zimbabwe 125 112 129 104 106 117 131 134 124 118 115 130 128

Swaziland 128 74 104 93 135 118 111 101 82 125 132 123 124

Madagascar 130 129 138 101 123 131 119 42 133 129 106 119 106

Mozambique 133 126 126 122 133 136 112 98 126 124 101 120 83

Malawi 135 92 135 140 121 133 117 29 100 133 127 121 121Source: World Economic Forum, The Global Competitiveness Report 2015-2016

WEF Global Competitiveness Index

The Global Competitiveness Index, initiated by the World Economic Forum in 2004, assesses a country’s performance in relation to a set of institutions, poli-cies, and factors that determine current and medium-term economic prosperity. The index integrates both macroeconomic and micro business aspects of com-petitiveness into a single index made up of over 110 variables, of which two thirds come from the Execu-tive Opinion Survey, and one third comes from pub-

licly available sources such as the United Nations. According to its 2015-2016 edition, Mozambique oc-cupies 133rd place of a total of 140 countries. Table 4.4 shows a comparison of the rankings of Sub-Sa-haran African countries, in which Mozambique per-forms relatively well in relation to labour market effi -ciency and innovation, whilst there is a more negative perception regarding infrastructure, fi nancial market development and the health and education sector.


Box 4.3: Logistics Performance Index (LPI)

The Logistics Performance Index has been prepared annually by the World Bank since 2010 and it represents an in-teractive benchmarking tool created to help countries identify the challenges and opportunities they face in their per-formance on trade logistics and what they can do to improve their performance. The LPI 2016 allows for comparisons across 160 countries. Mozambique scores relatively well at 9th position in the index for the Southern African region and in 88th place globally and performs well on international shipments and tracking and tracing of goods. Overall Mozambique’s performance in the index has improved since 2010 particularly in relation to timeliness of shipping, customs and tracking and tracing which probably refl ects works undertaken to upgrade the port of Nacala.

Figure 4.4: LPI – Mozambique 2010 vs 2016

Customs

Infrastructure

InternationalShipments

Logistics quality

Mozambique 2016 Mozambique 2010

Timeliness ofshipmant

Tracking and tracing

5

4

3

2

1

0

� Customs: The effi ciency of customs and border management clearance.

� Infrastructure: The quality of trade and transport infrastructure.

� International shipments: The ease of arranging competitively priced shipments.

� Logistics quali ty and competence: The compe-tence and quality of logistics services—truck-ing, forwarding, and customs brokerage.

� Tracking and tracing: The ability to track and trace consignments.

� Timeliness of shipment: The frequency with which shipments reach consignees within scheduled or expected delivery times

Table 4.5: LPI 2016 Sub-Saharan Africa ranking (comparison w/selected countries)

LPI O

vera

ll R

ank

Cus

tom

s

Infr

astr

uctu

re

Inte

rnat

iona

l S

hipm

ents

Logi

stic

s qu

ality

an

d co

mpe

tenc

e

Trac

king

and

tr

acin

g

Tim

elin

ess

of

ship

men

t

Regional GlobalSouth Africa 1 20 18 21 23 22 17 24Kenya 2 42 39 42 46 40 38 46Botswana 3 57 48 54 70 75 70 43Uganda 4 58 51 67 74 57 59 45Tanzania 5 61 60 60 63 58 60 64Rwanda 6 62 52 76 59 63 58 69Namibia 7 79 73 64 86 86 100 85Burkina Faso 8 81 84 71 83 71 103 88Mozambique 9 84 88 116 58 109 79 97Ghana 10 88 93 86 85 98 101 82Nigeria 11 90 92 96 118 74 82 95Togo 12 92 89 117 93 106 91 76Côte d’Ivoire 13 95 70 89 105 87 89 128

Source: World Bank, Connecting to Compete Trade Logistics in the Global Economy 2016


Reference

FAO (2015) “The State of Agricultural Commodity Markets 2015-2016,” FAO: Rome

IEA (2015) “World Energy Outlook Special Report - Energy and Climate Change,” IEA: Paris

IMF (2016) “World Economic Outlook Database April 2016,” IMF: Washington DC

INE (2015) “Anuário Estatístico 2014- Moçambique,” INE: Mozambique

OECD-FAO (2015) “Agricultural Outlook 2015-2024,” OECD: Paris

OECD/WTO (2015) “Aid for Trade at a Glance 2015: Reducing Trade Costs for Inclusive, Sustainable Growth,” OECD: Paris

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