Mozambique: Portugal still main EU trade partner despite Covid as summit starts

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Mozambique: Portugal still main EU trade partner despite Covid as summit starts

10:53 CAT | 01 Sep 2022

FILE - For illustration purposes only. [File photo: Lusa]

Portugal leads among European Union countries from which Mozambique takes its imports, despite the disruption of traditional trade patterns caused by the Covid-19 pandemic, from which the two countries are set to try to recover with this week’s government summit and business forum in Maputo.

A third of everything that Mozambique buys from the EU comes from Portugal, according to 2020 data from the African country’s National Statistics Institute (INE), the most recent available for a full year.

Medicines, diagnostic and laboratory reagents, wheat, rye and construction materials are the main Portuguese products arriving on the Indian Ocean coast, worth around €230 million in 2020.

In the opposite direction, over half of what Portugal buys from Mozambique is seafood, worth a total of €22 million in 2020. Portugal is sixth among EU destinations for Mozambique’s exports.

The last bilateral summit was in 2019; at the time Mozambique’s president, Filipe Nyusi, called for a strengthening economic relations with Portugal, and training and investment in the transformation of his country’s raw materials, to enhance their value.

At the same time, António Carlos Silva, the director of the Portuguese Agency for Investment and Foreign Trade (AICEP), said that economic relations between Portugal and Mozambique were below potential. This was, he said, a “challenge” that had yet to be faced, because in the meantime almost everything had stopped due to the focus on the fight against Covid-19.

This week’s government delegation from Portugal, led by the prime minister, António Costa, will be in the Portuguese-language country on Thursday and Friday. Before the pandemic there were about 600 Portuguese companies active there, mainly small and medium-sized – making Mozambique the country with the most Portuguese firms after Angola.

Mozambique’s two main banks, Millennium and BCI, are owned by banks based in Portugal, and there are a number of other major Portuguese brands in the fuel, hotel and construction sectors, among others.

Mozambique remains one of the world’s poorest countries, where much of the expectation for those doing business remains in the hope that exploitation of natural gas resources will go ahead soon, after armed attacks in the north of the country forced investors to postpone major gas projects.

Still, amidst the uncertainty, the outlook is for accelerated economic growth in Mozambique. In its latest analysis of the country, published Friday, credit rating agency Fitch raised Mozambique’s rating to CCC+ from CCC, predicting that growth in its gross domestic product would accelerate to 7.7% in 2024 and remain high until 2026.

Costa and Nyusi are to lead their respective delegations at the 5th Mozambique-Portugal Summit, scheduled for Thursday in Maputo.

The business forum between the two countries is to take place on Friday during the Maputo International Trade Fair (FACIM), the country’s main such event. The forum is also to be attended by Nyusi and Costa.

Source: Lusa