Mozambique: $650M in foreign direct investment in three months

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Mozambique: $650M in foreign direct investment in three months

2:28 CAT | 16 Jul 2024

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

Mozambique secured 650.5 million dollars in Foreign Direct Investment (FDI) in the first quarter, above the 2023 record, according to central bank data compiled by Lusa on Tuesday.

According to the most recent statistical report from the Bank of Mozambique, this volume of FDI invested in the country resulted from shares and participations worth $51.5 million (€47.2 million) and capital in supplies and commercial credits worth $599 million (€549 million).

Compared to the previous year, FDI in Mozambique had already grown by 2% in 2023 to just over $2.50 billion (€2.3 billion).

This performance compares with $2.458 billion (€2.254 billion) in 2022. However, it is still far from the peak recorded in 2021, with investments in the area of natural gas production, which caused FDI in Mozambique to soar that year to almost $5.102 billion (€4.678 billion).

In 2023, the “major projects” category secured $2.087 billion (€1.913 billion) in FDI in the form of capital.

Even so, FDI performance in 2023 exceeded the government’s projection of $1.425 billion (€1.306 billion).

The Mozambican government estimates that FDI in the country should double in 2024, driven by the natural gas exploration business.

In the documents supporting the Economic and Social Plan of the State Budget (PESOE) for 2024, the government points to an increase in FDI to $4.778 billion (€4.381 billion).

“With regard to FDI for 2024, an improvement is expected, mainly influenced by the resumption of TotalEnergies’ investments in the Rovuma Basin,” reads the report.

In the PESOE report for 2024, the government estimates a “notable increase in imports of specialised services by major projects” underway in the country, as well as the “resumption of operations by TotalEnergies”, the French multinational’s project in Cabo Delgado, valued at more than $20 billion (€18.33 billion) and suspended since the start of the terrorist attacks in that northern province.

It also expects the expansion of “production plants for other projects, such as Montepuez Ruby Minning, HCB [Cahora Bassa Hydroelectric Plant] and Coral North FLNG”, which could require “a considerable increase in imports of goods and services, which could exceed the expected increase in exports with the start of natural gas exploration.

The Mozambican government expects the country’s Gross Domestic Product (GDP) to grow by 5.5 % in 2024 to 1.536 trillion meticais (more than €22 billion).

Source: Lusa