Portuguese construction companies say that Mozambique remains promising market

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Portuguese construction companies say that Mozambique remains promising market

1:31 CAT | 17 May 2016

Portuguese construction companies in Mozambique have told Lusa that, despite the crisis the country is facing, Mozambique remains a promising market, and point to encouraging foreign investment as one of the paths out of the current bad times.

Paulo Pereira, financial director of Mota-Engil, one of the companies represented at Expoconstrução Tektonica which closes today in Maputo, told Lusa: “Mozambique is facing difficult times, but I believe that this will be short-lived and, like other countries that have been in a similar situation, it will come out of this situation.”

Pereira said Portugal was “exiting a much more hard-hitting crisis” with increased foreign investment, and said the economic challenges in Mozambique could be overcome if the country continued to assert itself as a promising market at the regional level.

“I have no doubt that Mozambique, with Portuguese companies and international investors, will overcome the crisis,” Pereira said.

João Lopes, CEO of Mercury, Visabeira, said that the crisis in Mozambique was affecting construction sector companies, with the depreciation of the metical affecting imported raw materials prices, but that he was optimistic for the near future.

“Prices tend to rise on the domestic market and this leads companies opting to restrict consumption,” he explained. “The situation is complex but the Mozambique construction market is promising.”

Geonext product manager, Miguel Gomes said that the situation in Mozambique is getting a “bit complicated,” and that this was the worst period in the eight years his company had been operating in Mozambique.

“We have seen cases where payments have had some problems reaching Portugal, possibly due to lack of foreign exchange, and all this has complicated future business,” Gomes said, adding that it is not enough to just have a “huge potential” market: favourable conditions for business are also necessary.

“The information that has been released is not the best, which creates a certain market downturn,” Gomes says, adding that the future of Mozambique is however still promising, given that “the country and the people are fantastic”.

The Mozambican economy has being shaken since the end of last year by a sharp devaluation of the metical against the dollar, rising inflation and the effects of natural disasters and political-military unrest.

Investment fell more than 70 percent in 2015 over the previous year and Mozambique’s main donors announced the suspension financing after the revelation of large undisclosed government-guaranteed debts.

In the face of threats to the economy and mounting public debt, the Mozambican government says it is focusing on increasing productivity and competitiveness to build resistance to further external shocks.

Source: Lusa