5 August 2014

Mozambique: President Guebuza Urges U.S. Companies to Invest

Photo: Aly Ramji/Mediapix
Armando Emilio Guebuza President of Mozambique (file photo).

President Armando Guebuza on 4 August reiterated his appeal for American businesses to invest in Mozambique, and thus help its people achieve their dream of living in prosperity.

Speaking in Washington to business people affiliated to the Corporate Council on Africa (CCA), President Guebuza said that, although a large number of US companies are already investing in Mozambique, there are not yet enough of them to cover the huge potential the country offers.

The CCA was set up in 1993 to promote business and investment between the United States and Africa. It states that its 160 member companies represent nearly 85 per cent of US private sector investment in Africa.

President Guebuza said that, as a better assessment is being made of Mozambican potential in agriculture, tourism, fisheries and mineral resources, it was becoming ever clearer that there is still a great deal to be done to transform these resources into real wealth. Indeed, investment in Mozambique could be considered as in its infancy.

Furthermore, before the country's resources can be fully used, problems of infrastructure must be solved, such as the construction of new railways and ports. These would be required, for example, to export Mozambique's massive coal reserves to buyers abroad.

There are enormous coal deposits in the western province of Tete - but they are deep inland, and currently the only route to the sea for coal exports is the Sena railway, from Moatize to Beira. Even with improvements to the Sena line, it could not handle more than 12 million tonnes a year. Potential coal exports have been put at 100 million tonnes a year - although the initial enthusiasm has been curbed by the recent sharp drop in the world market price of coal.

President Guebuza said that American businesses could immediately invest in more railways for the coal business. The government has plans, for example, for railways from Moatize to new ports in Zambezia province.

The exploitation of the huge reserves of natural gas discovered in the Rovuma basin, off the coast of the northern province of Cabo Delgado, the President added, would also require large scale investment in logistics and services.

The main purpose of President Guebuza's visit is to attend a summit between the United States and African leaders called by US President Barack Obama.

President Obama invited the vast majority of African countries to the meeting - among those who did not receive invitations are the war-torn Central African Republic, Sudan, Eritrea and Zimbabwe.

The current outbreak of the lethal disease Ebola in West Africa has cast a shadow over the summit. The presidents of the three countries hit by Ebola - Guinea, Liberia and Sierra Leone - have cancelled their plans to visit Washington.

US Secretary of Commerce, Penny Pritzker, revealed that US$900 million worth of business deals will be announced during the summit.

The official figures show that American economic relations with Africa are heavily skewed towards just a few countries. Thus in 2013, 67 per cent of Africa's trade with the US came from just five countries - Nigeria, South Africa, Angola, Egypt and Algeria.

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