Rome — The Mozambique-Italy Chamber of Commerce has praised the efforts of the Mozambican government to secure an effective peace and to create a favourable environment for the promotion of foreign investment.
Speaking to Mozambican reporters in Rome on Wednesday, on the eve of a visit to the Vatican by President Filipe Nyusi, the chairperson of the Chamber, Simone Santi, said that private investment is strongly dependent on a peaceful environment.
"A country at peace offers good prospects for investments in all senses. A country where the risks are high doesn't have any prospect", he added.
Santi congratulated the efforts made by Nyusi in recent years, as well as those made by the Catholic Church and by Pope Francis.
Nyusi's visit to the Vatican is intended to deepen the relations of friendship and solidarity between Mozambique and the Vatican and to draw up perspectives for future cooperation. Nyusi is also expected to thank the Catholic Church for its support in consolidating effective peace in Mozambique.
Turning to Italian investment in Mozambique, Santi said it is concentrated in the hydrocarbon sector, particularly in the Rovuma Basin, off the coast of the northern province of Cabo Delgado, where enormous deposits of natural gas have been discovered in recent years. These discoveries should make Mozambique one of the world's major producers of liquefied natural gas (LNG).
The Italian energy company ENI is the operator of Rovuma Basin Offshore Area Four, and holds a 25 per cent stake in a consortium which also includes the US oil and gas giant ExxonMobil (25 per cent), the China National Petroleum Corporation (20%), Galp Energy of Portugal, Kogas of Korea, and Mozambique's own National Hydrocarbon Company (ENH) each with ten per cent.
"We are talking of investments already approved in the order of 50 billion dollars", said Santi. "Today Italy has become the largest European investor in Mozambique".
Italian businesses, he continued, have not limited their interests to the oil and gas sector, since there are also significant Italian nvestments in renewable energy, touism and agriculture.
The growing interest of Italian companies in Mozambique was shown by the growth in the membership of the Chamber of Commerce. Santi said that, when he became chairperson in 2015, there were only 12 Italian companies enrolled in the Chamber. That number has now risen to over 70.
"In the last two years, we inaugurated two very interesting new tourism projects", he continued. "One is the Diamond resort on Mecufi beach, in Cabo Delgado. This is an extraordinary hotel. We can say it's a genuinely five star hotel, resulting from an investment of about 10 million euros (about 11.7 million dollars)".
The second tourist investment is Coral Beach, near Mozambique Island, in Nampula province.
Asked about the feeble Italian presence in building or rehabilitating infrastructures, a key priority in the Mozambican government's programme, Santi said this is because European companies find it difficult to compete with the Chinese companies that submit bids for these projects.
"For European companies, it's very complicated to work in projects where the profit margin is very small", he said. "The jobs have very high costs, and the situation becomes even less appetising when other costs are added, such as those involved in hiring European workers".
Asked to comment on the difficulties faced by Italian companies that wish to invest in Mozambique, Santi replied that "most of the problems are associated with red tape".
He said this was expressed in the lack of clarity in Mozambique's administrative procedures. To overcome the problem, Santi suggested greater interaction between the business associations in Mozambique, notably the Confederation of Business Associations, with the government's Institute for the Promotion of Small and Medium Entrprises (IPEME), and the Investment and Export Promotion Agency (APIEX).