Mozambique: What Is The Role Of The UAE In Mozambique?

United Arab Emirates (UAE) has become a major, if extremely obscure, player in Mozambique, and little is known about its role in Cabo Delgado. It has also been in the news recently, in ways that link to Mozambique.

With only 10 million people and huge wealth due to the seventh largest gas and oil reserves in the world, it has set out to become a major global player. Frank Gardner, BBC security correspondent, published an excellent and detailed report last week (23 Sept), "How the UAE emerged as a regional powerhouse". https://www.bbc.co.uk/news/world-middle-east-54235209 It is involved in the wars in Libya and Yemen and is backing Somaliland. It main enemy is Iran and it is opposed to Qatar and Turkey, while being allied to Russia and Saudi Arabia and recently signed a peace deal with Israel. Clearly Africa is an area of expansion and Mozambique is one target.

The UAE is a federation of seven emirates, with Abu Dhabi as capital and Dubai the largest city; both are major banking centres. A July report from the Carnegie Endowment for International Peace is titled "Dubai’s role in facilitating corruption and global illicit financial flows".

The links to Mozambique are well known. All money from the $2 bn secret loan (after large bank fees were deducted) went to Privinvest, based in Abu Dhabi, and payments - licit and illicit - were made from there. When former finance minister Manuel Chang was arrested two years ago at Johannesburg airport, he was on his way to Dubai.

The UAE has been strengthening its presence in Mozambique and in 2019 was Mozambique's fifth largest trading partner, with $600 mn in trade. (Dubai Chamber) But a significant part of that trade may involve money laundering transit traffic rather than goods made or used in the UAE. The Carnegie report stresses that "Dubai is a haven for trade-based money laundering. Operating with minimal regulatory oversight or customs enforcement, these zones allow businesses to disguise the proceeds of crime via the over- and under-invoicing of goods, multiple invoicing, and falsifying of other trade documentation." Thus a Mozambican trader importing a container may falsely say it contains very expensive goods, and then use heroin money to make the payment, and someone in Dubai deposits the money in the appropriate bank account.

The UAE investment level approved by the Agency for Investment and Export Promotion (APIEX) reached over $1 bn between 2014 and 2018, with 20 companies from the Arabic federation investing in the Mozambican market. “Our investment has focused on energy, logistics and real estate. Also of note is our significant presence in the management of the Port of Maputo through DP World,” Abdulla Momade, representative of the Dubai Chamber of Commerce in Maputo, told O Pais. (11 Oct 2019)

The largest investment is in Maputo port, run by DP World Maputo which is 60% DP World and 40% CFM, the state railway company, and has the contract until 2043.

Prime Minister Carlos Agostinho do Rosario, after a visit to Abu Dhabi, said the Abu Dhabi Development Fund was open to investing in agriculture. (Further Africa, 21 Nov 2019) Dubai Chamber has an office in Maputo and  on its website is promoting agriculture: "There are 36 million hectares of arable land, of which only 16% is utilized, combined with tremendous irrigation potential from major rivers and the Sector has the best incentives for investors."

UAE produces only 10% of its own food and is particularly active in investing in land and agriculture abroad, including in Mozambique, according to a report (10 Sept 2019) by the Dubai and Abu Dhabi based Alpen Capital.

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