Mozambique: Sugar Industry Gets US$12m Boost

13 September 2001
African Eye News Service (Nelspruit)
By Justin Arenstein

Maputo, Mozambique — Mozambique's economy received a major shot in the arm on Thursday with the approval of a US$12 million loan for the rehabilitation of its Marromeu sugar processing complex near the port city of Beira.

The Marromeu initiative is expected to eventually cost US$116 million and will serve an the anchor project for the Zambezi Valley Development Corridor.

Development Bank of Southern Africa (DBSA) spokesman Jabu Mthembu said on Thursday the loan to the Companhia de Sena SARL consortium would fund the refitting of an existing sugar mill and associated infrastructure.

Part of the loan will also underwrite the replanting of 10 278ha of sugar cane next to the Zambezi River, creating 5 500 jobs in related agricultural and factory operations. The Marromeu sugar mill and cane fields were seriously damaged during the country's devastating 16 civil war.

Earlier government attempts to rehabilitate the complex were unsuccessful due to funding constraints, prompting the appointment of a consortium of Mauritian sugar companies to rejuvenate and operate the sugar complex.

The consortium includes the Government of Mozambique as a shareholder. Mozambican economists predict that the project will spark broader infrastructure development in the region, including improved electricity provision, water distribution, road/barging networks and telecommunications.

"This project is one of the first initiatives forming part of the multi-sectoral integrated development programme of the Zambezi Valley Development Corridor," said John Barton-Bridges, DBSA Manager of Private Sector Investments.

"The development of the sugar sector in Mozambique is a priority for the Government of Mozambique since this sector can positively contribute to economic growth, job creation, the balance of trade through import substitution, food security, rural development and poverty alleviation."

Barton-Bridges added that agriculture was an efficient industry for economic development in Mozambique, because it remained relatively low-cost through the intensive utilisation of natural resources such as abundant land, water and labour.

"Sugar production plays an important role in stimulating other economic activities, through backward, forward and consumption linkages," he said. - African Eye News Service

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