REPUBLICOFMOZAMBIQUEInvestment & Export Promotion Agency (APIEX)

MOZAMBIQUE-AUSTRIABUSINESSFORUM

INVESTINGINMOZAMBIQUE

Vienna, 27 May 2019

by: Lourenço Sambo– Director General

PRESENTATIONLAYOUT

WHYMOZAMBIQUE?

LEGALFRAMEWORK&INVESTMENTINCENTIVES

INVESTMENTOPPORTUNITIES

1

2

3

Banco Nacional de Investimento • 3

WHY MOZAMBIQUE ?

EconomyIndicators 2017GDPRealValueandGrowth US$13.407MillionandGrowthRate3.7%

GDPperCapital US$466.18GDPbysector(%) Agriculture:22.5%

Construction:1.7%Manufacturing:8.7%Mining:5.6%Services:6.8%

Inflationrate 5.7%Unemploymentrate 25.04%

Currency MeticalMajorBanks MillenniumBIM/BarclaysandStandard

BankLendingRate 20.4%

KEY ECONOMIC DATA

Source：Source National Institute of Statistics

Categories 2017Population 28.8millioninhabitants

Populationdensity 36,1km2

Gendercomposition 47.81%maleand52.19%female

AgeGroup 0-14yearsold:44,92%15-24yearsold:21,51%%25-54yearsold:27,24%%55+yearsold:6,32%%

RetirementAge Men65yearsold/Women60yearsold

LifeExpectancy Men:55.7yearsoldWomen:59.4yearsold

Language Majority:Portuguese

LiteracyLevel 58.8%

Religion 34%Catholic/20%Muslimsand46%TraditionalReligion

DEMOGRAPHY

Source：Source National Institute of Statistics

WHY MOZAMBIQUE?

$5 billion Nacala corridor rail and port project to open new markets for farm produce and boost regional integration.

$2.7 billion Port of Macuse and 639km Moatize-Macuse Railway project to transport coal

$2.3 billion Chipata-Petauke-Serenje railway line to provide an alternative trade route to the east coast of Africa via the port of Nacala

$2.5 billion Trans-Zambezi rail project to link Zimbabwe to Mozambique through Zambia

$500 million coal terminal to be built by Essar Ports

$550 million Techobanine Port open for discussion between Mozambique, Botswana and Zimbabwe

$500 million upgrade to the Port of Beira in Mozambique

$750 million planned for Port of Maputo to boost handling capacity to an annual 48 million tons a year by 2033.

$99.4 million development for graphite project in Ancuabe

Over $50 billion dollars

of investment in gas projects are under development

PRIVATEINVESTMENTINMOZAMBIQUESource of FDI inflow to Mozambique: 2009 - 2018

Total: 12.3 Billions US$

America

Europe

Asia

Oceania

Africa

2.89% 38.40%

33.71%

24.61%

0.38%

Source：APIEX 2019

TOTALINVESTMENTINFLOWINMOZAMBIQUE(2014-2018)

8

AgricultureandAgro-industry

7%

AquacultureandFisheries

5%

ConstructionandPublicWorks

6%

Energy26%

Industry20%

Services19%

TransportationandCommunications

8%

TourismandHospitality

9%

MOZTotalInvestmentflow(2014-2018)

•  Energy has the largest % of investment inflow (2014-2018) : 26%

•  It is followed by

Industry (20%) and Services (19%)

•  Agriculture and Agro-industry received merely 7% of the total investment inflows during the period

Source：APIEX 2019Note that these investment excepts Oil & Gas Sector

3,094

1,538 1,771

5,185

8,387

12,285

3,379

7241,288

229 697

4,268

7,522

11,455

2,579

83

1,806

1,309

1,074 917 865 830

800641

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

2016 2017 2018 2019 2020 2021 2022 2023

TotalNetFDI

MegaProjects

Other(Non-MegaProjects)

NETFDIBALANCEPROJECTIONFOR2016-2023(US$MILLION)

Source:IMFARTIVConsultationReport(Feb2018)

Banco Nacional de Investimento • 10

LEGAL FRAMEWORK &

INVESTMENT INCENTIVES

LEGALFRAMEWORK

v  InvestmentLaw(Regulations&CodeoFiscalBenefits;v  LandLaw;

v  LabourLaw;

v  PPP’sLaw;

v  EnvironmentalLaw;v  PetroleumLaw;v  MiningLaw;

v  ForexLaw.

TAXATIONSYSTEM

IMPORTCUSTOMSDUTIES

Equipment5.0%

RawMaterial2.5%

Semi-finishedproducts7.5%

Finishedproducts20.0%

VAT

17.0%

IRPC(Residents&nonResidents)

32.0%

IRPS

Minimum10.0%

Maximum32.0%

WITHHOLDINGTAX

(Dividends)

20.0%

Social Security: v  4% (employer) v  3% (employee)

TAXINCENTIVES

GENERALBENEFITSq InRespectofImportofGoods:

q Exemption from customs duties and VAT onthe import of capital equipment, spare andaccessoryparts.

q InRespectofIncomeTax:

q InvestmentTaxCredit;q AcceleratedDepreciation;q Tax Deductions (Professional Training; Use ofnewTechnology)

TAXINCENTIVES

SPECIFICBENEFITSq  CreationofBasicInfrastructures;

q  TradeandIndustryinRuralAreas;q Manufacturing&AssemblyIndustry;q  AgricultureandFisheries;q  HotelsandTourismq  ScienceandTechnologyParksq  LargeScaleProjectsq  RapidDevelopmentZonesq  IndustrialFreeZonesq  SpecialEconomicZonesq MiningActivitiesq  Oil&Gasoperations

AGRICULTURE

INFRASTRUCTURE ENERGY MANUFACTURING TOURISM OIL&GAS

PRIORITYSECTORS

INVESTMENTOPPORTUNITIESOVERVIEW

The development of mega-projects to explore the country’s natural resources can only be fully implemented if supported by complementary infrastructures and services

Agriculture

Logistics Manufacturing

Investment Opportunities

Fisheries Infrastructures

Aquaculture

DC

’s

Nor

th

DC

’s

Sout

h 1

2 3

4

Development Corridors

Name Regional connection

Nacala Malawi

Sena-Zambeze Zambia

Beira Zimbabwe

•  Maputo •  Limpopo •  Libombos

South Africa / Swaziland

1

2

3

4

Source: APIEX

•  Mozambique lacks the necessary infrastructures to further improve its economic growth;

•  The country has established Development Corridors to connect areas of industry with areas of trade, and foster economic and social development

17

Food&Agro-industry

Clothing,Textile&Footwear

NonMetallicMinerals

WoodProcessing&Furniture

Chemical,Rubber&Plastic

Metallurgical

Paper&Printing

Agrícultural

Minerals

Fishery

Energy

Forestry

Hydro

Strategicgoals

FoodProducts(Flours,Pasta,Oils,Rice,MeatFruitsandVegetables)

Feedstock

Beverages

School,military,hospital,industrialclothes

Footwear

Furniture(School,hospital,administrative),boats

BuildingMaterials(windows,cement,doors,

zincsheets)

Sanitarywareanddecorativeitems,ceramics

Fertilizers

Paints,detergents,varnishes,plasticproducts

Fuels(Methanol,GTLandGPL)

Electriccables,ingots,automobiles,equipment,

packaging

Packaging,paperboard,schoolbook,receipts

Trade & Industry

KeySectorsforthePromotionofIndustrialDevelopment

Agriculture e Food Security Land, Environment & Rural

Development

Sea, Fishery & Inland Water Transport & Communication Public Works, Housing and

Water Resources

Work, Employment and Social Security

Science, Technology, Technical and Higher Education

Education and Human Development

AvailableResources

PRIORITY INDUSTRIES– MAIN PRODUCTS

Arroz Soja Banana 8 pr

Iorit

y va

lue

chai

ns

VALUE CHAINS WITH GREATEST OPPORTUNITIES IN AGRICULTURE

Sugar

Rice Maize Cassava Poultry Red Meat

Vegetables Sesame

Cashew nut

Soya

Cotton

Beans

Banana

13 S

TRA

TEG

IC V

ALU

E C

HA

INS

-  15 strategic value chains identified; -  8 have been prioritized.

Source: MASA

Sweet Potatoes Potatoes

DevelopmentofLocalMarketinMozambiquePetrochemical

LNG

PowerMethanol

LPG CNG

GTL

CNG Shell GTL plant in Qatar

EstimatedInvestment–USD5BlnQuantityofNaturalGas–8.5TCFOutput–400MGJ/aPowergeneration–4000MW

GasTransmissionPerspectiveandRegionalIntegration

InvestmentOpportunitywithLNGdevelopmentintheRovumaBasin

Setting up of •  Container Terminal •  Pipe coating Plant :

Ø  Anticorrosion coating of Line Pipe, Risers.

Ø  Concrete Weight Coating of Line Ø  Thermal insulation of Line Pipe, Risers. Ø  Coating of Bends and Fittings. Ø  Field Joints and Repair Kits.

•  Shipyard •  Dry Dock and Ship repair facility •  Bunkering &Terminal •  Training Centers

Container T/L

Pipe Coating Plant

InvestmentOpportunitywithLNGdevelopmentintheRovumaBasin

Logistic

Industry of Agro-processing

Small and Large Scale Agriculture

Forest Plantation

Raillway/RoadTransport

Exploration of Natural Gas

Chemical and Other Industries

DevelopmentScenariosforNacalaCorridor

PEDEC-NACALA

INTEGRATIONBETWEENNATURALRESOURCESDEVELOPMENTANDREGIONALDEVELOPMENT

•  DrivingForcestoTransformtheRegionalEconomyandSpace(MineralResourcesDevelopment)

Tete Coal Development

Rovuma Natural Gas Development

Nacala Port and Processing Industries

24/51

PROGRAMSANDPRIORITYPROJECTS

Point-1: Establish an acceptable and efficient regional / international corridor for general cargo(other than coal)

Point-2: Prevent and minimize negative impacts on society / environment and safety

Point-3: Utilize the improved transportation corridor to promote regional development of the economy and society

232 Projects- 92 High Priority projects -  48 Essencials projects

3 Programs for specific areas 11 Programs by Sectors

Sectorial approach: 37 experts Regional approach: 5 Provinces (Nampula, Niassa, Cabo Delegado, Tete and zambézia (9 Districts)

INFRASTRUCTUREDEVELOPMENTOFDRYPORTS

Source:MTC

Ports

PERSPECTIVES

v  IMF sees cyclones IDAI and Kenneth slowing Mozambique growth to 1.8% in 2019; back at 6% in 2020;

v Global Data foresees advancement on LNG projects will transform Mozambique on to 10 Global LNG suppliers;

v According to Bloomberg Mozambique expect US$ 95 Billion of Gas revenue over 25 year;

www.apiex.co.mz

www.apiex.gov.mz +258 21321291/2/3

Av. Ahmed Sekou Touré,

2539

P O Box 2539

Maputo, Mozambique

+258 82 305 6432

THANKYOU!