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Banking

Mozambique seeks to come onstream

The country has new wealth thanks to some big natural resource discoveries. They spell opportunity for both foreign and local institutions. How does such a small economy cope with such big demands?

Mozambique, with an annual GDP growth rate of 8%, is enjoying a spectacular boom in its natural resource-based industries, coal and natural gas, and the construction sector. As a result, investors are swarming in. 

Foreign direct investment reached $5.9 billion in 2013, compared with $5.2 billion in 2012 and $2.6 billion in 2011. A favourable side-effect of this has been rising demand for investment-related financial services. Although investment banking and private equity in Mozambique are embryonic, activity in both these areas is steadily creeping up.

In 2013, Mozambique was the most targeted sub-Saharan African country by investors in terms of value, according to a Thomson Reuters report published in January. 

Its sub-Saharan Africa investment banking analysis 2013 paper indicated that Mozambique accounted for 31% of all M&A activity in sub-Saharan Africa by value, making it the most targeted country in the region – more than South Africa and Nigeria. 

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