Subscribe to our email alerts

Beyond the Transaction: Every Transaction Has a Story

Mozambique – On the brink of economic revolution?

The 2015 MasterCard African Cities Growth Index (ACGI) is unique for two reasons. First, its focus on inclusive urbanization as a measure of economic potential, and second, its suggestion of where in Africa investors should cast their gaze for tomorrow’s growth and commercial opportunities.

The results of the 2015 ACGI indicate that the efforts made by Mozambique’s government to revolutionize the country’s economic prospects are paying off. The capital, Maputo, is the large city with the highest growth potential, while neighbouring Matola is both the top-ranked medium city and the city with the highest growth potential overall.

Mozambique’s cities have fared well in the 2015 ACGI because of the progress made towards creating the conditions for both economic and social inclusion in a swiftly urbanizing environment. By including indicators of social inclusion and human development when ranking cities, the ACGI affirms the importance of advancing and protecting individual freedoms to ensure the ongoing economic development of Africa’s cities. Most significant for both cities is the degree of foreign direct investment as a percentage of GDP – one of the highest in the world and three times higher than any other in Africa.

Both cities’ inclusive growth potential falls into the medium-high category. Both cities boast constantly improving levels of government effectiveness, regulatory quality, and ease of doing business. Urban inhabitants’ access to a financial account falls into the upper third of the ACGI cities.

Investors in several industries have reason to be positive about Mozambique’s prospects. The country has a wealth of mineral resources, an established tourism industry, three major ports, five international airports and two significant railway lines. Its location means it is a gateway for landlocked neighbours like Swaziland, Zimbabwe and Malawi. The Government is encouraging the participation of the private sector to increase development of general infrastructure, focusing on the logistics of import-export. There is also emphasis on creating an attractive business climate with tax and trade incentives for local and foreign companies.

It is now critical that Mozambique accelerates the development of both investment opportunities and necessary infrastructure to take advantage of positive investor sentiment. Equally important is investment in skills development and human resource capacity building to keep the Mozambican economy on a high growth trajectory.