“Mozambique has been one of the fastest growing countries in Africa in recent years. The average growth over the past couple of years has been over seven per cent, 2012 has been 7.4 per cent, hence the reference to a robust,” Ridle Markus, an ABSA Capital Africa Strategist told CNBC Africa on Friday.
In its latest economic evaluation report, the IMF said Mozambique’s economy remained strong despite harsh world economic climate instigated by the international financial crisis. In 2013 coal production as well as in financial services saw rapid growth.
“There’s been lot of activities going on in Mozambique especially in the resource sector where we see foreign investors coming to invest into the resources sector trying to expand the coal production or coal output and also the gas resources,” Markus added.
“Mozambique has some of the world’s largest gas resources and once fully developed it will probably be the fourth largest in the world. So the substantial money flowing into the country in development of these resources has underpinned economic activity and could raise a buzz and a lot of action in the domestic economy.”
The report also indicated a steady flow of foreign direct investment as a major stimulus to economic growth. Markus was optimistic that the figures will rise even more in 12 months’ time.
“Foreign direct investment last year totalled around five billion dollars, it could easily come in around similar kinds of levels around this year as well. All these services that sort of support that activity will definitely benefit including the financial sector and some other trade sectors as well,” he said.
Markus said infrastructure development continue to pose a serious threat to Mozambique’s export trade. Severe floods at the beginning of 2013 destroyed agricultural products and infrastructure in the south of the country.
Following a recent threat by the Mozambican National Resistance (Renamo), talks are underway for the opposition party not to destroy the only railway line out of Mozambique’s vast coalfields in its dispute with the government.
“It seem like things are back on track and we’re confident that they will resolve and these issues and that coal export will continue. Last year produced five million tonnes of coal and I think this year they’ll easily beat this number,” Markus noted.