Mozambique special edition 2018

MOZAMBIQUE

Quarterly magazine on-line, May / July 2018

Special Edition

Chargé d’Affaires a.i.

Mr. Inácio Tomás Muzime

Editorial

by Barbara Ganetti

Mozambique is a strategic partner in the African continent for Italy, especially from the point of view of trade and economic cooperation. In the latest years, the country recorded growth rates among the highest of subSaharan Africa (on average around 7/8%), particularly supported by the activities of the mineral and the energetic sectors as well as by the infrastructural investments. After a slowdown in 2016 (3,3%), in 2017 signs of improvement have been recorded.

In prospect, Mozambique growth expectations are positive. The huge natural gas fields and the mineral richness of the country (in particular, coal, graphite and heavy sands) still attract important flows of Foreign Direct Investments in the medium term, fostering also the related satellite activities and creating new places also for the small and medium-sized companies.

Within this framework, the country presents

considerable opportunities in the energy and in the mining industry sectors.

Further sectors of potential interest concern infrastructures, tourism and the agro-industry. In the commercial context, beyond the machineries and the capital goods, also the consumer goods and the Made in Italy (starting from the food sector) present good perspectives of development, with the progressive growth of the internal market.

By courtesy, in this issue we recommend the partecipation of H.E., Mr. Inácio Tomás Muzime Chargé d’Affaires a.i. of Embassy of the Republic of Mozambique in Italy ,H.E. Mr. Guido Massucco, Honorary Consul of Mozambique in Turin and Mr. Gianni Loreti, Director of ICE Maputo, with whom we will consider the cultural and commercial relations between these two countries.

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Sommary Interview with Mr. Inácio Tomás Muzime, Chargé d’Affaires a.i. of Embassy of the Republic of Mozambique in Italy.

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15 Interview with Mr. Gianni Loreti, Director of ICE Maputo, for “The Progress Time”.

10 Interview with H.E. Mr. Guido Massucco, Honorary Consul of Mozambique in Turin, Italy.

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THE PROGRESS TIME Quarterly magazine on-line, May / July 2018 Aut.Trib. di Arezzo n. 4/13RS del23/07/2013 Aut. Modifiche dal Tribunale di Arezzo del 02/07/2015 EDITOR Mr. Ivan De Stefano EDITOR IN CHIEF Mrs. Barbara Ganetti GRAPHIC & WEB DESIGNER Mr. Tosi Lucio QUESTO NUMERO È STATO FINITO DI IMPAGINARE IL 16/05/2018 CONTATTI editore@theprogresstime.com - redazione@theprogresstime.com

Interview with Mr. Inácio Tomás Muzime Chargé d’Affaires a.i. of Embassy of the Republic of Mozambique in Italy.

by Ivan De Stefano

H.E. Inacio Muzime

The friendly relations with Italy consolidate the prospects of commercial and economic cooperation between the two countries, what new bilateral cooperation projects are expected in the next three years?

Mozambique enjoys cordial and promising relations with Italy, which has been and remains one of its leading international partners. Therefore, both countries are looking forward to expanding and consolidating the scope of their bilateral relations. In this regards the new trends of bilateral cooperation is increasingly focusing on two main aspects namely: cooperation on projects and on the

development of the private sector.

Both features are present and visible in Mozambique where the Italian cooperation has recently launched calls for several projects. In addition, the active presence of Italian entrepreneurs lead to the establishment of Conselho Empresarial Mozambique–Italy (CCMI) -Mozambique-Italy Business Council- involving more than 60 companies.

The CCMI, recently inaugurated, with the participation of the Italian Embassy in Mozambique, a branch in Pemba, in the area of Cabo Delgado, where it is expected that development of the Oil & Gas sector will bring about many investments and opportunities. We believe that the forthcoming

Mozambique-Italy Business Forum, scheduled for June 2018, will offer excellent opportunity for definition of new projects in sectors such as oil and gas, agribusiness, tourism, infrastructure, energy, finance, logistic.

Mozambique is for Italy an important strategic partner, especially for the huge natural gas and mineral wealth, which includes new incentives his government to encourage foreign direct investment?

In recent years Mozambique has growth rates among the highest in sub-Saharan Africa (an average of around 7.8%), what policy reforms are planned by Mozambican Government to maintain these growth levels?

Mozambique is at a critical stage of promoting sustainable economic development and has already put forward several legal frameworks and incentives for foreign direct investment.

As a matter of fact, Mozambique guarantees incentives in terms of tax relief for foreign

Mozambique is committed to continued economic growth for such it is consistently promoting its business environment aiming at attracting more investments. Recently he Government has announced important institutional reforms through the newly created Agency for Investment and Export Promotion (APIEX) aiming to promotion and facilitation

of businesses, bringing together public and private investments and exports. Apart from institutional reforms, Mozambique is also focused on policy reforms such as reassuring protection against property expropriation, non-discriminatory treatment between foreign and domestic investor, non-restriction to loans and payment of interests abroad. These and other reforms aims to increase the advantage on attracting investment.

The country is studying a model of “local content� in line with the historic openness towards foreign investments, but also looking to provisions capable of guaranteeing the growth of added value and national production in support of mega-projects.

investments, and has an important program of development of free economic zones and special areas for investments, which encompasses specific incentives that includes tax exemption for periods between 3 to 5 years, tax reductions, fiscal benefits, and other similar incentives. This is one of the reasons why the Agency for Free Zones and CCMI Conselho Empresarial Moçambique - Italy, are

developing a plan to support localization of Italian companies. Italian investors can also benefit from the provisions of bilateral agreements on promotion and reciprocal protection of investments, as well as the agreement to prevent double taxation and fiscal evasion.

These provisions have allowed the entry into Mozambican market of Italian companies such as ENI, Bonatti, Trevi and Renco, which shine with works in Oil & Gas, in real estate and in tourism. These companies have joined the historic presence of the CMC in Ravenna, recently chosen by the American company Anadarko, for the construction sites for a major project of resettlement of 140 million USD. Another deeply rooted presence is that of the Leonardo Group, which has been investing for 20 years and diversifying its portfolio, and is now an industrial and strategic partner of large groups in different sectors.

Besides, Mozambique presents a wide range of opportunities for foreign companies.

Just think that, according to the African Development Bank, Mozambique’s economy could become “one of the biggest in Africa� when natural gas production in the north of the country will reach its peak in 2028.

Italian Know-How is excellent and sought in most of the world, what new commercial opportunities are expected for small and medium-sized Italian companies and in which sectors?

Italy is an excellence in several economic areas and this can be a benefit of Mozambique. The Italian economic model, particularly the role of small and medium enterprise is an important example that could be adjusted to Mozambican economy, culture and traditions.

The connection with the Mozambican business associations, as the CTA - Confederation of Economic Associations of Mozambique (which also has representation in Italy, in Milan), allows to develop the win-win collaboration between small and medium enterprises, where Italy can transfer know-how and Mozambican companies could offer knowledge of the market and doing business in Mozambique.

Today Mozambican entrepreneurs and representative associations are internationalizing and aligning with the rules of the game of big companies (compliance, certifications, distance from politics), and getting ready to increase partnerships with Italian companies.

Mozambique presents many cases of small and medium Italian entrepreneurs who have built and developed important companies thanks to the growth of the country and the favorable business environment.

As for investment sectors, Italian small and medium-sized companies may direct their investments in agribusiness, tourism, fisheries, logistic, benefiting of access to Southern Africa regional as well as International markets. It is worth to note that Mozambique and Italia have a number of bilateral agreements, such as Investment Promotion and Reciprocal Protection and Agreement to prevent Double Taxation and Fiscal Evasion, aiming to facilitate economic and commercial relations.

Interview with H.E. Mr. Guido Massucco, Honorary Consul of Mozambique in Turin, Italy.

by Ivan De Stefano

H.E. Mr. Guido Massucco

Which opportunities does Mozambique offer for italian Know How? Italy is one of the favorite partner of Mozambique and the Italian PMI have very good possibilities to get in to the inner market as the country is constantly pursuit of know how in competence in order to increase the development process at the moment being. Most important is to point out the signature of the economic partnership agreements (APE) undersigned in 2016 between UE and the SADC countries which will give a good word to commercial and economic integration of the country.

Not withstanding the richness of raw materials as coal, graphite, titanium, gems and natural gas, the 45% of present pil represented by commerce and services. I think that the most important sector are those of the production

e machineries for agriculture for processing preservation and packing of agricultural product. Quite interesting is the production of cotton, infact Mozambique is the second one in the world after Egypt for quality through the spinning and the weaving; at the moment all the production is being sent abroad raw to be worked. Is spite of the big quantity of natural gas and the next building of the network which will bring power in the whole country the sector of clean power as well, it’s very interesting and it requires partnership and cooperation; photovoltaic and aeolion system bio digester and incinerators (waste to energy.

It should be known that Mozambique allows to foreign companies to hold the 100Y. of the capital of the company in m. which works in the country without the duty to have private or local corporations participation and it allows the income interest and dividends repatriation.

M. from the enterprise point of view it isn’t only a potential market as’ regards foreign service and goods but it’s a country, especially now, where to evaluete medium and long term investment to be lined up whit the Italian ability and tradition of companies even without big

capitals but with the will to create value and transfer know how choosing local partner. For example Bonatti Trevi and Renco are companies shining for their works in oil and gas, real estate and tourism. Even small and medium specialized companies as Donelli (special varnishing) Erresse (valves) EcolibrĂŹ (aeolic and tourism) Gandelli ( wood, tourism and food stuff) PCS African cable (undersea cables for oil rigs) ETL (oil and gas).

Which strategies is Mozambique carrying out to increase tourism?

Thank to clean beaches and a crystal clear sea, the tourism has a potential huge development.

The Government has already sotted the location where to accomplish in the future the structures to give the tourist a warm welcome. In particular the most developed area is in the north of the country from Pemba to the boundary of Tanzania. Both the coast and the islands have a steady development for the building of small and big resort in Pemba.

Mozambique through the national institute of tourism (INATUR), a public corporation born for the promotion and development of tourism, created the management of the touristic location by improving the services and the quality of tourism itself together with the pegging of the market appointing good condition to attract big and medium investors and tour operators.

Where does research and innovation in Mozambique go and which opportunities of cooperation are there with Italy?

University E. Mondlane, ISCAM Institute of accounting and auditoria of Mozambique , Institute S.M.M. de Africa are only an example how quick is the increase in Mozambique for the research and innovation in all sectors. Italy has already done cooperation project just for the development and innovation, for example the “COOPERATION AGREEMENT� undersigned in 2015 between Torino and Maputo, The Mozambique project for joined activities with Trentino and Mozambique regarding infor-

mation and communication technologies (ICT). Professor Amildi of the Department of Agriculture University E. Mondlane in Maputo and member of the Academic Senate, is deeply interested in rural development of technological innovation and relationship among research, education and rural spreading.

Professor Amilai has been in Perugia university c/o the Italian Agency for the cooperation to the development which gives a support to the university E. Mondlane for the Academic Improvement Technological

innovation and scientific research.

During last months the architecture dept. and politecnico in Torino contacted the respective university dept. in Maputo in order to promote a cooperation turned not only to a development to the university in Maputo, but also to quite interesting work possibilities for the Italian professionals and they are studying a project to involve business consultant association in Torino and the new association in Maputo.

Interview with Mr. Gianni Loreti, Director of ICE Maputo, for “The Progress Time�.

by Barbara Ganetti

Dear Director, the ICE Office in the Mozambique has supported Italian companies for trade collaborations, nowadays, what are the new markets foreseen for small and medium sized Italian enterprises in the Mozambique.

Mozambique is more of a market for production than for consumption. Energy (including renewables) and mining, infrastructure, logistics, tourism and agro-industry are the main sectors of interest.

There are about thirty Italian SMEs operating in Mozambique in wide-ranging sectors: transport and logistics, IT, oil and gas, renewable energy, real estate and construction, civil engineering, tourism, agri-food and consulting services.They can harness growth through the development of the market. Often our SMEs

have peculiar skills that allow them to overcome the challenges of logistics and peculiarities of the country.

In 2017, Italy confirmed its position as the major European investor in Mozambique, with over 100 million dollars in investment, followed by Portugal, United Kingdom and France. Globally, in the same year Italy ranked fourth place, after United Arab Emirates, Mauritius and China. We are also in third position for the investment stock in 2012-2017 with 2.5 billion dollars (after the Arab Emirates with almost 6.0 billion dollars and United States with 5.0 billion dollars). Other important investors are China, India, South Africa and Brazil. In this context, Italian ENI company holds a key position, following the discovery of huge reserves of natural gas in the country and the start of activities aimed at its

extraction and liquefaction.

In the commercial field, on the other hand, the bilateral trade is about 450 million dollars, with an historically trade deficit for Mozambique. The core of Italian imports is aluminum, and on the export side, machinery and capital goods are the most significant. In any case, with a growing domestic market, it is clear that consumer goods and Made in Italy could be more and more interesting, starting with agri-food. The main commercial competitors are Portugal and South Africa (also for historical and geographical reasons), as well as India, Singapore and China.

Are there some interests from entrepreneurs of Mozambique for the transfer of the Italian Know-How? If yes, in what sectors To understand how the transfer of Italian know-how in Mozambique is possible, it is necessary to make some considerations that

analyze the economic context in which we operate, starting from which Italian companies can draw their own conclusions. Mozambique is still a country whose development is lagging behind and in a context in which large public debt and the availability of financial resources are critical. So, cooperation relations - not only with Italy but also with other international partners - play an important role in the country.

Italian cooperation, with the aim of promoting inclusive and sustainable economic growth for the benefit of the entire population, is very active in Mozambique and it is particularly committed to the development of basic infrastructure and human resources.

The concrete examples are not lacking: the bridge on the Zambesi river (connecting the south and the north of the country), the dam of “Pequenos Libombos� (which ensures the water supply for the city of Maputo), the technical-professional training programs, university education and research in collaboration with Italian universities.

Now, new initiatives are starting in these areas: the construction of a complex drainage system in a large, popular district of the capital (about 60 million euros) and a professional training development program that will strengthen agricultural and technical skills (about 35 million euros).

Beyond that, there are many other programs in several sectors: agriculture, health, urban

planning, energy, environment, gender equality, information technology and governance.

In the majority of economic sectors, the central planned economy legacy is still influencing economic decisions. The Government’s action are focused on the economic and social inequalities between the North and the South and are intended to concentrate on the industrialization and implementation of new infrastructures, in particular in the energy, transport, agricultural production and residential construction sectors.

There are many projects, but the problem of finding financial resources is crucial and as a consequence the role of international financial institutions becomes decisive especially in financing the great infrastructural works that the country needs. The World Bank, for example, has already planned to allocate 1.7 billion dollars for Mozambique in the 20182021 period.

For larger projects, the selection is made ac-

cording to international procedures and our companies have all the right credentials to participate successfully.

What are the new appointments addressed to Italian companies and organized by the Maputo ICE Office for the year 2018?

The most important event of the year for anyone wishing to do business in Mozambique is, without any doubt, the FACIM, the International Fair of Maputo, now in its 54th edition. This year it will take place from 27th August to 2nd September. The event, the main international economic show in the country, is a multi-sector trade fair. In general, there are about 90 thousand visitors and, in addition to the participation of about 3,000 exhibiting Mozambican companies, there are more than 30 foreign countries. Portugal, South Africa, Germany and Italy are the most represented.

In recent years, FACIM has also become a privileged showcase for other Sub-Saharan and Central African countries.

Over the last two years, the economic and financial crisis that hit Mozambique, which culminated with the default in early 2017, has led to a significant reduction in the country’s growth. However, the confident economic growth forecasts encouraged Italian companies to participate in the 2016 and 2017 editions.

For the present edition, the ICE-Agency has a total surface area of about 200 square meters in which there will be specific positions for about 20 Italian companies (for information or to participate you can contact the ICEAgency Maputo Office at maputo@ice.it).

In addition to the FACIM Fair, ICE-Agency organizes other events aimed at promoting Made in Italy. In May, various Italian footwear brands are promoted. In November, the “third week of Italian cuisine in the world” takes place, where ICE-Agency and the Italian Embassy of Maputo promote the broad range of Italian food. And in December, as usual, Italian fashion is on stage at the Mozambique Fashion Week, with fashion shows and wor-

kshops aimed at enhancing fashion accessories, also made in Italy.

I would like to point out that our work intends to support companies abroad, mainly small and medium-sized companies, which represent the flywheel of the Italian economy but are also the most exposed to the risks of a market considered “distant and difficult”. The latter ones, despite having the qualities and the chances of success, feel the problem of competitiveness with greater intensity in the Mozambican market. Their small size does not allow them to easily access the processes of research, innovation and continuous training and, therefore, compared to large companies have a greater need for assistance, protection and promotion.

I would like to conclude by proposing direct contact with ICE-Agency and the Italian Embassy of Maputo to obtain all the necessary information on specific areas of interest, and define a listing of possible contacts. Then, where useful, a short visit can be organized to the country, so as to evaluate in person any proposals, the conditions and the bureaucratic procedures, also with the help of our trusted legal team.

Control Panel for Elevator and Plc system

- Electric components (power contractors and relais) - Electronic components (resistors, IC, condensators, transistors ) - Electronic microprocessor board on demand

Production base: Via Mottoscarone 101. 28019 Suno (NO) Italy http://vgerplanet.weebly.com - email: info.vger@gmail.com