Technology

Background

At the end of the colonial era in Mozambique, the manufacturing sector was the 8th largest in Africa. The total output of the sector equated to about 12% of the GDP. What had begun as a small processing base in the 1930s had gradually grown to meet the needs of a low-populated nation. Common items manufactured included metals, glass, furniture and garments.

Deep reforms in the governance structure of the country including the adoption of a communist and marxist economic system had devestating effects on the economy. An estimated 200,000 Portuguese and other foreign nationals fled the country, which resulted in the collapse of the economy.

Most sectors including manufacturing which had been owned and operated by them collapsed. The indiginous population which until then had been restricted from technical and trade opportunities was unable to replace the lost human capital. At the end of the 1990s manufacturing began to show some signs of recovery with installation of the new Mozal aluminum processing operations. The 2000s also saw growth in the food processing industry.

Development Challenges

Mozambique's manufacturing sector faces a difficult future if the Government does not engage the correct monetary and structural policies. The following difficulties are expected:

If the extractive industries experience a boom in growth, it is likely that increased foreign investment in the country will cause the value of the Meticais - the local currency - to appreciate

An appreciated currency makes it more expensive to produce certain types of manufactured goods locally, while making it easier to import goods from elsewhere

Already the manufacturing sector has low levels of productivity relative to wage levels

The manufacturing sector does not compete on international levels and has not adopted international quality standards

Contrabanded goods and ineffective customs control hurt legally established businesses that are trying to manufacture goods locally

Tax Insights

Audit Opportunities

Source:
Manufacturing in Mozambique - USAID, 2014
Structure and Performance of Manufacturing in Mozambique Tyler Biggs, John Nasir and Ray Fisman - RPED Paper No. 107, 1999
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