Mozambique - Infrastructure Mozambique - Construction
Overview
The lack of available statistics for this sector make it difficult to quantify the scale of growth. Since 2016, the Mozambican construction industry has grown at a slower pace than in the previous decade due to lower GDP growth and an economic crisis. Many projects, including priority projects (roads, bridges, ports, power plants, railroads), are on hold as the government tries to restore confidence in the economy. Once the large natural gas projects are approved for the north of the country, the infrastructure sector is expected to dominate economic growth in the medium term.
Residential and commercial construction in the urban centers of Maputo, Matola, Nacala, and Pemba continues to offer trade and investment opportunities. Since 2010 Maputo’s skyline changed dramatically, with new towers and commercial complexes being announced regularly. Though this segment has stagnated since the economic crisis of 2016, it is expected to pick up from 2018 as the economy improves. These projects are developed and financed by the local private sector as well as foreign real estate investors.
The infrastructure sector is dominated by Portuguese, Brazilian, Chinese, and South African construction firms, with Turkish, Japanese, and Italian companies recently entering the market. U.S. engineering/procurement/construction (EPC) contractors have also started to enter the market with McDermott’ a participation in the joint venture that won the EPC contract to build Anadarko’s onshore LNG park. The other partners in this joint venture include Saipem (Italy) and Chiyoda (Japan). Valued at USD25-30 billion, this project will be the largest U.S. infrastructure project in Africa.
The established machinery suppliers are Caterpillar and Komatsu with some Indian and Chinese brands also present in the market. Local banks are prepared to finance infrastructure equipment imports, though at high interest rates and generally not in values exceeding USD 50 million.
Major issues that affect the construction sector are the lack of skilled labor, government bureaucracy, corruption, slow tendering processes, and access to credit.
Leading Sub-Sectors
Best prospects for new and used construction equipment:
- Cranes
- Earth moving equipment
- Trucks and Machinery
- Pipes, wires, and cables
- Safety and security equipment
- General construction material
- Pumps
- Electrical equipment
- Fuels and Lubricants
- Power tools
- Generators
- Hand tools
- Iron and steel products
- Architecture & design
- Engineering
- Insurance and financing
- Environmental compliance consultancy
- Standards compliance training
- Inspection services
- Lab analysis
Opportunities
Major infrastructure projects will focus on power generation, mining, oil and gas, road, and port and rail expansions. U.S. Companies will likely find medium- to long-term prospects rather than short-term opportunities.