Mozambique has huge potential to industrialise its economy.“With its considerable mineral reserves, vast arable land, extensive coastline and harbours, transport corridors, and revenues from megaprojects in coal and gas, Mozambique has good prospects for advancing industrialisation,” writes Kasper Vrolijk of the German Institute of Development and Sustainability in a country report.Constraints include “skills shortages, inadequate infrastructure and issues around the regulation of labour, access to land and finance, taxation, investment and customs”.Governance constraints include corruption and government institutional capacity.Despite the challenges, there are successes.While commodities make up around 95% of total exports, value is added to 20% by Mozal aluminium in the form of ingots.Since 2014 further value has been added locally by Midal Cables International, which exports aluminium wire and overhead conductors for power transmission and distribution.Responses to global warming bring fresh opportunities.“We have all the conditions to implement green industrialisation, which we have already started with – for example, the construction of the Mphanda Nkuwa hydroelectric dam and solar power projects all over the country,” Trade and Industry Minister Silvino Moreno told the 28th Conference of Senior Officials of the United Nations Council for Southern Africa (Uneca).“The implementation of green industrialisation has the potential to generate environmental gains,” added Uneca regional director, Eunice Kamwemdo.Possible spinoffs from the investment in gas processing facilities and the ready availability of gas in the north are being facilitated through the establishment of the Topuito Industrial Park (TIP) in Larde, Nampula province as an Industrial Free Zone (IFZ).Topuito was established by MozParks in partnership with the local government and Kenmare Moma Mining (Mauritius).MozParks is an official developer and operator of sustainable economic zones in Mozambique.It is a public-private partnership between the Mozambican government’s Agency for Investment & Export Promotion (APIEX), and Swiss-Mozambican investors.Other industrial parks include Beluluane outside Maputo, Topuito in Nampula province, Revúbuè Free Industrial Zone (IFZ) in Tete, Mocuba IFZ in Zambézia, Minhewene IFZ in Nampula, and Cabo Degado Parks.There are also six special economic zones.Investor incentives for Mozambican IFZs include exemption from customs duties on imported construction materials, machinery, equipment, accessories, and spare parts; exemption from Value Added Tax on transfers of goods and services; exemption from corporate income tax (IRPC) in the first 10 fiscal years of operation; reduction of the IRPC rate by 50%, from the 11th to the 15th fiscal years; and reduction of the IRPC rate by 25% for the remainder of the project.
