Business Potential - INVEST & EXPORT BRASIL€¦ · Business Potential 31st March, 2015 Maputo,...

Business Potential

31st March, 2015

Maputo, Mozambique

Mozambique & Brazil - A Case for Collaboration

2

Agenda

13:00– 13:15 Welcome by Standard Bank Mozambique

13:15 – 14:30 Lunch and interactive Presentations

Country Economic overview

Sectorial opportunities in the country

14:30 – 15:00 Networking

14:55 – 15:00 Closing

120 YEARS OF HISTORY IN MOZAMBIQUE

31st March 2015 Fausio Mussa

Chief Economist Standard Bank - Mozambique

Economic Update

Stepping into the future...

2015 & Beyond


Topics for discussion

• Establishing business in Mozambique/ Land

• Mozambican economy growth prospects

• Current account, foreign direct investment and currency

• Inflation

• Government finances

• Monetary policy and interest rate


• Economic activity expected to remain strong but current floods could reduce GDP growth to 6,5% y/y • Weak coal price is likely to discourage increase in production despite Nacala line coming on stream • Low fuel prices expected to delay further the development of natural gas projects/lowering FDI • Less accommodative monetary policy and fiscal consolidation required for macroeconomic stability

175.1

50

207.4

48

237.5

49

267.9

45

295.1

79

345.2

16

384.9

97

423.7

33

465.3

25

8,7%

9,9%

7,4%

5,8%6,5%

7,1%7,4%7,1%7,3%7,4%

6,5%

0%

2%

4%

6%

8%

10%

12%

150.000

200.000

250.000

300.000

350.000

400.000

450.000

500.000

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015(*

)

PIB anual (Annual GDP) base2009

Nominal (MT10^6) Cresc Real (Real Growth)

Agricultura (Agriculture)

23,4%

Pescas (Fisheries)

1,7%

Ind.Extractivas (Extractive Industries)

3,1%

Manufactura (Manufacturin

g)11,3%

Prod&Distrib Electr&Gás (Electricity &

Gas)2,9%

Construção (Construct.)

2,6%

Comércio (Trade)10,1%

Transp.Armaz. e

Comunicações (Transport

Storage &Com.)8,8%

Activ.Financeiras (Financial

Activities)6,6%

Activ.Imobiliarias (Property)

7,0%

Outros (Others)22,6%

Estrutura do PIB 2014 base 2009 (GDP Structure 2014 new base 2009)


• Mozambique runs a structural current account deficit which has been financed by FDI and Donor Support

Cerveja (Beer); 18,6;

0.2%

Cimento (Cemment);

111; 1%

Medicamentos (Medicine);

125; 2%

Oleo Alimentar (Coocking

Oil); 143; 2%

Electricidade (Electricity);

262; 3%

Cereais (Cereals); 356; 4%

Automoveis (Vehicles); 508; 6%

Combustiveis (Fuels);

1.112; 13%

Bens de Capital (Capital Goods);

2.052; 24%

Outros (Others);

3.791; 45%

Importaçoes (Imports 2013 U$ million)

Combustiveis Reexportaçao

(Fuels reexport); 32 ;

1%

Algodao (Cotton); 99 ;

2%

Açucar (Sugar); 186 ;

4%

Tabaco (Tobacco); 251 ; 6%

Gas Natural (N Gas); 230 ;

6%

Electricidade (Electricity);

270 ; 7%

Areias Pesadas (H

Sands); 131 ; 3%

Carvao (Coal); 503 ;

12%

Aluminio (Allummium); 1.063 ; 26%

Others; 1.358 ; 33%

Exportaçoes (Exports 2013 U$million)


• Resources Sector (coal and natural gas) is the dominant player in terms of Foreign Direct Investment inflows (accounting for more than 80% on inflows), helping to finance current account deficit

2009 2010 2011 2012 2013 Total

Industria Extractiva

(Extractive Industries) 489,9 938,3 2.126,2 4.374,2 5.469,8 13.398,4

Manufactura (Manufaturing) 85,9 1,1 317,1 391,6 -143,7 652,0

Transporte

Armanzenamento,

Comunicações (Transport,

Warehousing, Comms)

128,5 24,2 87,5 98,7 271,7 610,6

Agricultura (Agriculture) 142,2 1,0 9,1 153,9 115,0 421,3

Serviços Financeiros

(Financial Services) 9,5 34,9 42,9 43,4 107,5 238,2

Comercio (Trade) 16,4 0,0 5,5 71,0 48,1 141,0

Imobiliario (Property) -1,9 0,8 14,3 40,6 137,4 191,2

Construção (Construction) -2,0 8,0 15,0 28,7 63,2 112,9

Hoteis e Restaurantes

(Hotels and Restaurants) 23,6 4,3 15,9 26,5 39,5 109,8

Produção e Distribuição de

Electricidade Agua e Gas

(Production and Distribution

of Electricity, Gas, Water)

0,0 0,4 8,6 -31,6 72,0 49,3

Outros (Others) 0,3 4,8 20,9 432,4 -5,3 453,1

Total 892,5 1.017,9 2.662,8 5.629,4 6.175,1 16.377,8

-8.000

-6.000

-4.000

-2.000

0

2.000

4.000

6.000

8.000

2010

2011

2012

2013

2013 (

9M

)

2014 (

9M

)

US

D 1

0^

6

Défice da Conta Corrente e Investimento Directo Estrangeiro (External Current Account Dedifict and FDI)

Investimento DirectoEstrangeiro (ForeignDirect Investment)

Deficit da ContaCorrente (CurrentAccount Deficit)


• Following a long period of currency stability, supported by FDI/Reserves, local currency volatility to USD increased since Dec/2014 trading above MZN/USD35. Central Bank annual net sales of foreign currency to support the market increased from USD623.4million in 2013 to USD1207.7 million in 2014 but was insufficient to contain depreciation as reserves remained under pressure closing below target.

2

3

3

4

4

5

5

6

6

7

7

0

500

1.000

1.500

2.000

2.500

3.000

3.500

Dec-0

9F

eb-1

0A

pr-

10

Jun

-10

Au

g-1

0O

ct-

10

Dec-1

0F

eb-1

1A

pr-

11

Jun

-11

Au

g-1

1O

ct-

11

Dec-1

1F

eb-1

2A

pr-

12

Jun

-12

Au

g-1

2O

ct-

12

Dec-1

2F

eb-1

3A

pr-

13

Jun

-13

Au

g-1

3O

ct-

13

Dec-1

3F

eb-1

4A

pr-

14

Jun

-14

Au

g-1

4O

ct-

14

Dec-1

4F

eb-1

5

US

D m

illio

n

Mo

nth

s

Reservas internacionais liquidas e cobertura de importações (Net international reserves and import cover)

Reservas (Net International Reserves)

Meses de cobertura (Import cover months)

0

1

2

3

4

5

6

7

8

9

10

0

5

10

15

20

25

30

35

40

45

50

Dec-0

9

Ap

r-10

Au

g-1

0

Dec-1

0

Ap

r-11

Au

g-1

1

Dec-1

1

Ap

r-12

Au

g-1

2

Dec-1

2

Ap

r-13

Au

g-1

3

Dec-1

3

Ap

r-14

Au

g-1

4

Dec-1

4

MZ

M/U

SD

& M

ZM

/EU

R

MZ

M/

ZA

R

Taxas de câmbio no MCI (MCI foreign exchange rates)

MZM/USD

MZM/EUR

MZM/ZAR


• Metical appreciation to the SA Rand (3,9% y/y in 2014) combined with stable administered prices (including fuels) and quick recovery from Q1 2014 floods helped to contain inflation at low historical levels. Current floods combined with Metical weakness to the USD will drive inflation up but average is likely to remain within Government target of 5.1%

Maputo

1,23% m/m

2,09% y/y

2,14% média (average)

Beira

0,45% m/m

4,22% y/y


Nampula

2,61% m/m

6,68% y/y


CPI?

CPI?

Inflação - Moçambique (Moz Inflation (Fev2015)

1,56% m/m

3,99% y/y


0

2

4

6

8

10

12

14

16

18

20

Dec

/200

9M

ar/2

010

Jun/

2010

Sep

/201

0D

ec/2

010

Mar

/201

1Ju

n/20

11S

ep/2

011

Dec

/201

1M

ar/2

012

Jun/

2012

Sep

/201

2D

ec/2

012

Mar

/201

3Ju

n/20

13S

ep/2

013

Dec

/201

3M

ar/2

014

Jun/

2014

Sep

/201

4D

ec/2

014

Mar

/201

5Ju

n/20

15S

ep/2

015

Dec

/201

5

Inflação Moç.(Mozambique Inflation)

Anual (Annual)

Média (Average)

Annual (forecast)

Average (forecast)

Pre

vis

ão (

Fore

cast)


• Monetary aggregates expected to grow at lower pace in the region of 19% from 28.3% private sector credit expansion last year and 22,2% M3 growth as inflation is likely to maintain an upward trend

0

2

4

6

8

10

12

14

16

18

Dec-0

9F

eb

-10

Ap

r-10

Jun

-10

Au

g-1

0O

ct-

10

Dec-1

0F

eb

-11

Ap

r-11

Jun

-11

Au

g-1

1O

ct-

11

Dec-1

1F

eb

-12

Ap

r-12

Jun

-12

Au

g-1

2O

ct-

12

Dec-1

2F

eb

-13

Ap

r-13

Jun

-13

Au

g-1

3O

ct-

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Dec-1

3F

eb

-14

Ap

r-14

Jun

-14

Au

g-1

4O

ct-

14

Dec-1

4F

eb

-15

%

Taxas de Juro do Mercado Monetário I. & Inflação Média Maputo (Interbank Money Market Interest

Rates & Maputo Avegare Inflation)

FPC

BTs 3M (3Month TBs)

Inflação (Inflation

FPD

0

10

20

30

40

50

60

Dec-0

9F

eb-1

0A

pr-

10

Jun

-10

Au

g-1

0O

ct-

10

Dec-1

0F

eb-1

1A

pr-

11

Jun

-11

Au

g-1

1O

ct-

11

Dec-1

1F

eb-1

2A

pr-

12

Jun

-12

Au

g-1

2O

ct-

12

Dec-1

2F

eb-1

3A

pr-

13

Jun

-13

Au

g-1

3O

ct-

13

Dec-1

3F

eb-1

4A

pr-

14

Jun

-14

Au

g-1

4O

ct-

14

Dec-1

4F

eb-1

5

%

Variação % anual de gregados monetários a/a e Taxa de Juro Prime Rate (Annual change in monetary

agregates and prime lending interest rates)

M3

Crédito a Economia (PSCE)

Base Monetária (Reserve Money)

Taxa de Juro Prime (Prime Lending Interest Rate)


• 2015 budget is expected to be presented towards March-end by new Government

• Expenditure at 47% of GDP is high

• Donor support remains important as it finances 32,5% of the deficit representing 5,7% of GDP in 2014

• Budget will remain under pressure as windfall capital gains tax is unlikely to be repeated this year

• External debt is growing towards sustainability limit of 40% NPV of GDP

• Government policies including tariffs placed some SOEs (State Owned Companies) cash flows under extreme pressure

JULY2014 (2014 Budget ammendment)

New Budget Aug2014 USD million % of GDP % change

Fiscal Revenue 155.573.918,4 4.953,4 29,1% 5,6

Government Expenditure 249.093.761,4 7.931,0 46,6% 3,4

Fiscal Deficit -93.519.843,05 (2.977,6) -17,5% 0,0

GRANTS 30.402.000,00 968,0 5,7%

INTERNAL BORROWINGS (BOND) 5.465.000,00 174,0 1,0%

EXTERNAL LOANS 57.652.843,05 1.835,6 10,8%

93.519.843,05 2.977,6 17,5%

Fiscal Revenues 132.261.464,5 4.211,1 24,7% 4,5

Non Fiscal Revenues 9.404.990,6 299,4 1,8% 0,0

Consigned Revenues 8.221.231,0 261,8 1,5% 0,0

Capital Revenues 3.187.402,7 101,5 0,6% 0,0

discrepanc.? 2.498.829,6 79,6 0,5%

Total Revenue 155.573.918,39 4.953,4 29,1% 5,6

0,0 0,0%

Current Expenditure 144.553.867,8 4.602,5 27,0% 3,2

Investment Expenditure 104.539.893,6 3.328,5 19,5% 3,7

internal component 46.260.338,4 1.472,9 8,6% 8,9

external component 58.279.555,3 1.855,6 10,9% 0,0

Total Expenditure 249.093.761,4 7.931,0 46,6% 3,4

GDP 2014e 534.998,00 17.034,0

MZM/USD 31,4


Thank you


Nota

Este documento foi preparado com base em

informação de fontes que o Grupo Standard Bank

acredita e são confiáveis. Apesar de todo o cuidado

ter sido tomado na elaboração deste documento,

nenhum analista ou membro do Grupo Standard

Bank fornece qualquer garantia ou aceita qualquer

responsabilidade sobre a informação contida neste

documento. Todas as opiniões, previsões e

estimativas contidas neste documento podem ser

alteradas após a sua publicação e a qualquer

momento, sem aviso prévio. O desempenho histórico

não é indicativo de resultados futuros. Os

investimentos e estratégias discutidos aqui podem

não ser adequados para todos os investidores ou

qualquer grupo particular de investidores. Este

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apenas para clientes do Standard Bank ou potenciais

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Copyright 2015 Standard Bank Group. Todos os

direitos reservados.

Disclaimer

This research report is based on information from

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reliable. Whilst every care has been taken in

preparing this document, no research analyst or

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accepts responsibility or liability as to the

accuracy or completeness of the information set

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