February 21, 2008

Foreign investment rules to be liberalised

Mozambique has announced it would liberalise foreign investment rules and offer more incentives to investors in a bid to boost overseas inflows by 50 percent to $12 billion in 2008. Mozambique recorded $8 billion in foreign investment last year. "We expect to attract more investors this year than in 2007," Planning and Development Minister Aiuba Quereneia said. "We will offer attractive fiscal incentives and simplify the investment process, particularly in agriculture, tourism, and mining." Greater inflows would help Mozambique hit its seven percent GDP growth target for 2008 and allow it to limit inflation to within single digits, he added. The economy grew by 7.5 percent in 2007.
The country's natural resources and tourism potential are likely to remain the main draw for foreign investors. A number of Western oil firms are drilling offshore in Mozambique's Rovuma Basin. Canada's Oslo-listed Artumas Group Inc, U.S.-based Anadarko Petroleum Corp, Petronas of Malaysia and Italy's ENI have been active in the basin. Mozambique is also hoping to lure offshore investment for a planned upgrade of the Cahora Bassa hydro-electricity development in northern Tete province, which was badly neglected during the civil war. Cahora Bassa has the potential to produce 14,000 MW of hydropower, but it currently only has output of 2,075 MW. Most is sold to South Africa and Zimbabwe. (rts)

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