Presentation given by Minister Pacheco about Agriculture in Mozambique. This presentation was made during a small event organised by Africa Matters Limited (www.africamatters.con) on 7 June 2012.

1. Agenda
 Why Invest in Agriculture In Mozambique
 Agribusiness Strategy and Corridor Attractiveness
 Agribusiness Opportunities in Mozambique
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2. Mozambique at a Glance
Mozambique is a stable, high economic growth country with substantial agricultural
potential
Demographics (2010)
 Population: 23.4 million
Cabo  Capital: Maputo
Niassa Delgado  National Language: Portuguese
 Business Languages: Portuguese & English
Nampula
Tete
Land and Climate
Zambezia
 Area: ~80 million ha
Sofala  Arable Land: 36 million hectares
Manica  Climate: Tropical to Sub-Tropical
Key Economic Indicators (2010)
Inhambane  Currency: Metical, Abbreviation: MZN
Gaza  GDP: USD 9.59B
 GDP per Capita: USD 410
 Projected Annual GDP Growth: almost 8%
Maputo
per year average until 2015`(One of the fast
growing economy in the World)
Source: IMF World Economic Outlook Database, September 2011; World Bank
 Agriculture Contribution to GDP: 23%
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3. Mozambique: A Nation of Potential
The country’s potential can be captured in four key areas
 36 million ha of arable land, mostly unutilized
 Tropical to sub-tropical climate with fertile soil and ample
rainfall
 Tremendous irrigation potential from major rivers
Excellent
 Significant private Agro-  Strong and growing
sector Ecological economy
investments Conditions
 Reliance on imports:
 Major Enabling
Strong Large import
infrastructure Environmen
Market substitution
investments t for
Dynamics opportunity
 Numerous Investments
innovative public- Governmen  Coastal position:
private-people t Access to
partnerships Commitmen international and
t to Market- regional markets
Driven
Growth
 Agricultural development seen as critical to country’s development, with
activities across sectors focused on 6 agriculturally attractive corridors
 Government business incentive programs
 Specific organizations set up to organize and assist investors
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4. Excellent Conditions for Agriculture
Mozambique boasts ideal growing conditions – plentiful water supply combined
with diverse micro-climates support a broad range of agricultural commodities
 Major rivers such as Zambezi,
Limpopo, Save, and other tertiary Land Suitability
rivers offer tremendous
Utilization of Arable Land irrigation potential
36.0 5.4
EXTENSIVE WATERWAYS
15.0% 30.6
Million Hectares
VAST High 10 DISTINCT
UNUTILIZED Agricultural AGRO-CLIMATIC
85.0% ARABLE Potential ZONES
LAND
YEAR-ROUND
PRODUCTION POTENTIAL
Arable Utilized Unutilized Suitable for rainfall
Land
 Tropical climates offer agriculture
potential for year-round, Moderately suitable for
high yield crop production rainfall agriculture
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5. Strategic Location
Mozambique has an advantageous geographic positioning, providing an ideal
gateway to both international and regional markets
Mozambique: Proximity to High Opportunity Markets
 Natural gateway
to the Middle
East,
Mediterranean,
and Asia
Mediterranean  Bordering regional
markets like South
China/ India Africa, Zimbabwe,
and Malawi
 Port upgrades at
Middle East Nacala and Beira
will further trade
opportunities
Neighboring
Countries
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6. Innovative Agricultural Partnerships
Innovative public-private partnerships to transform Mozambique’s agriculture are
being implemented
Examples of Successful Public-Private Partnerships Underway
 Beira Agr. Growth Corridor (BAGC) Partnership
– Catalytic Fund of USD 20M in publicly-backed investment for startup
agribusinesses
– First African country with a dedicated catalytic fund for agriculture
 AGRA + Standard Bank
– USD 25M loan guarantee facility
 GoM + World Bank
– USD 70M irrigation program (“Proirri”)
 USAID Agrifuturo
– Program to promote agribusiness
 Pro Savana
– Partnership between GOM, Japan and Brazil to develop agribusiness
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7. Agenda
 Why Invest in Agriculture In Mozambique
 Agribusiness Strategy and Corridor Attractiveness
 Agribusiness Opportunities in Mozambique
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8. Aligning Efforts Across Stakeholders
The four stakeholder groups of the Public and Private sectors along with People
and development Partners are key to developing Mozambique’s agriculture
potential
• Enabling • Expertise
environment • Markets
• Infrastructure • Commercial
• Research Financing
Public Private
Sector Sector
Mozambican Development
• Community
People Partners • Patient
support & capital
engagement • Skills and
• Human capital training
and capacity
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9. PEDSA: Strategic Plan for Agricultural Development
A ten-year agricultural strategic plan was developed to focus efforts and maximize
alignment of activities amongst these stakeholder groups
Summary of PEDSA, 2010 to 2019 Strategic Plan
Vision:
An integrated, prosperous, competitive
and sustainable agriculture sector
 6 corridors targeted: Align efforts across public, private, and development sectors through:
– Agricultural potential
– Support services (research centers, educational institutions)
– Connection to market (infrastructure)
1 2 3 4
Agricultural Infrastructures Land, water,
production and and services for forest and Agricultural
productivity to markets and wildlife institutions
increase ability improved resources used strengthened
to compete marketing sustainably
Four Discrete Pillars in Progress to Achieve Agricultural Vision
Source: Ministry of Agriculture
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10. Agriculture Growth Corridors
Investments in agriculture are organized in corridors. Nacala, Zambezi Valley, and
Beira corridors in north and central Mozambique display high agricultural potential
Three of which are being These corridors hold
Mozambique has
highlighted in the most of the country’s
identified six corridors
conference water resources
Six Corridors in Provinces within Beira, River Networks in
Agricultural Strategy Nacala, and Zambezi Valley Mozambique
Corridors*
Nacala Cabo
Niassa Delgado
Zambezi Valley Nampula
Tete
Beira Zambezia
Pemba Lichinga Manica Sofala
Inhambane
Limpopo Gaza
Maputo Maputo
Note: * Color coding represents approximate positioning of corridors
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11. Nacala Agricultural Growth Corridor
The government has focused significant resources and business-friendly
investment programs on the Nacala Corridor
Attractiveness of Nacala Investments Made
 Nacala Special Economic  Rei do Agro:
Nacala Zone provides 500 ha Mozambican company
Special industrial free zone with Soybeans
investing USD 5M for
Economic no VAT and customs soy and maize
Zone duties, as well as production
technical assistance  Green Resources: USD
2.2B eucalyptus
Forestry
 Upgrade of the deepest plantation and industrial
Nacala Port
Potential port on East African coast infrastructure
at Nacala
 Matanuska: USD 60M
 The mining sector is Bananas invested to date focused
increasing demand for on bananas
Demand from
agricultural products;
Mining
currently imported from  USD 4.4B upgrade to
Mining
South Africa at high cost rail by Vale
Source: Ministry of Agriculture
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12. Zambezi Valley Corridor
Zambezi Valley has the greatest agricultural potential, with the highest
concentration of the country’s water resources
Attractiveness of Zambezi Valley Investments Made
 80% of the country’s  Chinese government USD
Vast Water water reserves are found Agro- 50M investment for
Reserves in the Zambezi Valley Processing cotton, maize and rice
corridor processing facilities
 Diverse topography and  USD 70M World Bank
good rainfall during PROIRRI irrigation
Broad Crop Irrigation1
cropping season provides project, mainly aimed at
Variety irrigation for rice
perfect climate for a
variety of crops
 Olam is investing USD
Rice
50M over the next 4 years
 Local market potential
Large Local as one of the most
Demand densely populated Port  Estimated USD 1B port
provinces Infrastructure investments by Rio Tinto
Note: 1PROIRRI project is part of both the Beira and Zambezi Valley Corridors
Source: Zambezi Valley Development Agency
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13. Beira Agricultural Growth Corridor
Beira currently has the most developed infrastructure and linkages to neighboring
countries
Attractiveness of Beira Investments Made
 Well-developed  USD 20M for the BAGC
infrastructure with road Catalytic Fund
Infrastructure and rail network linking  First catalytic fund
and Catalytic
Zambia, Malawi, dedicated to agriculture
Connectivity Fund
to Region Zimbabwe and in Africa, which is already
Mozambique to the port leading to a number of
of Beira investments
 A number of multi-billion  USD 70M World Bank
dollar mining PROIRRI irrigation
Irrigation1
investments are going project, mainly aimed at
Demand from ahead, which will irrigation for rice
Mining
Activities improve access to
infrastructure in the  USD 67M from JICA and
region and boost local Beira Port EU for upgrades to the
demand Port of Beira
Note: 1PROIRRI project is part of both the Beira and Zambezi Valley Corridors
Source: BAGC
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14. Agenda
 Why Invest in Agriculture In Mozambique
 Agribusiness Strategy and Corridor Attractiveness
 Agribusiness Opportunities in Mozambique
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15. Commodities Analyzed
For the sixteen prioritized commodities, additional information is included in differing
levels of detail to supplement the investment cases distributed during the Forum
I
Rice Soybeans Banana Poultry
II
Sugar Cane Cassava
III Fruit Vegetables Maize Cashew Cotton Oilseeds
Pulses Forestry Aquaculture Livestock
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16. Commodities Analyzed
For the sixteen prioritized commodities, additional information is included in differing
levels of detail to supplement the investment cases distributed during the Forum
I
Rice Soybeans Banana Poultry
II
Sugar Cane Cassava
III Fruit Vegetables Maize Cashew Cotton Oilseeds
Pulses Forestry Aquaculture Livestock
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17. Rice
Executive Summary
 Major gap exists between domestic production and demand
 Climate and soil are very well-suited to rice, with
Market opportunities for year-round production
 Significant investment is underway, which may dramatically
improve current infrastructure and raise rice yields
 There are business opportunities in several parts of
the value chain as well as for an integrated producer
Investment  One of those opportunities is a medium-size milling
Opportunities
facility, which requires investment of ~USD 5M
 Would be supported by 3,000-5,000 smallholder farmers
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18. Rice – Market Analysis (1/2) Market
Rice consumption has doubled over the past decade, but without significant
reductions in rice importations
Growth Potential Production growth has not been able to overcome
demand growth – keeping imports high
 Mozambique has the 3rd highest rice Consumption of Rice
consumption in SADC, but is mostly (in ‘000 tonnes)
dependent on imported rice +90%
– Unlike neighbor countries, the share of 455
239
imports has not reduced over time and
instead remains around ~60% 2000 2009
– Despite the significant growth potential Share of Imported Rice on
for rice (Mozambique’s climate and soil Local Consumption
80%
are considered very well-suited to rice), 62% Gap:
60% Neighbor
domestic production has only grown
countries
at the same rate as imports 40% reduced
20% 9% imports to
 Without increased local production, this ~10%
gap will only grow due to a projected 7% 0%
2004 2005 2006 2007 2008 2009 2010 2011
domestic demand increase per year
Mozambique Zambia Malawi
Source: IRRI, FAOSTATS, USDA
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19. Soybeans
Executive Summary
 Demand for soybeans is increasing due to the
development of poultry and soy oil sectors
Market
 Downstream markets are highly dependent on imported
inputs
 High availability of natural resources may benefit
expansion of soybeans crop
 There are business opportunities throughout much of
the value chain, as well as for an integrated producer
Investment  A ~USD 4.5 M soy extraction & refining center
Opportunities was selected as an example, utilizing 3,500-4,000 hectares of
soybean fields as inputs
 ~1,400 smallholder farmers included into the supply
chain
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20. Banana
Executive Summary
 Opportunity to meaningfully increase Mozambique’s banana
exports
– Demand imbalances exist in the Middle East, the
Mediterranean, and to a lesser extent Southern Africa
Market – Year-round, high-yield crop potential within
Mozambique provides additional export opportunities
and improved margins
 Potential for lower farm costs than other competitors
 Value chain integration is the basis for an attractive
investment prospect
Investment
Opportunities
 Opportunity for an investment of $5–6M in a 300 hectares
commercial banana plantation leveraging nearby
producers to achieve scale at lower investment levels
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21. Poultry – Market Analysis
Significant Potential for Import Substitution Makes Poultry a Strong Investment
 Demand for poultry has grown meaningfully across Africa
– Poultry’s consumption has more than doubled in over 10 African countries over the last decade,
with high dependence of imports from Brazil, Asia, and US
– Opportunity for local players to supply this demand due to geographic advantages
 While domestic demand in Mozambique has grown slightly in past, future demand is expected to more
than triple in the next 10 years
– Impact of considerable growth in mining as well as oil and gas sectors on working population will
help full domestic demand
 Feed costs correspond to ~75% of total costs – with growth in the domestic soy cake industry, potential
for reduced input costs could further drive demand
African countries has reported meaningful Poultry consumption has grown less in Mozambique,
growth in demand for poultry meat but future growth is expected
Poultry Consumption in Africa 2000 Poultry Consumption in Mozambique
(in ‘000 tonnes) 2007
(in ‘000 tonnes)
+36% +164% +133%
+226%
1,228 +21% 137
904
145 35 42
55 24 57
South Africa Angola Zimbabwe 2000 2010e 2020e
Note: Djibouti, Comoros, Cape Verde, Ghana, Gabon, Gambia, Angola, Democratic Republic of the Congo, Zimbabwe, Congo, Sao Tome and Principe
and Guinea. Source: FAO, USAID, TechnoServe, Monitor Analysis
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22. Mozambique
Our Challenge is to Our Pride is to Our Destine is to
contribute towards increase food achieve global food
the victory against production and and nutritional
poverty. generate more security.
wealth.
THANK YOU
Contact Information:
Abdul Cesar Lourenço Sambo
Agricultural Promotion Centre Investment Promotion Centre
+258 82 300 2017 +258 21 313 310
abdulcesar@hotmail.com lsambo@cpi.co.mz
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