This is a best prospect industry sector for this country. Includes a market overview and trade data.
Even though the construction sector stands as a backbone for Mozambique’s economic growth and has hitherto attracted huge investments to support the operations of megaprojects within the past decade, it remains underdeveloped by global standards. Currently, infrastructure investment is mostly channeled to development corridors and urban centers, while two-thirds of the population resides in rural areas. In support of this needed upgrade, Mozambique plans to increase annual public investment by an estimated 11% of the GDP to achieve parity with other countries. Analysts predict that building infrastructure expenditure will rise amounting to $6 billion per year by 2025, driven by natural gas exports. However, these plans have been overshadowed by the recent insurgency in the north of the country, damage from floods and cyclones, and the pandemic-fueled economic recession.
Historically, most construction activities were carried out by Portuguese companies and targeted a portfolio of civil and public works. The sector has grown to include energy, transportation, and ICT projects initiated by various international corporations. Chinese companies saw market share growth over the last decade, leading projects in housing, roads, sports facilities, airports, and government buildings, in addition to Africa’s longest suspension bridge spanning the Maputo Bay to connect Maputo with Katembe, which opened in 2018. Other major competitors come from Brazil, South Africa, and Turkey.
Financing remains a major drag on investment and growth as the government struggles to raise capital for infrastructure projects in the country and international financiers shy away from offering loans. Ambiguous public-private partnership (PPP) rules, concession laws, and regulatory frameworks hinder private sector capital investment. Additionally, the economy is further hampered by complicated bureaucratic processes and a lack of communication among institutional and private players. Finally, as in other sectors, Mozambique’s design and construction industry lacks skilled labor.
Low-Cost Residential Solutions
Almost half of the population lives under the poverty line and cannot afford adequate housing. The Government of Mozambique offers housing and construction finance through public-private partnerships. However, most housing is funded through short- and medium-term consumer loans. Additionally, depending on the availability of the land, large-scale projects may be responsible for implementing resettlement plans to restore and improve the lives of the displaced. The government’s reconstruction authority states that 300,000 households were damaged by the cyclone in Beira and are yet to be resettled.
Commercial and Institutional Buildings
Mozambique experienced a real estate boom fueled by economic development and a wave of people moving to urban areas. The growth of the middle class in urban areas has triggered great demand for retail and office complexes as well as residential buildings.
Previously, the Government of Mozambique funded the modernization of its ministries and institutes. However, such funding stalled following an economic crisis in 2016 and is expected to bounce back once the overall economy improves. Most projects are developed and financed by the local private sector and development finance institutions.
Sustainable And Resilient Infrastructure
Due to its coastal position and growing effects of climate change, Mozambique is vulnerable to natural hazards, including cyclones, floods, and coastal erosion. Currently, Mozambique is still working to recover from damage sustained by Cyclones Kenneth and Idai, which ravaged the middle of the country in 2019. International donors allocated $1.2 billion towards repairing the damage from cyclones, but the government estimates that $3.2 billion will be required to conclude adequate restoration. Further, it seeks to improve climate resilience and mitigate risk by improving infrastructure. National projects range from installing prefabricated modular steel bridges and constructing dams water reservoirs to closing unsafe landfills – which are prone to landslides - in favor of more modern waste disposal systems.
Water and Sanitation
According to UNICEF, only half of Mozambicans have access to improved water supply and less than a quarter (one in five) use improved water sanitation facilities. However, discrepancies persist in water and sanitation access between people who live in rural and urban areas. Furthermore, the COVID-19 pandemic increases demand for improved sanitation in public institutions including hospitals and schools. The Mozambique government committed to universal access to safe drinking water, sanitation, and hygiene services by 2030. Such efforts involve transforming water systems from wells, boreholes and traditional latrines to small scale water management and treatment infrastructure. Additionally, the Government of Mozambique announced its National Urban Water Supply and Sanitation Strategy which targets to commit US $ 1.8 billion to establish urban water infrastructure projects within the years 2022-2032. Projects include treatment and desalination plants, transmission mains, distribution centers as well as a pump station.
Hospitality and Leisure
Mozambique aims to develop its bountiful tourism assets, which include coastal lowlands, pristine beaches, and bio-diverse areas, well as a mix of African, Mediterranean, and Indian cultures. Although the sector has seen major losses due to the COVID-19 pandemic and travel limitations, the government aims to transform the country into a major tourism destination
- New and second-hand construction equipment and machinery
- Road and railway maintenance equipment
- Low-cost housing construction technology
- Engineering, procurement, and construction (EPC) Contractors
- Quality control and safety consultants