Identifies common practices to be aware of when selling in this market, e.g., whether all sales material need to be in the local language.
Mozambique is a Portuguese-speaking country, but English is commonly spoken by the business community in Maputo and Beira. It is much less commonly spoken in the business community based in other towns/cities or in the northern provinces, where many people speak local languages. Though the ability to speak Portuguese is not required for success, it is a major advantage. Most businesspeople respond better to Portuguese promotional materials and generally require that contracts be done in Portuguese. The Government requires labeling in Portuguese for specific consumer products such as medicine and child formulas and has plans to expand Portuguese language labeling requirements to all foodstuffs.
Access to credit is often difficult and expensive in Mozambique and affects the ability of resellers to stock inventories or to make purchases. Letters of Credit (L/C), export credit financing, or other financing solutions are quite common.
U.S. firms are advised to network with industry stakeholders to learn about the market and engage with decision makers. Private entities, as well as government agencies, typically take long periods of time to make decisions. It is important that U.S. firm’s follow-up and remain persistent in order to obtain results. Networking opportunities include local and regional trade fairs and exhibitions organized by trade organizations. Industry-specific conferences are also hosted by government ministries or municipalities with the goal of highlighting business opportunities and seeking investment.
Trade Promotion & Advertising
The most used advertising mediums are television, print, and radio. Due to low literacy rates (59%), visual and audio advertising are the most effective for consumer products. Billboards and television are the most common media used to target buyers in urban cities. Mass marketers rely on radio to reach target groups located in remote areas. Print media – newspapers and magazines – can be effective in marketing to literate market niches. Web advertising is the least expensive and is growing, fueled by the growing number of internet users. U.S. companies interested in building a brand presence in Mozambique should work with advertising agencies to identify the most appropriate solutions.
Prices are generally determined by market forces except those for petroleum and certain agricultural products, which are fixed by the Government of Mozambique. Variable costs such as import duties and transportation play a key role in defining prices. Import duties on goods range from zero to 25%. But products imported from within the Southern African Development Community (SADC) may be exempt.
Mozambique operates under the value added tax system (VAT); a 17% rate is attributed to the product at the point of sale.
Before doing business in Mozambique, consult with local tax consultants and customs agents on how custom duties and VAT will impact the cost of goods. For more in-depth information on import duties, contact the U.S. Commercial Service.
Sales Service/Customer Support
Increased competition is creating demand for better service. Foreign companies are increasingly making inventory and technicians available to service their sales in Mozambique. Such services can be a competitive advantage and help build a good reputation with both resellers and consumers.
Local Professional Services
For information on local providers of consulting, marketing, event management, legal, tax, and financial services consult the U.S. Commercial Service.
Principal Business Associations
The major business associations that are relevant to U.S. companies are the American Chamber of Commerce Mozambique (AmCham), the Confederation of Business Associations (CTA) the Chamber of Commerce of Mozambique (CCM), and the Mozambican Business and Industry Association (ACIS). CTA is the largest and most influential of these.
It is important to note that local business and association leaders may be closely linked to the political elite and thus have conflicts of interest with certain business sectors. U.S. companies are advised to conduct due diligence before committing to a partnership.
Limitations on Selling U.S. Products and Services
There are no limitations specific to U.S. products and services, though the Mozambican Government is establishing a local content law that require foreign companies to have a local partner. As of 2020, this law has not been approved by the Government, however the law is not specific as to what constitutes a local partner.