In search of a new balance:

Sweden wants corporates to start dating Mozambique

open | 22 November, 2011

Who would think, 20 years ago, that a Swedish export promotion office would bother about Mozambique, one of the worlds poorest countries?

At the time the division between Swedish aid officials and Swedish exporters was notoriously sharp. A sort of Cold War situation right in the midst of the Swedish Government. A reflexion of the division of interest among Swedes - many would argue at the expense of what was good for Mozambique.

But, now, in a fast changing world, with old school aid being loosened up and mixed up with business interests, it is finally happening. A trade seminar on Mozambique is being held by the Swedish Trade Council in South Africa to promote business in one of Africa's fastest, albeit from a very low level, growing economies.

 "In 2010, Mozambique outperformed its neighbors as the economy grew by 8,1%. Further high growth and heavy inflow of foreign aid and Foreign Direct Investments (FDI) is expected to foster infrastructure development and create opportunities for Swedish suppliers of goods and services. Mining and Agriculture are heavily expanding sectors that drive the economy and promote major investments also in the Energy, ICT and Transport sectors", the Swedish Trade Council, led by Håkan Bengtsson, writes in its invitational online brochure.

On the country to country level figures are also rosy, Swedish trade rose by 36 % during the first six months of 2011, but yet again, it is all from a very low level: Swedish Export in 2010 stood at 57 Mkr which is 0.01 % of Sweden's total export.

So which trade strategist in his or her right mind would bother about that kind of minnow? Waste of time?

The Swedish Trade Council doesn't think so, partially as it has promotion money from the Swedish Development Agency Sida to build a partnership with Mozambique. And as a good consultancy, Swedish trade councils are dependent on external consultancy incomes, it does what it is paid for.

If Swedish business will be interested remains to be seen. Former Swedish Ambassador's to Mozambique and the country's Government have always had a bit of an uphill struggle to get Swedish companies to Mozambique.

Its understandable that those who are selling consumer- and industrial goods haven't been overexcited. Mozambique's economy is indeed miniscule compared with its big brother South Africa. And it is fraught with corruption and byzantine commercial law. Buying property in Mozambique is to this day a no no. If yo don't want to get involved in years of legal wrangling that finally only will get you a a 99-year leasehold at the best. On top of that Swedish export companies are quite well updated on Mozambique through their regional offices in South Africa.

However what has been evident and well known among Swedes who have operated in Mozambique is that the country is bursting with fabulous mostly unexploited wealth - it is all well recorded and has been know way back to the Sixties when a large amount of feasibility studies were done.

While some Swedish companies, in particular ABB since it built Cahora Bassa in the Sixties, have kept its eyes wide open most have not bothered to go there. A civil war - fueled by apartheid South Africa - that raged up until the early Nineties, natural- and man made disasters leading to desperate poverty, was just not a very attractive mix for exporters.

But the situation has changed quite dramatically. Mozambique has picked up and is reestablishing itself. Infrastructure is being repaired. Regional trade- and investment from South Africa has given the country a new boost. And on top of that, most importantly, emerging economies in the South - China, India, Brazil - are showing a very active interest in Mozambique.

Some would say the comparative advantage Sweden had when it financed a large chunk of Mozambique's development budget has been lost. Sweden could have cherry picked among Mozambique's vast natural assets such as coal, gas, hydropower, agriculture and water resources, has been blown.

Other donors have been more pro-active. Britain even under Thatcher was a big donor to Mozambique. And some British companies, such as British Sugar, have benefitted and invested in vast sugar plantations.

Others would say 'its never too late'. And in today's situation Mocambiques growing economy is more suitable for advanced Swedish products and services - Swedish export is not very well tuned to deal with exploitation of natural resources.

A new cosy feeling for Mozambique is evident. You can't just sit back and do nothing as South-South trade is growing by leaps and bounds. So in that sense Mozambique has finally arrived. It is no longer seen as a hopeless aid basket case.

For old Swedish aid hands. all those thousands of Swedes who have worked in Mozambique over the past 30 years this should be good news. And Swedish business could make good use of them.

The Sweden-Mozambique trade seminar, moderated by Swedish Ambasador Ulla Andren and trade commissioner Håkan Bengtsson, is held on 1 December in Johannesburg. From the Mozambican side a number of representatives of 'key' ministries - energy, Infrastructure, agriculture and mining - are presenting their case.

(More info from Olov.hemstrom@swedisthrade.se and and karin.bolin@foreign.ministry.se
)

Africascan comment