Mozambique, A Promising Option For U.S. Exporters
This episode of Export Nation features Tammy Murrietta, a senior commercial officer based in the US Embassy at Maputo, Mozambique. Murrietta discusses opportunities, challenges and the unique selling points Mozambique offers to U.S. exporters.
Are you interested in doing business with Mozambique?
During the podcast, Murrietta briefly mentions the Official Post Reconstruction Virtual Trade Mission to Mozambique and Zimbabwe, which is meant to highlight the reconstruction needs of these countries to U.S. suppliers and service providers. Areas of reconstruction include rebuilding after devastating cyclones, civil and political unrest and devastating effects of COVID-19. These events have a direct impact on Mozambique and Zimbabwe resulting in USD billions in destroyed infrastructure. Learn more about the trade mission here.
For more information on the trade mission reach out to Office.maputo@trade.gov.
Episode Transcript
Mozambique, A Promising Option For U.S. Exporters | Transcript Date: April 8, 2021 | Duration: 39:13
Speakers: Derrick Small, Tammy Murrietta
[music]
[00:00:01] Derrick Small: On this episode of Export Nation, we speak with Tammy Murrietta, Senior Commercial Officer based in the US Embassy at Maputo, Mozambique, where she leads a team dedicated to helping US businesses enter and navigate the Mozambique market. Hey, good morning. Thank you for joining Export Nation. I’m really excited to have you on. You’re actually the first overseas specialist we’ve had on the program. I would love it if you could tell us a little bit about yourself and what you do?
[00:00:39] Tammy Murrietta: Well, thank you, Derrick. I’m honored to be the first. My name is Tammy Murrietta. I’m the Senior Commercial Officer here at the US Embassy in Maputo, Mozambique, a small southeastern nation at the lower part of the African continent. My role here, I help lead our incredible commercial service team in supporting American companies who are interested in investing in the country, entering the market, expanding, potentially dealing with trade barriers needing advocacy, and other great services and support.
[00:01:23] Derrick: Wonderful. How many posts have you been to?
[00:01:30] Tammy: Well, this is technically my second post, I’m just finishing, I’m headed to my next post in a couple of months. Prior to joining foreign service, I lived in a couple of other African countries. This is now my fourth African country. I’ve also had opportunity to live in India and London as well. I’ve really been able to get out there and get a better understanding of what American companies need on the ground.
[00:02:09] Derrick: Wonderful. What was the post before? Are you able to talk about it, if not —
[00:02:12] Tammy: Oh, absolutely, yes. I was at the commercial attaché at the US Embassy in Nairobi.
[00:02:18] Derrick: Well, tell me a little bit about Mozambique, and maybe what potential exporters looking to enter Mozambique should be thinking about?
[00:02:31] Tammy: Sure, absolutely. Mozambique, as I said, is a country in the southern coast of Africa. It borders South Africa, Zambia, Zimbabwe, Malawi, and Tanzania. It’s a very long coastline, almost as long as the coastline of California. It has five ports. It’s an incredibly well-positioned country, especially in regards to some of the neighboring countries that I just named. As an African country, it used to be under Portuguese rule. It was a Portuguese colony, and they gained their independence in 1975. They still have very close connection with the country of Portugal, and there’s a significant Portuguese community that is here.
That being said, the main language is Portuguese, European Portuguese. That puts them at an incredible position, and also can be a bit cumbersome for some of the neighboring countries and for some US companies that are interested in distribution of course, and I can get a little bit into that later. Incredibly well positioned, a beautiful country has incredible resources. There’s lots of mining activity, a lot of agriculture activity, most importantly and very notably is the activity for natural gas. Natural gas was discovered in the country a little over a decade ago.
American company, Anadarko, won the contract with the government to explore the natural gas blocks and to set up a camp and develop them. Anadarko was able to reach their final investment decision in 2019 - a multi-billion dollar project. The largest project on the continent, and the largest of FDI in Sub-Saharan African history.
It’s incredibly memorable. Now they are resting on this resource. As the project is being developed, when the gas eventually does come online in few years can really push this country, which is a least developed country into middle-income status.
[00:05:12] Derrick: That’s an amazing client story. I’m interested, you mentioned Portuguese, would you say that’s the main unique difference? I know there’s this view of making sure people don’t view Africa as a monolith, as one thing. Would you say that’s the main unique difference between Mozambique and other African countries? Or what would you say was the unique proposition Mozambique offers to clients?
[00:05:42] Tammy: Well, that’s a great question. Yes, Africa is not a monolith. Every country is different. Within the country, there could be dozens to hundreds of tribes and dialects, internally, different culture, different business cultures. Additionally, with colonization that presented other cultures and other languages into the mix. To answer your question, yes, I think Portuguese is one of the main differences for Mozambique in relation to other African and Sub-Saharan African countries.
I would say, considering that the country had former communist ties, that also is a difference from some other countries as well. I would say the Portuguese relationship, and only recently having come into a market economy would be interesting, considering if you were to compare it to its neighbor, South Africa. It’s a lot different in that regard as far as development goes and overall within the country and throughout very limited development. There’s less of a population than many of the larger economy African countries like in Nigeria or Kenya, or South Africa.
That plays a role. There’s not an incredible amount of buying power here as maybe those countries I just named. Its value proposition is going to be a little different. The long coastline, the Maritime opportunities to access to neighboring countries is key. They continue to work on building up their infrastructure, and their connections to the neighboring countries. Then you consider wider African collaborations and trade tools. You look at the African Continental Free Trade Agreement. Mozambique has not yet ratified this agreement as many African countries have not, but there is potential there in the future if and when they do decide to ratify with the neighboring countries.
The buying power potentially with that ratification will grow substantially to all that is within the African Continental Free Trade.
[00:08:46] Derrick: Got you. What US companies would you say are good fits for attempting to enter the Mozambique market?
[00:08:56] Tammy: That’s a really good question, Derrick. I would start out by industries. Some of the stronger industries in Mozambique are agriculture, agri-business, energy. Of course, not only encompassing the natural gas projects that I mentioned previously but also they have an incredible amount of natural resource energy. According to Power Africa, they’re actually the number one country for natural resource energy opportunities out of all of Sub-Saharan Africa. There’s a lot of renewables. Power generation generally is something to look at here.
Infrastructure also is an area to watch. Port logistics, port management, distribution, logistics generally. Also, some other sectors, health care, and ICT are also emerging. I would say that companies that have reliable products and services in those key sectors are going to see more opportunities, primarily because the government is focused on those industries in those sectors, and they need the dollars, the financing to support them which means that they’re going and working with the development banks, and other financing institutions.
As they continue to do that, those opportunities come into play, and then there’s a procurement pipeline. The government focuses on those, and we see those as some of the strongest opportunities for American companies. For small, medium-sized companies, there can be additional challenges and in a country like Mozambique. That’s one of the reasons that our offices here, is to support SMEs, to support larger companies even in their interests. We can answer your questions.
We can help find you a local partner who is well connected, and is vetted, and speaks the language, and understands the culture, and knows the updates on the projects or the particular industries I mentioned and the news. We can help again with advocacy and addressing any trade barriers that may come up. We put out quite a bit of market intel reports from our office. Our local engaged staff are experts in their fields, and they draft up the most up-to-date market intelligence that you can find in several different sectors. If you were into ICT, we have market intel from the last few months on that energy, the last few months infrastructure, last few months.
You can find some reliable input to help your decision-making. I would say SMEs are certainly going to benefit from our support, particularly in a market where you may need a little bit more guidance and support to move forward.
[00:12:27] Derrick: Would that be your first step with an American business that gets in contact with you, taking them through some market research, or what services do you recommend, generally? If there is such thing as recommending a service generally, I mean.
[00:12:48] Tammy: Well, that’s a really great question. We obviously work in tandem with our US export assistance centers. For a US company, wherever you’re based, we have a domestic office that is linked and will support you and answer your questions. They’ll help discuss with you whether or not you are market-ready, what markets you’ve maybe been to before. They will work with you on that initial phase, and if it seems like Mozambique is a potential market for you, they will reach out to us and we will discuss setting up a time to have a conference call, so we can get a better understanding of what your product is, what your service is.
Does it make sense for this market, and why? This is an incredible opportunity to speak one on one with one of our local staff who will give you their expert advice on what the market’s looking like now, what that sectors look like now, some of the opportunities, and if really, they’ll tell you the nuts and bolts. Does this make sense for your company today? Will it make sense tomorrow? If not, why? If so, what can we do next? The first step with the SME would work with their local domestic office, and then they’d reach out, and we’d set up a call and go from there.
With regard to what services, it really varies. Some companies in our market are very interested in finding a local partner. As I mentioned before, having someone that speaks the language, that is Mozambican, who understands how Mozambique works is usually a really good idea. You also want to consider local content policies and other things in history and such. It’s a good idea to find a local partner. We get a lot of requests for that. We also get requests for a single company promotion services, so we can help get the word out about your service, about your product to a very specific audience.
Of course, the famed and flagship Gold Key Service, also one of our highly requested services. We will have one of our local experts who will go with you either virtually or when we start moving again, post-COVID will go with you in person to meetings. They can be with ministers, they could be with other private sectors, it could be with local banks. They will go with you and set up a schedule, what’s appropriate for your particular objective.
[00:15:57] Derrick: Great. Has COVID-19 slowed anything down?
[00:16:02] Tammy: Yes. We have seen a slowdown in the economy due to COVID-19, not dissimilar to many countries but because of the informal sector here, that really hit home for quite a large amount of the population. Tourism is another really big industry for this country, as I said, a very beautiful country, significant coastline, because of the lack of tourists that greatly affected the economy. They are suffering. We’re hoping that as immunizations continue to come into the country, things will continue to stabilize for the economy. Another area to consider, which I haven’t mentioned yet, is a security insurgency in the north of the country.
This insurgency is actually around where the main LNG Project that I was referencing earlier, led by Total, French company, the insurgency is in that same province called Cabo Delgado, and continues to be an ongoing fight. You may have seen press clippings and heard about this in the news. It’s devastating to all the people of Mozambique and to the American people. We can see a delay and an effect, particularly for the LNG Project, in relation to this insurgency, which is disappointing for many reasons. These projects create thousands of jobs for Mozambican citizens.
In order to get this project going, you have to build roads, you have to build infrastructure, you have to build housing for the families. This is a great opportunity to build out the city and to, again, create jobs and create a foundation to move into a new era for the country’s economy. Unfortunately, the insurgency threatens that. I would say between COVID and the insurgency, the economy is not as strong as it once was. There was a point where between 7-8% growth in GDP, and that is exceptional. We’re now seeing that drop quite significantly.
We do have a recent 2020 country commercial [sound cut] put out that outlines all of the changes and projected changes in GDP and economic growth for those who want a little bit more information.
[00:19:18] Derrick: Thank you for bringing that up because, I’m glad we didn’t gloss over it. Would you say that— should companies still look at Mozambique right now. What would you suggest?
[00:19:33] Tammy: Companies that are still interested in Mozambique, there are opportunities here, there are significant opportunities here. I would continue the same line reaching out to our office, we can help connect you with a local partner or local consultant, continue to read the market intelligence reports, and our country commercial guide to give you a little bit more of a feel of what’s happening in the market, what’s happening in the industry, and think a little bit about how that relates to what you can offer and what you’re able to do.
Sometimes, the biggest fears about coming into a country like Mozambique, or several African countries, is the level of difficulty. I understand these are frontier markets, and on the front end, it can be maybe more work and more effort than a European country for example. The return on investment, if you are successful, tends to be stronger. That is the purpose of our office. I would recommend that companies that are interested in Mozambique or interested in a country like Mozambique or the size, or African in general, continue to explore the country.
The country continues to be supported and moving forward on major projects, major infrastructure projects, new port projects, transit corridor expansions, major power generation projects. There’s a lot happening, a lot of decisions are being made mining, et cetera. There’s definitely opportunity there. Something to also think about for those companies that have products, this is not the only African country that speaks Portuguese. If you have products in Angola or you’re interested in another African country, there are opportunities.
If you have Portuguese labels, and you want to send your product to more than just one country, it could be profitable for you a value-added to your plan. Angola is an option, São Tomé e Príncipe, Cape Verde. These are all African Portuguese-speaking countries. If you’re already working with Portugal, that’s also an easy opportunity. Portugal is one of the largest exporters to Mozambique. If you have any involvement in South Africa, South Africa, again borders Mozambique, and the capital Maputo where I sit and where our office is only a one-hour drive from South Africa.
A lot of the major products and distribution hubs that you’ll see with, particularly the American companies, fast-moving consumer goods, and such, come over the border as opposed to coming through the port. If you have products or if you have a hub in South Africa already, something to think about to extend over to Mozambique.
[00:23:12] Derrick: Thank you. I was wondering, maybe if you could talk about your work or your office’s work with Acrow.
[00:23:19] Tammy: Absolutely. Paul is a fantastic person. He is very knowledgeable in Africa, and he always knows what his company Acrow Bridge’s needs are. Paul Sullivan and our team met more than two years ago. We had some conversations verbally. He decided to come to the US-Africa Business Summit in 2019, again, organized and hosted by the Corporate Council on Africa, and the Government of Mozambique. We had an opportunity to meet him in person there, to do some counseling, to answer some questions.
Then we were able to introduce him to a minister for him to have a meeting, and talk a little bit about what he is interested in Mozambique, which is obviously, of course, bridges. He had a great conversation with minister. There was a lot of interest from the Government of Mozambique, about moving forward with projects related to post-reconstruction. When I say post-reconstruction, Mozambique was hit by the worst natural disaster to hit the Southern Hemisphere in decades, and that was Cyclone Idai. They were also two weeks later hit by one of the worst natural disasters to ever hit Southern Hemisphere, which is Cyclone Kenneth.
It pummeled to the center of the country, particularly the city of Beira in the Sofala Province, and other neighboring provinces. Around that time, there was a need for many things, emergency bridges, rebuilding of roads, cleanup, et cetera. The Government of Mozambique started to get pledges of support from the international community and really started trying to identify and prioritize where there needed to be focus. They needed to rebuild bridges that had washed away due to the cyclone.
The African Development Bank financed a project and with our support, believe our advocacy, Acrow did win. They successfully supplied 26 bridges to the Government of Mozambique. Within a matter of months, the government has the bridges, they’ve been delivered. We’re very pleased to have been able to support Acrow and the government and this initiative. The bridges were really washed away. There are pictures that circulated of several bridges of completely broken down infrastructure, bridges just cut in half, with families, and villagers on one side, just looking over and just not knowing how they were going to live their day-to-day lives.
It’s amazing to be at commerce, where you can affect people’s lives by participating in a project that’s going to deliver emergency bridges where families can reconnect, and goods and food can be accessible, once again, to the families and the villages that were affected. It’s really a good news story all the way around. Of course, there’s always complications. Sometimes there’s more bureaucratic hurdles than in some other countries, which makes sense. This is a fairly new country. Some of the tenders and some of the procurement that you’re dealing with for, say, a natural disaster is possibly something that the government has not dealt with before or has not had to manage before.
Sometimes it can be as they work on next steps, and the administrative side gets sorted out. Additionally, policies change, policies are reformed. It’s important that we continue to update companies on the policy changes or potential policy changes that are coming about and how it can affect a company like Acrow, as they are looking at bidding on Development Bank-financed projects. Yes, all around, it may be a little bit more complicated and may not be as timely as may be expected or experienced in other markets.
Eventually, with our support, and advocacy, and involvement with the local and federal government here, our updates on crucial policy, addressing trade barriers, et ceter, we should be able to assist with that. In the Acrow case, we were able to assist and glad it worked out for everyone. We hope to do that soon again for another company.
[00:29:32] Derrick: Wonderful. That was a great story, hearing him speak about, the impact of the company and on bridges in general, as a connecting piece. Before I ask you about any upcoming opportunities, is there anything we missed that you think we should have touched on about Mozambique that we didn’t touch on?
[00:29:56] Tammy: Well, I would say potentially upcoming events that we are having. We have an official trade mission that we are bringing May 24th and May 25th. The trade mission is going to be virtual. However, we will have a US government official who will come to meet with the government, address challenges, continue to build cooperation, and represent the US companies. We would love for it to of course be 100% in person but due to COVID and COVID-related complications, it will be virtual.
Additionally, for companies that are maybe not interested in the full trade mission, which would include matchmaking, meetings with Mozambican companies, meetings with ministers here, and meetings with our high-level official, we have a smaller opportunity for a one-day conference where for $75, participants can listen to speakers and about the business climate and panels about opportunities. This particular trade mission is focused on post-reconstruction. This is not only post-reconstruction for cyclone assistance, this is post-reconstruction for anything. That could be civil or political unrest, that could be just deterioration of roads and infrastructure.
Additionally, we are also partnering with our US Embassy in Harare, Zimbabwe. This official trade mission is an executive-led trade mission to [sound cut] in Zimbabwe. I think one of the things to note here is, although we do have sanctions against 120 people and entities in Zimbabwe, there is still trade and investment that is going on between the countries. Our econ colleagues or economic colleagues, excuse me, in the US Embassy in Harare, are able to guide participants on what trade and investment opportunities there are and what can be done, and what cannot be done.
They’ll list out what opportunities there are and recent success stories. We will also have representatives from the American Business Association as well. This is a great opportunity for US-Mozambique relations, US-Zimbabwe relations, particularly on the trade and investment commercial business portfolios. If a company is interested, they can contact us via office.maputo@trade.gov and we can answer their questions and send them a registration link if they’d like to register.
[00:33:13] Derrick: Wonderful. I think that’s all I had. I really appreciate you taking the time to do this, I think it will give US businesses a good picture of Mozambique and the potential opportunities there.
[00:33:29] Tammy: Absolutely. Derrick, thank you for having me. Again, we’re so happy that Mozambique is being highlighted as the first. It may not be the first that most people would think but an incredible opportunity and a time to get into this country. We’re actually very pleased that we have a commerce office here to help support the American companies. Thank you for highlighting and giving our US-Mozambique relationship a chance.
[00:33:56] Derrick: The information provided in this podcast does not constitute legal advice. Thank you for listening to this episode of Export Nation, brought to you by the US Commercial Service. For more information on how you can get started exporting, please visit www.trade.gov.
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