Despite the almost 10,000 kilometres separating Mozambique and Brazil, there are clear similarities between the two countries. Both can boast a tropical climate with an average temperature of 25 Celsius, and both constitute a fascinating blend of a Portuguese colonial past with strong indigenous influences.

However, there is one major difference: while 5.16 million tourists visited Brazil in 2010, the number of visitors to Mozambique was only 1.7 million. And while Brazil saw a 7% increase in tourist figures on 2009, Mozambique’s figures plummeted 28% over the same period. Yet Mozambican authorities remain positive, as they are confident that when the rest of the world overcomes its economic hardships, the east African country will be on travellers' radars.

Everything in place

"In terms of natural resources, we have all the ingredients to succeed: beautiful beaches, fascinating wildlife and outstanding scuba-diving facilities," Fernando Sumbana, Mozambican minister of tourism, tells fDiMagazine during an interview at his office in Maputo. However, Mr Sumbana adds that what really makes Mozambique stand out from other locations is its people. “We are very welcoming and open-minded and we want to make sure that visitors enjoy their stay here.”

Mr Sumbana believes that such a grassroots approach can also bring tangible economic benefits, as people who become familiar with Mozambican charms are more willing to establish their businesses there. “We already have numerous examples of people who arrived here for a vacation or conference, even without the clear vision of what to expect, deciding to stay here for good,” he says.

This is not, however, a technique that Mozambique is reliant upon. The country's proactive approach to FDI has brought about the enactment of bills granting incentives for investors such as five-year corporate tax holidays, with the customs-free import of materials needed to carry out operations for the entities established in industrial free zones. Mozambique has signed investment promotion and reciprocal protection agreements with other countries in southern and eastern Africa, along with others in western Europe and south-east Asia. Additionally, Mozambique's Investment Promotion Centre is keen to assure foreign businesses that the investment approval process is automatic within 10 days, if there are no objections raised.

According to greenfield investment monitor fDiMarkets data, this strategy has had the desired effect. In 2010, the number of FDI projects in the country increased by 50%, bringing with them a 185% year-on-year rise in job creation.

Success story

Mr Sumbana is already confident that Mozambique is in the midst of an economic development success story. “It is a very stable country in terms of politics, in terms of economic policy and in the social dimension,” he says. At the same time Mr Sumbana recognises that the country faces constraints on the road to economic growth. “Our banking system has limited liquidity and we need investments in the basic infrastructure.”

The latter is especially important to increase both investment in the tourism industry and number of visitors coming to the country. To tackle that issue, the Mozambique Ministry of Tourism selected seven projects dotted around the country which offer investment opportunities, both in the hotel sector as well as road, water and electricity infrastructure. 

“When we wanted to open our country for foreign investments there was no plan at all. About five years ago, we decided that the government should take a lead on deciding what types of projects we attract, to avoid a situation in which, in some pristine area, someone would come and establish low-quality services,” says Gildo Neves, general manager of the Mozambique Tourism Authority. One flagship project is already under way, as Brazilian conglomerate Odebrecht International is engaged in developing an airport near Nacala in the northern part of the country. The airport is expected to be ready for its first commercial flights by 2013.

On the map

Mozambique's capital city, Maputo, already boasts an impressive airport. The new state-of-the art international terminal was opened at the end of 2010. Currently, Chinese construction company Anhui Foreign Economic Construction is developing $70m domestic terminal. Maputo is also a popular destination for business conferences. With the string of hotels, ranging from luxurious Western-style Polana Serena and Southern Sun, Cardoso and Pestana Rovuma to comfortable villas in Girassol Indy, business travellers have plenty of choice when it comes to staying in Maputo. That is, if they are lucky enough to get a room.

The fact that a growing number of companies are eyeing up Mozambique as a potential site for investments has created a real bonanza for Maputo's hoteliers, with the room occupancy rate estimated at 70%. “These are very good times. If this trend continues we will have to expand our hotel base,” says Vasco Manhica, general manager of Pestana Rovuma hotel and vice-president of the Hotel Association of Southern Mozambique. “However, what we really need now is skilled staff. Training facilities catering for the hospitality industry would be a good business here,” he adds. The demand for workers in the industry will increase even more with the opening of the new 12-storey Radisson Blu Hotel scheduled at the end of 2011.

Whether the boom in the hospitality industry in Maputo will spread into other parts of the country remains to be seen. Right now, Mozambique appears to be something of a mysterious country, more appealing to adventurers than a mass audience. But sites such as the Radisson Blu hotel or the new airport in Maputo show that the foundations are there for the country to move up to the next level when it comes to both FDI and tourism.