‘Every Continent Needs an America’ The Experience of South African Firms Doing Business in Mozambique

The report examines South African foreign direct investment (FDI) in Mozambique, highlighting the country as a primary destination for South African capital. While mega-projects like the Mozal smelter and Sasol pipeline have boosted GDP and investor confidence, smaller firms face significant hurdles including corruption, red tape, and a weak legal system. The document analyzes the socio-economic impact of this investment, noting improvements in productivity and wages but limited linkages with local businesses and a concentration of wealth in the south.

• South Africa was a dominant investor in Mozambique between 1997 and 2002, accounting for 49% of the total foreign direct investment (FDI).
• Large-scale 'mega-projects' have significantly enhanced business confidence and economic growth; for instance, the Mozal aluminium smelter alone contributed approximately 2.1% to real GDP growth in 2002.
• There is a stark divergence in the business experience based on company size: large investors often benefit from fiscal incentives and government support, while small businesses are more exposed to petty corruption and bureaucratic harassment.
• The Mozambican business environment is perceived as unfriendly by over 80% of surveyed South African firms, primarily due to corruption, red tape, and an inefficient bureaucracy.
• Linkages between South African FDI and local Mozambican businesses remain limited because the investments are typically capital-intensive and knowledge-based.
• Investment is heavily concentrated in the south, particularly Maputo, creating a geographic economic divide where GDP per capita in Maputo is six times the national average.
• The Mozambican legal system is considered weak, with courts susceptible to bribes and a slow resolution process that can take up to 540 days for a case in Maputo.
• High import duties, including a 17% VAT and up to 25% import duties on consumer goods, increase prices for consumers and encourage smuggling.
• The financial sector is characterized by high credit risk, a lack of shared automated banking platforms, and a high ratio of non-performing loans, which stood at 21% at the end of 2002.

APA

Grobbelaar, N. (2004). ‘Every Continent Needs an America’ The Experience of South African Firms Doing Business in Mozambique. South African Institute of International Affairs. https://saiia.org.za/wp-content/uploads/2013/06/biap_rep_02_mozambique_report_2004_en.pdf

Chicago

Grobbelaar, Neuma. ‘Every Continent Needs an America’ The Experience of South African Firms Doing Business in Mozambique. South African Institute of International Affairs, 2004. https://saiia.org.za/wp-content/uploads/2013/06/biap_rep_02_mozambique_report_2004_en.pdf.

Wikipedia

{{cite report |last1=Grobbelaar |first1=Neuma |title=‘Every Continent Needs an America’ The Experience of South African Firms Doing Business in Mozambique |publisher=South African Institute of International Affairs |date=2004 |url=https://saiia.org.za/wp-content/uploads/2013/06/biap_rep_02_mozambique_report_2004_en.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{grobbelaar2004every, author = {Grobbelaar, Neuma}, title = {{‘Every Continent Needs an America’ The Experience of South African Firms Doing Business in Mozambique}}, institution = {South African Institute of International Affairs}, year = {2004}, url = {https://saiia.org.za/wp-content/uploads/2013/06/biap_rep_02_mozambique_report_2004_en.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }