The Potential of Mozambique

The British sent a Frigate out to enforce the closure and then the Civil war with Renamo did the rest. When we decided to give it a go, I travelled down to Beira Port to see what was involved. The war with Renamo was still raging, the Mozambique Government, isolated and broke, and the country was literally starving. I saw living skeletons along the road, naked women hiding from sight, bridges broken down, the rail line overgrown and burnt-out vehicles littered the side of the road. The Port itself was in a similar condition.

When the Portuguese left Mozambique in 1975, they left behind a complete shambles. Hotels without doors or windows, toilets blocked, they took vehicles and trucks and virtually everyone with any skills or experience. Frelimo came out of the bush where they had been fighting a guerilla war and assumed control of the country. Substantial Russian and East German support meant automatic isolation by the western powers and the Rhodesians launched a guerilla war using Renamo as a surrogate. South Africa picked up and expanded support for Renamo and in no time, Mozambique was in a terrible situation. In the year I travelled down to Beira, 500 000 people were estimated to have died of starvation.

We formed the Beira Corridor Group and eventually had 1000 companies as shareholders. We raised US$700 million and secured recognition of the Frelimo Government by Washington. We dredged the Port, cleaned up the pipeline to Mutare, replaced the sleepers on the rail line and ballasted the track, repaired the road and secured the corridor with 5000 troops from Zimbabwe. We built a new discharge facility for refined fuels and then extended to oil pipeline to Harare. In three years a third of our foreign trade was going through the Port and saving us millions in transport and shipping costs.

Now 35 years later I drove down to Beira and down memory lane. It looked much the same, but the road was completely new. The people are still poor but there are few signs of real hunger or deprivation and no signs of conflict. The Police were courteous and dressed in uniform. The traffic was heavy and was mainly trucks carrying copper, fuel, lithium and containers. There was no sign of traffic on the rail line. The Pungwe River was well below normal at this time of the year and the flats hardly flooded. I have seen it two metres underwater as far as you can see.

The big surprise was the Port. Its transformation was complete, it was crowded and there were at least 20 ships out at sea waiting to come into port to either load or discharge their cargo. The rail line to Dondo was busy with coal and people. The coal came from Mautize near Tete and was being shipped to the East from Beira. It was clearly being well managed, and I met the CEO of the Mozambique Company that runs the Port. He was a very smart and committed executive and I wondered how the country had been able to create such executives from nowhere in a short 35 years.

Mozambique has had an election recently and the ruling Party, Frelimo, had manipulated the result. Violence had broken out and a number of people were killed. Beira is under opposition control and was peaceful throughout, but Maputo was closed down. To the shock of their bigger neighbor, South Africa, they suddenly discovered how important Mozambique was to them. Things are slowly settling down now, the new President Chapo is picking up the pieces and forming a government. He is from a new generation and is the first President not to be born in pre–Independent Mozambique.

Chapo has a huge task ahead of him, corruption has become a real problem and fiscal management of the country has been poor. He has taken over a country with a very weak Army and an active conflict with Muslim extremists in the North. But I feel that they underestimate how far they have come from the situation they inherited from the Portuguese. In 1975 there were a handful of trained professionals in any field, the President himself had been an aide in a clinic in the rural areas and was killed in an air crash in 1989.

The country is huge – nearly 3000 kilometers from north to south without a single road traveling the whole distance. It bounds Tanzania, Malawi, Zambia, Zimbabwe, South Africa and Swaziland. It has a population of nearly 40 million. The national language is Portuguese, but the country is very ethnically diverse with many local languages. The main Ports are Nacala, Beira and Maputo. All three are linked to their hinterland by rail and road. They do not seem to have the mineral wealth of the land locked States but have discovered substantial natural gas resources both on land and at sea. The discovery in the north is estimated to be one of the largest such deposits in the world. This has the potential to create a great deal of wealth for the country if exploited properly.

Because it is coastal State with mountains along its boundaries inland, much of Mozambique gets good and reliable rainfall and is the country through which the great Zambezi River spills its riches into the sea. In the north this translates into a huge rain forest which is one of the continents great lungs. It also hosts large quantities of tropical hardwoods. In the pre-independence era Mozambique was one of the world’s largest producers of edible nuts and cotton. It has the potential to become a very substantial agricultural producer and being so close to the Middle East and the Far Eastern markets has a clear advantage over other States.

The Mozambique hinterland contains some of the largest deposits of minerals and metals essential to the world economy. If we can get the railways working and open up new Ports, the lowest cost route to these markets will be via Mozambique and this also represents a huge opportunity.

Exploiting these opportunities and resources requires that Mozambique now does the next thing it has to do after their amazing progress since Independence. That is to build up their own private sector and reduce reliance on foreign companies and expertise. The nucleus is there, they need free markets and the Government acting as a facilitator rather than a regulator. Portugal should now also accept that the best thing that they can do is provide capital for growth.

Eddie Cross

Harare 8^th March 2025