The second stop of President Recep Tayyip Erdoğan's visit to east Africa will be Mozambique on Tuesday. The country stands out with its rich energy sources, despite being listed as one of the poorest countries in the world. Turkish businesspeople accompanying to the president at his first visit to Mozambique seek for opportunities in the fields of energy, construction and tourism.
The establishment of the Turkish Embassy in Mozambique in 2011 has had a great impact on the relations between Turkey and Mozambique, making Turkey one of Mozambique's main strategic business partners. In terms of economic relations, trade volume between Africa and Turkey went up from $5.5 billion in 2003 to around $18 billion today. Growing even faster, trade volume between Turkey and Mozambique increased from only $5 million in 2003 to around $120 million today.
The capital city of the country, which has a similar size to that of Turkey in terms of surface area, is Maputo. Moreover, 99 percent of the Mozambique's population, which is around 25 million, is made up of African local tribal groups. Nearly half of the country's population comes from the Macau local tribe, while Tsongas, Shangs and Senas are among the other ethnic groups in the foreground of the region.
The Sub-Saharan Africa's fastest-growing Mozambique economy grew by 7.4 percent in 2014, while it experienced the lowest growth rate in more than a decade in 2016. In the third quarter of 2016, mostly due to the international investors' lack of confidence and sharply rising inflation, the economy only expanded 3.7 percent. However, despite unfavorable prospects in the short term, Mozambique should be able to recover at a projected rate of 6.9 percent by 2018, according to the World Bank. The World Bank adds that foreign direct investment will eventually support Mozambique's external position.
Foreign Economic Relations Board (DEİK) Turkey-Mozambique Business Council President Erhan Barutoğlu pointed out that Mozambique could be the world's largest liquefied natural gas (LNG) exporter after the commercialization of high-volume natural gas in its territorial waters.
Indicating that Turkish companies Gama, Renaissance and Limak are the leading international contracting and investment groups of Turkey, Barutoğlu said: "The three companies are working hard to transfer their experience and knowledge to the construction projects they undertake in Mozambique and the investments they make, with the firms they build, the offices they open, and the local staff they employ."
He also said that Limak Cement is starting to produce and sell cement with its facility, which is about to go into operation, adding that Turkish investors are already investing in and planning to invest in Mozambique in real estate development, housing, agriculture, and small and medium-sized trade.
According to UN data, Mozambique, a less developed country in the world, has become a stable developing country with the recent economic reforms, but last year's foreign debt crisis has put the country back on a difficult economic backdrop. Mozambique is among the developing countries of the African continent with around $15 billion in GDP, according to the World Bank data.
In the country where the inflation rate is 17 percent, 80 percent of the workforce in the country is employed in the agricultural sector, while 6 percent in the industrial sector and 13 percent in the services sector. The country is also rich in natural resources, according to information contained in the U.S. Energy Information Administration (EIA). Around 100 trillion cubic meters of natural gas discovered in an area off the coast in the Rovuma basin in the northern Cabo Delgado region, led Mozambique to become Africa's third richest country after Nigeria and Algeria in terms of natural gas reserves. The country, which currently has difficulties in selling its reserves, sold a large portion of its 198 billion cubic meters of natural gas to South Africa in 2014.
Furthermore, the amount of coal discovered at the Tete region in central Mozambique is close to 28 billion tons. Targeting 20 million tons of coal annually at mid-range, Mozambique plans to increase its export capacity to 100 million tons in a few years, making it one of the world's major coal producers. Moreover, Mozambique, which has Africa's most powerful hydroelectric power plant, has an annual energy output of 14.83 billion kWh, while the consumption is 10.19 billion kWh. The country, which has significant hydroelectric potential with its rivers, also has great opportunities in the field of tourism.
Tourism in the country with its natural beauties and 2,500 kilometers of coastline is among the priority investment areas of the government. The tourism sector, which is not improved enough, has a high potential. Tourism revenues increased by 5.6 percent, 6.2 percent and 7 percent in 2013, 2014 and 2015, respectively.
Pointing out that Mozambique's significance is that it has both an energy sources and an appropriate geopolitical position in terms of exports to those countries that need it to the maximum extent, Barutoğlu said: "The country offers great opportunities for Turkey and Turkish companies since it needs a vast amount of investment in and construction of the facilities required to export natural gas, electricity generation plants to use this gas as fuel as well as raw material resources and other related facilities in the country with abundant coal fields and other sorts of chemical and industrial facilities to process these raw materials. Moreover, other indirect investments necessary for this energy-driven development route such as logistics, all kinds of business activities, services, products, semi-finished goods, and trade are of great importance and indisputably call for Turkish investors."
Saying that opportunities, profits, competition, as in every market, are also available in the Mozambique market, Barutoğlu said that, even though Mozambique market is big on its own, Turkish investors can also gain the opportunity to do business in other peripheral countries if they make a conscious entrance to the Mozambique market by analyzing and understanding the market and focusing on business issues.
Indicating that investment funding problems seen in some other African countries are also encountered in Mozambique, Barutoğlu stated that Turkey's presence in Mozambique and similar countries, which are very important for both its exports and its raw material imports, should be seen as a great opportunity for Turkish entrepreneurs.
"We all know that the Turkish nation, Turkish entrepreneur are capable of producing brand new business models, including finance, with the ability, courage and creativity", Barutoğlu said, adding that the examples of them can be seen all over the world and other African countries.
Finally, Barutoğlu stated that it would not be wrong to say that Mozambique, which is considered as the African country with the highest potential, is ready to embrace Turkey, Turkish companies and Turkish products.