Mozambique courts Rwandan business community
The New Times | 17 December 2021
Mozambique courts Rwandan business community
By James Karuhanga
Rwandans are welcome to make the most of Mozambique’s numerous investment opportunities, Gil Bires, Director General of Mozambique’s investment and export promotion agency, Agência Para a Promoção de Investimento e Exportações (APIEX), told The New Times on Thursday, December 16.
Bires is in Kigali with a delegation attending the ongoing International Trade Fair (Expo 2021) as well as exploring investment opportunities in Rwanda and holding meetings with government and private sector officials.
His delegation of 15 government officials from different ministries is on a mission to attract Rwandan investors to the southern African country.
He said: “We are open. There is a window for opportunity that the Rwandan private sector can take advantage of. And they are most welcome. We have a very attractive regulation on investment which is friendly for foreign direct investments.”
The minimum value of FDI resulting from the inflow of own capital from foreign investors, a brochure he shared indicates, is set at the equivalent of Mozambican meticals 2.5 million (around $39,000) for the specific purpose of transfer of profits abroad and then re-export invested capital.
“And in terms of guarantees and incentives this legislation is also very attractive. We have different types of incentives. First of all, one of the key issues, sometimes when one talks about investments, is access to land. In Mozambique, land belongs to the state which means that it is easy for those that want to invest in agriculture to have access to land.”
Besides sectors such as energy, infrastructure, manufacturing, mineral resources, and fisheries and aquaculture, investment opportunities in Mozambique’s agriculture overflow in production of cereals, fruits, flowers, vegetables, and others, for both the local and export markets.
Compared to landlocked and densely populated (12 million) Rwanda’s just over 26,300 square kilometers, Mozambique has an area of 799, 390 square kilometers and a population of about 24 million people.
The vast country’s tourism and hospitality sector also offers huge and unique investment opportunities in national parks and reserves, the possibility of investment in private game farms in the country’s interior, and beach tourism along the 2,700 kilometer coastline as well as the numerous islands and archipelagos.
“If you want to invest you have to submit your expression of interest. We, as APIEX, that is our mandate, to promote and facilitate investment. We are the one stop shop. They submit their investment proposal and we provide full assistance; starting from company incorporation, taxation registration, getting business license, to getting access to land,” Bires said.
As noted, Mozambican investment law grants certain tax and customs benefits depending on the amount, location and sector of investment activity.
Bires said: “In regard to the incentives and guarantees, first of all, under our regulation, foreign direct investment is protected in terms of intellectual property rights, the right to repatriate dividends and capital as long as you fulfill requirements as a foreign investor, you’ve also the right to benefit from fiscal incentives which comprise different types of incentives starting from import duties for all the goods and equipment that you need to set up your business.
“You have tax rebates. We have different incentives according to the sector in which you are going to invest. If you are going to invest in agriculture, there are specific packages of incentives in agriculture, the same for tourism, and so on.”
Their current incentive schemes also include tax credit per investment whereby investments carried out in the capital, Maputo, benefit, for a period of five tax years, from deduction – not to exceed the tax payable in respect of the investment project activity – from corporate income tax that is equal to five per cent of the total investment realized.
The percentage is 10 per cent in all other remaining provinces of the country. And, there are specific regimes for: agriculture and fisheries; trade and industry in rural areas; manufacturing and assembly sector; creation of basic infrastructure; industrial free zones; tourism and hotels; and large scale projects.
The country has a lucrative oil and gas sector but, according to Bires, agriculture, manufacturing, tourism, infrastructure and energy are, presently, Maputo’s priority investment sectors even if “we are open to other investments.”
“According to our government’s 30-year plan, these five sectors are the priority sectors; which means we are trying to attract investment considering the potential that we have.”
The Mozambicans are also looking for investment opportunities in Rwanda and are exploring possibilities especially in sectors such as agriculture, manufacturing, services, and tourism.
At the Expo and in other meetings, Bires said, the visiting delegation has a chance to share information about legal frameworks and business opportunities back home.
Officials from APIEX visited Kigali in October and, together with their Rwandan counterparts, signed an agreement meant to boost their respective countries economic development through trade and investment activities.
At the time, the Rwanda Development Board (RDB) deputy chief executive, Zephanie Niyonkuru, said the MoU was expected to facilitate the private sector to implement investment projects in sectors such as agriculture and agro-processing, infrastructure, energy, and tourism in both countries.
Discussions are underway to look into how Rwanda’s national carrier, RwandAir, can have do direct flights to Mozambique to facilitate transport and logistics concerns for investors.
Currently, people traveling to Maputo go through Nairobi, Johannesburg or Addis Ababa.
The engine of the economy
Rwanda and Mozambique ties grew steadily in the past few years.
When President Paul Kagame, in 2016, visited the Southern African country, the two leaders held bilateral talks prior to the signing of an agreement on cooperation in the area of political consultations.
At the time, while in Maputo, Kagame addressed members of the academic and business society and emphasized that the private sector must play a key role, alongside government, to ensure mutually beneficial partnerships that promote social and economic prosperity. In mid-2018, President Filipe Nyusi was in Kigali in a reciprocal three-day visit during which a number of bilateral agreements were signed.
Bires, who was made APIEX Director General about four months ago, did not attend the 2016 meeting. But he acknowledged that “private sector is the engine of the economy and, in regard to Rwanda, we are trying to create synergies between our private sectors.”
“In this mission, although there are no private sector members we are preparing a business mission that will take place next year. And we expect to have business people from Rwanda to Mozambique.”
Bires said they are still exploring business opportunities and gathering information to share with the business community back home.
He said there is also potential for trade cooperation between the two countries.
Besides ever growing business and trade ties, Kigali and Maputo are cooperating in essential peace and security matters.
In April, Nyusi visited Kigali, held talks with his Rwandan counterpart and expressed openness to receive support in the fight against terrorism in Cabo Delgado.
On July 9, Kigali, at the request of Maputo, deployed troops to the latter’s northernmost Province of Cabo Delgado to help fight the terrorists, stabilize the area and restore state authority.
Lately, previously inaccessible areas, in regions where Rwandan and Mozambican forces operate, the insurgents have been defeated, paving way for a gradual return to normalcy.
Peace and stability has returned and thousands of previously displaced people returned home and resumed their normal lives in areas like Palma. Rwandan and Mozambican forces there remain vigilant and continue to, bit by bit, pick out remnants of the insurgency.
When Kagame visited the Province, in September, Nyusi thanked the people of Rwanda and his guest for having quickly understood his country’s need for help and acted to thwart the threat posed by terrorists.