The Sector’s Potential

Mozambique has enormous potential in the aquaculture sector, with a total production capacity estimated at around 4,000,000 tons per year. This potential includes approximately 2,000,000 tons for the production of fish in inland waters and another 2,000,000 tons for the production of marine species. The total production area is estimated at 378,000 hectares, with around 258,000 hectares dedicated to inland aquaculture and 120,000 hectares to marine aquaculture.

Strategy for the development of aquaculture

The Strategy for the Development of Aquaculture (EDA) in Mozambique aims to promote commercial aquaculture, involving small-scale producers and attracting the private sector to invest in the activity. The EDA envisages defining incentive packages, facilitating the investment process, improving the business environment, mitigating initial investment risks and facilitating access to financing. The sub-sector’s development approach is based on a combination of small-scale aquaculture practiced by local producers in partnership with the national and foreign business sectors, with state support through Public-Private-Community Partnerships (PPPC).

Guiding principles for the development of aquaculture

In order to guarantee the rapid and sustainable development of aquaculture, the government has outlined a set of guiding principles. These principles include promoting sustainable production, improving the management of water resources, protecting the environment and promoting social and economic inclusion.

Pillars of the strategy for aquaculture development

The pillars of EDA’s strategy aim to solve the problems identified to ensure the sustainable development of aquaculture. These pillars include improving infrastructure and technology, strengthening institutional capacities, developing the market and promoting research and innovation.

Investment opportunities

The Mozambican government is committed to promoting commercial aquaculture, encouraging the participation of small-scale producers and attracting the private sector to invest in the activity. This scenario creates opportunities for investors interested in supporting and expanding aquaculture production in the country. The strategy for developing aquaculture in Mozambique aims to resolve the challenges identified and ensure sustainable growth. With the combination of small-scale aquaculture and the involvement of the business sector, a significant increase in fish production is expected, contributing to food and nutritional security, job creation and increased income for communities.

Financing aquaculture in Mozambique

Funding for the implementation of aquaculture development actions comes from the internal revenue budget, through tax and earmarked revenues. The government has defined aquaculture as a priority area, establishing a significant rate of earmarked revenue to boost its rapid development. The involvement of the private sector along the value chain is essential, and it is necessary to demonstrate the attractiveness of the business both domestically and for export. The support of cooperation partners is also crucial, mobilizing sufficient financial resources to implement the strategy.

Final notes

Aquaculture in Mozambique has enormous growth potential and offers significant investment opportunities. With the implementation of the Aquaculture Development Strategy, the country will be able to benefit from increased fish production, food and nutritional security, job creation, increased community income, tax revenues and foreign exchange.

Banco BiG Moçambique recently released the first edition of its market study on Institutional Investment in Mozambique – 2024. The aim of this study is to provide the Mozambican market with information on the macroeconomic outlook and the opinions of the main players in the sector on the current and future context of investments in Mozambique.

Services such as Fund or Financial Asset Management Companies, Pension Funds, Pension Fund Management Companies and Insurance Companies were surveyed, and the respondents were CEOs, CFOs and Investment Managers, respectively.

The conclusions on the various indicators included in this study are presented in aggregate form, in order to convey the opinion of the sector as a whole.

A mixed profile of participants took part in the study, including investment managers or those responsible for similar positions in insurance companies, pension fund management companies, fund or financial asset management companies, social security institutes and others.

The most common benchmark used by managers to assess the returns on their investment portfolios is the treasury bill rate (69% of managers). On the other hand, 15% of respondents mentioned not using any benchmark.

When choosing investments, managers consider factors such as the profitability of investments, the consistency of returns and the level of risk to be the most important factors.

On the other hand, the applicable taxation, the maturity of the investments and the associated costs proved to be of less importance when choosing investments.

It can also be seen that ESG criteria are becoming a relevant criterion when it comes to choosing investments.

For 2024, respondents plan to increase their exposure to BTs (69%), Commercial Paper (38%) and real estate (38%). On the other hand, 77% of respondents intend to decrease their exposure to unlisted shares, 62% to OT’s and 46% to listed shares and cash and Demand Deposits.

For 2024, the majority of respondents (77%) said that they expect the yields on BTs and OTs to remain the same or fall in 2024.

85% of managers were optimistic about business growth in 2024. On the other hand, the remainder expected business to slow down or stagnate.

69% of managers expect an increase in the number of competing companies in the sector. 67% of those who expect an increase are insurance companies.
Summary of Conclusions

For the year 2024, 54% estimate GDP growth of between 5% and 7.5%, while almost half of managers estimate that Net International Reserves (NIR) will remain at current levels in 2024.

On a different note, over 80% of those surveyed consider political instability and high public debt to be the main risks to the economy, and around 50% of the participants expect the “force majeure” of TotalEnergies to be lifted in the second half of 2024.

The study also shows that 38% of investors expect the MIMO rate to fall by 150bps in the 3rd quarter of 2024. The average rate of Treasury Bills (BTs) is used as a benchmark when assessing the profitability of their investment portfolio by around 69% of participants.

Return on investment and taxation were selected as the most relevant and least relevant factors, respectively, when selecting investments. For the next 12 months, 69% of respondents intend to increase their exposure to BTs. On the other hand, 62% intend to reduce their exposure to OTs.

Finally, 85% of managers consider 2024 to be a year in which the turnover of their business is expected to grow and 69% predict an increase in the number of competing companies in their respective sector.

Read the full study at: Estudo de Mercado do Investimento Institucional