VZCZCXRO4134
RR RUEHJO
DE RUEHTO #0715/01 2051234
ZNR UUUUU ZZH
R 231234Z JUL 08
FM AMEMBASSY MAPUTO
TO RUCPDOC/DEPT OF COMMERCE WASHDC
RUEHC/SECSTATE WASHDC 9165
INFO RUEHSA/AMEMBASSY PRETORIA 6074
RUEHJO/AMCONSUL JOHANNESBURG 0799
UNCLAS SECTION 01 OF 02 MAPUTO 000715
SIPDIS
E.O. 12958: N/A
TAGS: BEXP EINV ECON ETRD MZ
SUBJECT: BFIF HIGHLIGHTS OPPORTUNITIES FOR U.S. INVESTORS
1. SUMMARY: In an environment of increased investor interest
and economic growth in Mozambique's economy, Embassy Maputo
drew upon the Department of State's FY08 Business
Facilitation Incentive Fund (BFIF) and partnered with the
Foreign Commercial Service to successfully craft a range of
activities to educate U.S. companies with a presence in the
region on commercial opportunities in Mozambique, and to
match up U.S. and Mozambican businesses into potential
partnerships that could result in nearly one billion dollars
in new sales and investment. The activities included two
trade and investment conferences, participation in an
International Buyers Program (IBP) along with a follow-up
DVC, and essential training for embassy staff. The high
level of participation by U.S. and Mozambican companies in
the events underlines the impressive potential return for
American business from the USG's modest BFIF outlay. END
SUMMARY.
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ECON NUMBERS SUGGESTED POTENTIAL FOR INVESTMENT
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2. Mozambique's GDP per capita has nearly quadrupled since
the civil war ended in 1992, and the country has had the
highest consistent growth rate in Africa over the past
decade. In addition, the United States is now the largest
source of Foreign Direct Investment in Mozambique and Rafique
Yusob, director of the GRM's Center for the Promotion of
Investment (CPI), has told Emboffs that CPI predicts that the
United States will be the leader in FDI over the next five
years and perhaps longer. U.S. exports to Mozambique nearly
doubled from 2006 to 2007, and initial data from the first
quarter of 2008 indicate that some U.S. exports continue to
grow significantly*for example, electrical machinery and
equipment jumped 123% compared to 2007. In spite of some
improvement in recent years, Mozambique still scores low on
the World Bank's Doing Business, ranking.
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U.S.-MOZAMBIQUE TRADE FORUM IN JOBURG
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3. After evaluating these data and seeing significant
commercial potential in spite of a challenging business
environment, the Embassy formally requested four small
allocations from State's BFIF to help U.S. companies invest
in Mozambique (reftel). Emboffs first teamed up with the
Foreign Commercial Service to jointly plan a half-day
Mozambique Trade Forum in Johannesburg, South Africa in late
February focused on U.S. companies already resident in South
Africa and looking to expand to Mozambique. Led by Embassy
Maputo's Charge and the Mozambican High Commissioner to South
Africa, fifty participants from more than thirty U.S.
companies met to discuss investment opportunities and
strategies in Mozambique. As a result of the workshop, FCS
and Embassy Maputo responded to two requests for FCS services
from U.S. companies that represent $6-10 million in potential
new sales. In addition, AmCham Johannesburg and the Illinois
Trade and Investment Office are now reviewing the possibility
of a joint trade delegation to Mozambique and Embassy Maputo
met with a team from the University of Michigan that are
assisting U.S. investors in planning a biofuel project in
Mozambique in conjunction with BHP Billiton.
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U.S.-MOZAMBIQUE INVESTMENT CONFERENCE IN MAPUTO
--------------------------------------------- --
4. Drawing on the momentum of the Johannesburg forum, post
next orchestrated a larger, day-and-a-half U.S.-Mozambique
Investment Conference in late June. At this conference, more
than 130 participants from U.S. and Mozambican companies
discussed investment opportunities with Mozambique's Minister
of Energy, the Minister of Tourism, the Central Bank
Governor, and the director of the GRM's Center for the
Promotion of Investment (CPI). In addition, U.S. businessmen
already present in Mozambique gave their views on the
challenges and rewards of investing in the local economy.
The Embassy received four more requests for Gold Key Service,
International Company Profiles (ICP), and International
Partner Searches (IPS), and also directed a three hour,
informal matchmaking exercise in which 25 U.S. companies
participated with potential Mozambican partners. Together,
these activities represented more than $900 million in
potential new U.S. sales or new U.S. investment in Mozambique
in areas as diverse as commercial agriculture, airplanes and
aviation equipment, and healthcare and insurance services.
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FRANCHISING IBP AND DVC
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MAPUTO 00000715 002 OF 002
5. In mid-April, the Embassy's EconSpecialist drew on BFIF
support to lead a delegation of three Mozambican companies to
the International Franchise Expo in Washington, DC, where
they met with over 30 franchisers that are looking to expand
into southern Africa. After followup meetings with a dozen
of those, the EconSpecialist proposed a BFIF-funded DVC
between U.S. franchisers and potential local partners that
has been set for September, and twenty Mozambican companies
have already expressed interest in the event.
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ESSENTIAL TRAINING
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6. Finally, Econoff and EconSpecialist took advantage of the
February forum in Johannesburg for three days of no-cost
training with the Foreign Commercial Service. The tailored
course included in-depth instruction on a wide variety of FCS
services like Gold Key, ICP, and ICS; an introduction to
ExIm, USTDA, and OPIC; and a series of meetings with
counterparts at Embassy Pretoria on investment opportunities
and the trade relationship between the U.S., South Africa,
and Mozambique. The training also served as a team-building
exercise between FCS Johannesburg and Embassy Maputo to
bolster the ability of the two missions to generate joint
economic success stories.
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COMMENT: SMALL INVESTMENT, HUGE RETURNS
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7. The four-part BFIF proposal cost $10,000, representing
the successful implementation of the Embassy's strategy to
draw U.S. investors who are already familiar with the
region--particularly South Africa--into Mozambique. An
immediate impact, the three-day training course greatly
expanded the Embassy's ability to provide commercial services
on behalf of the non-resident FCS and to more effectively
advocate for U.S. companies. Directly after the course, the
Embassy completed its first FCS services and has since taken
on several more. More significantly, the two trade and
investment events along with the IBP and DVC showed the
strong interest of U.S. companies in Mozambique while
highlighting that the challenging business environment calls
for an active USG role. Ultimately, the small BFIF outlay
could result in as much as $1 billion in new U.S. investment
and sales in Mozambique.
Amani