Barriers and Opportunities for Enhancing Capital Flows
In the COMCEC Member Countries
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Institutions overseeing capital flows
All capital account transactions are subject to the authorisation of the foreign exchange
authority, Banco de Moçambique (BDM, the central bank). These include foreign direct
investment, fixed asset investment, operations relating to securities and other instruments
transacted on the money and capital markets, and the physical import and export of money.
The terms and conditions under which authorisations are granted for each type of capital
transaction are set out in Decree 83/10. All capital account operations are to be effected
through the banking system. Although BDM must theoretically respond to applications for
authorisation within 15 working days, it can suspend the process if it considers that it needs
additional information, potentially leading to uncertainty about the actual duration of the
process. The administrative processes of this regulatory framework may have had a
dampening effect on capital inflows to Mozambique.
In addition to the Law on Foreign Exchange, FDI inflows are governed by the Law on
Investment, Law 3/93 of June 24th 1993, and its regulations set out in Decree 43/09 of August
2009, designed to attract foreign investment into Mozambique. The Law on Investment
established the investment promotion centre, Centro de Promoçãos de Investimentos (CPI),
under the authority of the Ministry of Planning and Development (MPD). In 2007 (Decree
75/07 of December 24th) Mozambique created the Gabinete Das Zonas Económicas de
Desenvolvimento Acelerado (GAZEDA), a mirror organisation of the CPI, to focus on Special
Economic Zones (SEZs) and Industrial Free Zones (IFZs).
Application for investment licences are directed to the CPI (or to GAZEDA for firms wishing to
invest in SEZs), according to the size and type of the planned investment. Under Decree 43/09
the authorities are required to approve or reject an investment proposal within 30 working
days. In practice, however, applications may lead to further negotiations about the exact
nature of the projected benefits to investors. Investment licences have contractual value and
offer foreign investors a number of guarantees in terms of treatment and protection, as well as
fiscal incentives.
Debt and equity instruments
Mozambique’s tiny stock exchange, the Bolsa de Valores de Moçambique (BVM), established in
1999, has only four listed companies. Cervejas de Moçambique (CDM), a subsidiary of South
Africa’s SABMiller, was the first company to be listed. CDM, which floated 25% of its shares in
2001, is also the largest company by market capitalisation (about US$461m) and the most
traded one. Companhia Moçambicana de Hidrocarbonetos (CMH), a state-owned oil and gas
company floated 10% of its shares in 2009. Its current market capitalisation is about US$6m.
Construção e Serviços (CETA) the country’s largest engineering and construction group, was
admitted to list 25% of its share in 2012, but they are not currently traded as the company is
considering reprivatising. The market for debt securities is slightly more developed, with eight
short-term commercial debt securities and 20 medium- to long-term debt securities being
traded (issued by both the government and private companies). Activity is generally weak: in
2012 the exchange, which is open for only a few hours a week, registered barely 191trades.
Total market capitalisation (including both company shares and debt securities) is about