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Stronger transportation backbones planned for Mozambique

Interview - July 26, 2013
Rosário Mualeia, Chairman of the Board of Directors of Mozambique’s state-owned ports and railways management company, Portos e Caminhos de Ferro de Mozambique (CFM), speaks to Upper Reach about the urgent need for infrastructure and the opportunities that exist for investors to tap local knowledge in its outlined development

The consensus reached between Mozambique’s public and private sectors is a shared vision to utilise the recently found natural resources to invest in its social infrastructure, as well as its physical infrastructure such as ports and railroads. What is your opinion on this new path Mozambique is following and what is the role of CFM to turn the development plans into a reality?

It is evident that the model conceived by the country is a sustainable model, which responds to the needs of the people. Agriculture has always been defined as the base for the development of Mozambique; it will not be the recently discovered resources that will get the country richer and we will not get richer overnight. We are in a transitional moment.

In relation to the infrastructure sector, it had already been defined that infrastructure would be one of the largest sectors and more urgent priorities to get developed. It forms a backbone linking the coast with interior of the country from three main networks: the northern network (linking the north of the country to Malawi), the central network (linking the middle part of the country with Zimbabwe, and the hydro resources of the Zambezi valley and the coal reserves), and the southern network (linking the southern portion of the country with the southern part of Zimbabwe, South Africa and Swaziland.)

We need a vertical backbone for Mozambique and this backbone has already been conceived; the fieldwork is what is missing to start building it. Some parts already exist, like the Limpopo line that connects to Mapai, and from there it will link the north through the Sena line, which will cross the Machipanda line and will have a connection with other lines that will be laid. This is a long-term project and will take at least 10 years to be finalised.

We also plan to construct secondary ports. There are plans to build one more port, in Macuzi in the south. We expect to construct the Ntchumbanine port for Botswana to transport the diverse minerals of the region to world markets.

And what is needed to put these projects into practice?

This is a national project about interconnecting the entire country and for this type of development project we have public-private partnerships; we already have some parts done by partners from the private sector and, equally, with the use of the state budget.

We spoke with partners of CFM (Vale, Port Maputo, Cornelder, Portos do Norte, etc.) which talked about their contribution in terms of technologies as well as management to the joint ventures they have with state-related companies. What is the contribution of CFM as a local partner?

CFM brings along its experience, infrastructure that already exist, and its various investments (we recently invested in lines worth more than $500 million.) At the moment we are increasing the investment of $43 million we made in the rehabilitation of the Sena line; in the project of the line that goes to Nacala, passing through Malawi, from the CDN (Mozambique's Nacala Development Corridor) with 20% of participation coming from Vale.

Our participation is, up to certain point, imperative and majoritarian, because if we did not have land and the conditions for mining investments, nobody would invest in these projects. External financing is the engine, but local conditions are the important factors. One way or another, we contribute to continuing with the investments in the country.

According to the Ministry of Industry and Commerce, a local partner is the main factor that a foreign investor should count on to conduct an investment project in the country, because without the partner, it is hard to understand the domestic business culture.

In many countries, many projects failed precisely due to not including this component, especially in matters concerning land and those who own the land; they cannot be put aside in the process of development. Quite the opposite, they need to be included.

There is a very important demographic movement in developing African countries, a rural exodus, which puts a lot of pressure on public transportation and urban infrastructure. What are the plans to integrate the railroad system with public transportation, not only at the country level, but also at the urban level in order to alleviate this demographic pressure?

There is a government program that promotes the development of districts with an investment that started with 7 million meticals per year, with the perspective of preventing this exodus continuing. One of the studies carried out showed that poverty in the countryside, due to this investment, was being reduced, and tended to be lower than in big cities.

People are becoming conscious that cities are not the solution for poverty and are starting to accept that the base is agriculture. The government program prioritises urban development so that – similar to what has happened in other countries – towns arise and turn into big cities; urbanisation has to be a smooth process, a natural response to the settlement of the population.

Within the provinces, big post-civil-war settlements can be found and today they have amenities that were previously unimaginable, like energy, drinking water, etc.

The results of the exploration of mineral resources are yet to be seen. However, knowing these resources are not renewable, what would happen in terms of infrastructure and know-how in Mozambique when the big companies leave the country?

I was recently in the Spanish city of Bilbao, which back in the day it was a polluted industrial town. Today is an exemplary city for tourism. I believe this is the example to give for this perspective of development, for the human capacity of regeneration, not only for one’s own survival, but also the usage of the resources for the sustainability of the urban centres.

We will only be able to make this example real by changing our habits, activities and, above all, maintaining the environment and fostering the development of agriculture.

In provinces like Niassa, there are large plantations, which sit where mining exploration is taking place. Hence the current lines under construction do not operate without utility; there is always cargo to transport. There are nearly 22 million inhabitants in Mozambique, a number that will increase as well as our GDP growth, so the railways will always be busy. With the construction of Armando Guebuza Bridge on the Zambeze River, railway traffic became more fluid, making products even cheaper. We clearly are witnessing a cross-sectorial development where agriculture will always play a big role in our economy.

At times where the current world scenario is changing, regional unions are consolidating, but most importantly, individuals all across the world are participating in the global exchange of good, services and ideas. What is the role of CFM with regards to consolidating the self-esteem of Mozambicans for the recovery of national morale and confidence?

We have stepped into the education sector, which is a fundamental area to concentrate into in order to continue cultivating the confidence and self-esteem of Mozambicans. With a solid education we will know how to best utilize the many economic opportunities that lay ahead.

We have 2,500kms of rich coastline, many conservation areas for tourism. We have parks or areas of animal conservation practically in all provinces of the country. Mozambique has been blessed by nature.

Again, we must prioritise education to diversify our economy and also spread opportunities all along the Mozambican territory. We have to show that Mozambicans have the capacity to move forward and do many things. The government needs to be called to invest in agriculture; banks will have to find ways to finance this investment, and entrepreneurs all along the country must ride this wave. I say this because it is not enough to claim that we have opportunities. We need a plan to apply a consolidated strategy to take advantage of our opportunities and add value to our national resources.