Mozambique is experiencing times of change. But it is not just Mozambique. The whole world. And, true to say, the beginning of this text would also have been factual last year. And ten years ago, twenty years ago and more, because change is linked to the time that, before, wandered through the watch hands and now lights up on a smartwatch, although we always tend to look at it in the now, calling it, again and again, the same thing, as time is always, in fact, changing.

More than this passive acknowledgement of the situation we are immersed in, I would like to assume the inevitability, to buy time and understand why changes don’t always occur the same way.

“The Mozambican economy should keep recovering gradually, but there are still substantial downside risks due to the uncertainty about the direction of the covid-19 pandemic”, reads the latest World Bank analysis of the Mozambican economy, released in Washington in the second week of March.

“Even though the economy witnessed its first contraction in 2020 in almost three decades, growth is expected to recover in the medium term, reaching 4% in 2022”, the text adds. The report also notes that “job losses and business closures, while significant, were comparatively lower than in comparable countries”.

In other words, after all, 2020 was not so bad and, unsurprisingly, there was strong growth in Mozambique, in one year alone.

No surprises, because there are things that became certain when, more than just visiting a city or a country, we spend enough time there to feel a part of it and we come to resemble the people in such places as regards its idiosyncrasies, identifying with certain subjectivities of its daily life. In Mozambique, in conversations between businesspeople, many of them Portuguese but not only and in many different areas, from banking to construction, through recruitment, communication and many others, but it is also often said that the long-awaited “explosion of the economy” is similar to what happens with Portuguese football club Sporting. The year begins with a promising note, motivating expectations and inviting the best and auspicious dreams. “Now is the time”, e.g. investment will pay off. And given that the pole is different, and Christmas is warm here, whereas in Europe the euphoria lasts, according to the myth, until December, in here things go from January to June, the end of the first semester, when, as a rule, all preliminary reports from the World Bank, the Economist Intelligence Unit or the IMF are published, showing that “well, it’s going to happen only by the end of the year”.

Hence, when someone new arrives in Mozambique, and any solemn circumstance or merely in a circle of friends, he uses that ineffable buzzword “Country full of potential” or, in a gentle manner he speaks of a territory of “great opportunities”, there is a mix of gazes on the other side of the room saying a lot without actually contradicting.

Not that Mozambique is not, in fact, a country full of potential. But it is not, contrary to what people might think, a potential that is easy to extract or leading to quick earnings, as outsiders think, especially when it comes to investing little and making quick and profitable profits painlessly.

Investing in Mozambique requires time, availability, delivery, resilience, the ability to deal with the unexpected and, above all, a universalist vision on how business is conducted. Take profits as long as something is left in exchange, such as jobs, professional training, reinvestment of part of the dividends and a serious investment in the country and its human resources and not just securing gains as a result of a more or less favourable conjuncture.

I say this for several reasons.

First, because Mozambique’s economy is mostly agricultural. Close to 24% of GDP comes from there and, more than the national wealth, it is the “bread on the table” of at least 18 million people, mostly young people. And this majority comprises another majority: women and mothers. And agriculture is not, as we know, industrialized, but subsistence, despite the huge efforts made in recent years by the ministry of the sector to give traction to domestic production, trying to raise it to the level of agro-business.

“The Mozambican economy should keep recovering gradually, but there are still substantial downside risks due to the uncertainty about the direction of the covid-19 pandemic”

Returning to GDP, Mozambique’s was about $ 14.5 billion in 2020, for 28 million inhabitants. Angola’s, a country with 30 million people, immersed in a serious crisis as we know, is around 72 billion. And that of Portugal, even with the fall in 2020, reaches 202 billion – for ten million inhabitants, 13 times more than that of Mozambique, for a third of the population.

This is the first logic of such potential. There is room – economic, social and geographical – to grow.

Then there are the resources. We all heard the news in 2010 and saw friends and acquaintances move to Maputo when the discoveries of natural gas took place. Moved by the pink vision of a “New Angola” facing the Indian Ocean that woke up on the other side of the map. It would be four, five years before the “bis” became part of a new reality counted in dollars.

Many came looking for this and they were, a few years later, the first to leave.

At the same time, the discovery of Tete’s coal reserves, in the centre of the country, and their exploration by the Brazilian Vale, leveraged the small economy, conveying a false sense of new wealth. To those who were there and those just arriving. The real estate market, unprepared to meet demand, inflated and took the import prices with it exactly measure as the metical appreciated to two and a half times more than it is worth today against the dollar and the euro.

In 2014, living in Maputo was too expensive. But it was worth it, it was said.

However, as the years went by, gas exploration was postponed. We know today that it will happen until 2024. With the worldwide drop in commodities in 2014, coal (the only real source of dollar inflows in the economy, apart from aluminium and FDI) also lost its value and the economy fell in real terms in the following years, and this became clear in the second half of the decade when the country stopped making it to the news for its growth and began hitting the news for the conflicts of Cabo Delgado, the Hidden Debts or the Hurricane that swept the country, causing devastation.

In between, the final investment decisions for Area 1, led by the French company Total, an operation with a global investment of around US $ 20 billion, and an FLNG unit, led by ENI (around 8 billion) were the good economic news that helped retaining entrepreneurs in Mozambique still resisting and saying, no longer out loud: “It’s almost there, just another year to go”.

And then the pandemic came. Mozambique was able to deal with it, having profited from the fact that, all over Africa, except neighbouring South Africa, the number of contagions and fatalities was, in fact, less than in Europe, for example. But the Government acted quickly and well, considering the circumstances of a developing country, but where the habit of dealing with adversity is part of the national identity.

With the arrival of vaccines and a new, more concrete and defined approach to the situation of terrorism in the gas province of Cabo Delgado we feel that the worst is probably over. The economic downturn could have never been huge, obviously, especially since the pandemic caused the biggest recessions in wealthier countries. However, the recovery will undoubtedly be faster than in the vast majority of more developed economies.

Because the country has the resources, it has the will and the timing is here.

If potential, I believe, it will be more the name that, by default, we give to the mere sum of some forces and I also believe that it only materializes as such when we see the combination of several of them. As someone who has looked at Africa since he was a child, first from afar, and for some years here, I believe that this continent has always lacked the right timing but has everything else.

And the pandemic may well have created it with this gigantic reset that we experienced in the last year, and that triggered the search for alternatives, increasing the appeal for renewables, for new commodities that emerge in the form of rare minerals, new currencies, cryptocurrencies that keep appreciating, and new working models.

In this brave new world in which we already feel that covid-19 will soon be under control, Mozambique has received the vaccine in good time, the energy transition is favourable to natural gas, the country is experiencing a climate of political stability achieved between the two large parties and the insurgency in the North is viewed with great concern following the recent attack to Palma but, with the international support that adds to the Government and Total’s will, one hopes that, in the second half of the year, the operation will resume. Twenty twenty one may not be “the year” of the boom we have been expecting for many years in Mozambique, but it will be, we believe, the year when we will tell the story of the decade, the year that will come down in history as the first of many years to come in the country’s economic and financial life.