HOW TO LEVERAGE YOUR RESOURCES TO BE A REGIONAL HUB AND
ENSURE SUSTAINED DEVELOPMENT AND LONG TERM ECONOMIC
GROWTH
Mozambique Gas Conference
Maputo, December 03, 2013
Outline

The successful strategies to make oil and gas major contributors to the GDP of
Mozambiques’ communities – multi generational strategies.

Critical economic and social areas to focus on and channel investment to enable sustained
growth

Developing regional markets and gaining regional support – how to find local markets

Ensuring development of the economy as a whole – investing in diversification
Abstract
In today’s world, sustainable development is a phenomenon that many scholars
address when explaining its role on promoting economic growth driven by
natural resources that a certain country has. Sustainable development requires
some coordinated actions taken by governments as for example, controlling
higher inflation, growth of government consumption and a slower pace of
financial development which impinge negatively on economic growth.
Endogenous economic growth can be possible only when crafting favorable policies
to attract more FDI inflows which will increase long-run growth due to their
contribution to increasing the existing level of knowledge through labor training,
skill acquisition and the introduction of alternative management practices, inputs
and technology.
The successful strategies to make oil and gas major contributors to the GDP of
Mozambiques’ communities – multi generational strategies.
1.
Actions to enter
A new geographic
Or product markets
or existing ones
Actions to
Strengthen
Competitiveness
Via strategic
Alliances and
Collaborative
partnerships
Identifying Mozambique Strategy -What
to look for
Actions to
Respond changing
Market conditions
And others
External factors
The patterns of
Actions and
Business approaches
That define a
Country’s
strategy
The patterns of
Actions and
Business approaches
That define a
Country’s
strategy
Actions to capture
Emerging market
Opportunities and
And defend against
External threats to the
Country’s business
prospects
Actions to
Strengthen market
Standing and
Competitiveness
By acquiring or
Merging with
Other companies
(countries)
Actions to gain
Sales and mark
Share via lowe
Prices, more
Performance featu
More wider produc
Selection, manag
R&D
Sustainable Growth of SMEs on knowledge –
based
Pipelines as contributors to Mozambique GDP
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The oil pipeline system in Mozambique has to be constructed as a part of an
interconnected regional network which include two or more disjoint system serving
the SADC region, and Asian market.
Creation of an independent regulatory structure to oversee oil and gas industry in
order to diverse export options (essential issue) to sell gas in a competitive price.
Creation of a coordinated partnership with suppliers to develop more supply
chains as the oil and gas market is less characterized by heightened level of
uncertainty.
The natural gas transport cost depends on pipeline construction, operational and
maintenance costs. The regional or intercontinental natural gas pipeline projects
are mainly characterized by high infrastructure construction costs and a low
relatively low operational and maintenance cost.
The pipeline network system will benefit local and international market thereby
increasing revenues that will boost GDP.
Mozambique GDP insight

The Gross Domestic Product (GDP) in Mozambique was worth 12.80 billion US dollars in
2011. Its value is roughly equivalent to 0.02 percent of the world economy, currently with per
capita of 500 US dollars boomed by the first exploration of natural resources that influenced
the economic growth of 7.5% the highest and stable one in the region.

GDP (current US$)
$14.59 billion 2012
Population, total
25.20 million 2012
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Many countries have managed precariously revenue from its natural resources, have poorly
negotiated with mining companies.
The size of the financial sector contributes significantly to economic growth. However, any
increase in the quasiliquid liabilities/GDP ratio by 10% raises the annual per capita GDP
growth rate by 1.8%.
GDP Insight cont
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Economic growth may be particularly important in societies
where political aspirations are currently in excess of
resources, since growth may forestall what might otherwise
prove to be unbearable social tension.
Although it is clear that not the whole population gets the
benefits from FDI the number of trained people is still
growing and gives value to the community where these
people are inserted. The exploration of natural resources
has to contribute on the equality of life style of Mozambique
citizens and benefits the future generation.

The overall performance in GDP has to be guaranteed by
the maintenance of political and macroeconomic stability
which deepens the internal market in the current framework
of natural resources exploration that will accelerate the
development through a strong economic growth with an
inclusive equilibrium.

The GDP growth for agricultures has been two or four times
more impact on the economic growth. The Gross Domestic
Product (GDP) in Mozambique expanded 0.4 percent in the
second quarter of 2012 over the previous quarter.
Historically, from 2000 until 2012, Mozambique GDP
Growth Rate averaged 2.02 percent reaching an all time
high of 7.40 percent in March 2005 and a record low of 5.00 percent in September of 2004
A lesson to be learned from Caspian
region

Source:EIA North Caspian pipelines
Profitable Gas trading hub

In order to have a competitive, sustainable and secure natural gas market governments have
to increase competition in the gas market to minimize costs in in the local market.

Strategies and policies to enhance gains on GDP and development have to allow:

A change from public ownership to privatization

Design a monopolistic market structure to allow capital intensive infrastructure and low returns
on investments which will enable development and a platform for exchange. (buyers and
sellers). Trade without ownership is impossible. However is so crucial to enable competitive
markets to function.
If this happens Mozambique will boost and improve the physical and virtual hub. (Geographic
location and regional intercommunions.

Mozambiques’ communities – multi generational strategies to benefit the locals
Recently Mozambique has discovered massively natural resources such as gas, coal and so on. These resources
have been identified where the population live and develop their basic activities such as agriculture, and
pastoralism. However, approaching these communities require a very well coordinated strategies
designed by governments as well as by the investors when are interested in operating in such areas with
natural resources.
The presence of natural resources will dramatically alter the way those communities live as new form of planning is
undergoing. The government has to use a knowledge to maximize the planning and development process
and to improve infrastructures that surround these communities.
SMEs fragilized
Mozambique SMEs access to finance is the key element and one of the most significant
challenges for entrepreneurs and for the creation, survival and growth as well as their
prosperity in business.
THE GROWTH of mining and energy projects has to contribute massively in the boom in
services providers companies.


a)
The food industry, particularly,
b)
Corporate fast food and
Catering services in the country that we are lack of.
c)
Critical economic and social areas to focus on and channel investment to enable
sustained growth
One of the most important hub which is a keen to promote a sustainable development in a given
country is education. Education represent the third generation in a globalized world. A very
well concerted and planned education hub can allow a critical mass of knowledge actors who
will strenghen efforts to exert more influence in the new marketplace.
FDI will enable a recruitment of skilled work force attracting research and development firms and
multinational companies specializing in the knowledge economy and service industries.
Scientific and technological knowledge is an important strategic resource, to foster and strengthen
the capability of independent innovation as the developing country's basic strategy, and
continuously increasing the government financial investment ahead of the deployment of
strategic technology to cultivate and develop the own technological capabilities

.
six knowledge capacities as a firm’s critical capabilities of managing internal and external
knowledge in open innovation process: inventive, absorptive, transformative, connective,
.
innovative, and desorptive capacity
Critical economic and social areas to focus on and channel investment to enable
sustained growth
African need for infrastructure and economic development is the key element for the continent to craft strategies aiming at
attracting FDI to exploit resources they have in abundance and allow them to benefit from the transfer of technology, as
well as to solve problems such as institutional framework and absorptive capacity.

Urbanization; sanitation; roads, ports, railways, etc.
Inflation
Appropriate use of monetary policy can promote a stable financial environment necessary for economic growth by
maintaining a low inflation rate.
Sustainable development and trip wins
The triple win outcomes that strengthen all three strands of sustainable development. (Source) PNUD
SUSTAINABLE GROWTH AND DEVELOPMENT
Developing regional markets and gaining regional support – how to find local markets
Developing regional markets and gaining regional support – how to find local markets
Ensuring development of the economy as a whole – investing in diversification
The objective of diversification is to produce the best portfolio, the one with the most favorable
combination of risk and expected return. The best possible minimizes the risks due to a
residual uncertainty for any given level of return. It reduces the risk of investment portfolios
because assets returns in different countries are not perfectly correlated.
Venture investments that diversify across portfolio company stage of development have greater
success in bringing companies public and exiting their investments via acquisition. However,
investments specialization has insignificant impact on venture fund success rates.
Because the market is imperfect, it is uncommon to achieve a well diversified portfolio of venture
capital. This phenomenon force companies to specialize.
International diversification is currently an established fact stock and bonds portfolios. Another kind
of strategy to minimize the risk is to diversify among different stock markets.
A well diversified portfolio will highly lower the risks than a purely domestic portfolio even
considering exchange risk which tends to be diversified across several strong and weak
currencies.
Given the relative independence of national economic growth and stock markets, there also exist
abroad investment opportunities that have no substitute domestically
Cross strategies

Creation of a special bank for investments with a specific role of charging taxis from
multinationals (for example 50 cents of usd ) in each unit gas export.
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Support cluster linkage to promote value in sub-sectors with potentials

To promote the creation of networks and connection among SMEs in regions and to develop
their manufacturing capability and business management.
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Development or investment Bank
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Legislation on Social Responsibility
And…
THANK YOU FOR YOUR
ATTENTION