VZCZCXRO0770
RR RUEHDU RUEHJO RUEHMR RUEHRN
DE RUEHTO #1162/01 2551534
ZNR UUUUU ZZH
R 121534Z SEP 06
FM AMEMBASSY MAPUTO
TO RUEHC/SECSTATE WASHDC 6018
INFO RUCNSAD/SOUTHERN AFRICAN DEVELOPMENT COMMUNITY
RUEHLMC/MILLENNIUM CHALLENGE CORP  0083
RUCPDOC/DEPT OF COMMERCE WASHDC
RUEHC/DEPT OF LABOR WASHDC
RUEATRS/DEPT OF TREASURY WASHDC

UNCLAS SECTION 01 OF 02 MAPUTO 001162 
 
SIPDIS 
 
SIPDIS 
 
AF/S FOR HTREGER AND JMALONEY 
JOHANNESBURG FSC FOR RDONOVAN 
JOHANNESBURG TDA FOR DSHUSTER 
USDOC FOR RTELCHIN 
MCC FOR SGAULL 
USAID FOR AA/AFR AND AFR/SA 
 
E.O. 12958: N/A 
TAGS: ECON EAID EINV ETRD MZ
SUBJECT: Mozambique - August Economic Digest 
 
 
MAPUTO 00001162  001.2 OF 002 
 
 
¶1.  This is a brief summary of significant economic 
developments in Mozambique during August 2006.  We provide 
it as a supplement to our other reporting.  The items 
discussed are: 
 
-- Economic Growth Estimated at 10 percent 
 
-- Oil/Gas Exploration of Zambezi Delta to Begin April 2007 
 
-- Cooking Oil Refinery to Receive USD 2 Million Investment 
 
-- Maputo International Trade Fair (FACIM) 
 
-- Mozambique to Upgrade its Airports in Next Two Years 
 
 
 
 
 
 
Economic Growth Estimated at 10 percent 
---------------------------------------- 
 
¶2.  According to Mozambican Prime Minister Luisa Diogo, the 
Mozambican economy grew ten percent in the first six months 
of 2006 compared to the same period of 2005.  This exceeds 
the Mozambican government's projected growth rate for 2006 
of 8.2 percent.  Much of this growth appears to have 
occurred in the business sector, which reportedly grew by 
22.4 percent between January and May 2006.  At the press 
briefing to discuss the growth rates, Diogo praised the 
government's ability to achieve high growth despite 
volatility of oil markets.  Responding to criticism that 
this high growth has not been matched by equivalent 
increases in government services, according to Diogo the 
government's policies are providing the desired results, if 
not yet at the desired rate.  (Note.  These growth rates are 
estimated from the Mozambican government and do not reflect 
final numbers.  End Note.) 
 
Oil/Gas Exploration of Zambezi Delta to Begin in April 2007 
--------------------------------------------- ------------ 
 
¶3.  Oil and gas exploration of the Zambezi River delta is 
scheduled to begin in April 2007, after the conclusion of 
environmental impact studies, according to press reports. 
The concessionaire, Petronas Carigali Mozambique E&P 
(PCMEP), a Malaysian company, will drill at least one well 
under an agreement between Petronas and Mozambican ENH 
(Empresa Nacional dos Hidrocarbonetos).  The results from 
this study are expected to be released in June 2007. 
 
¶4.  Exploration of the Zambezi River delta is in addition to 
exploration rights already granted for oil and gas 
exploration in the Rovuma River Basin.  Seven companies, 
including the American company Anadarko, currently have 
rights to explore blocks within the Rovuma delta, located 
near the Mozambican border with Tanzania. 
 
Cooking Oil Refinery to Receive USD 2 Million Investment 
--------------------------------------------- ------------- 
 
¶5.  The Mozambican cooking oil refinery FASOL announced on 
August 22 that it would be investing USD 2 million into 
renovations and upgrades of its Maputo plant.  The FASOL 
general director, Paulo Carvalho, made this statement on the 
margins of the signing of this year's Food for Progress 
agreement between the US and Mozambique.  Under the FY 2006 
agreement, the USG will donate 4500 tons of unprocessed 
vegetable oil for sale on the Mozambican market.  According 
to Carvalho, this agreement will allow FASOL to purchase oil 
and increase production by approximately 500%, a critical 
increase necessary to respond to market demands. 
 
Maputo International Trade Fair (FACIM) 
--------------------------------------- 
 
¶6.  The forty-second International Trade Fair (FACIM) took 
place in Maputo from August 28 through September 3.  At the 
opening President Guebuza stressed the importance of 
Mozambique's business community for the country's 
development and urged that it rise to the challenges the 
 
MAPUTO 00001162  002.2 OF 002 
 
 
pending SADC Economic Free Trade Zone will present (note - 
the SADC Free Trade Zone comes in force for Mozambique in 
2012).  In this regard, Guebuza stressed that Mozambique 
needs to increase production and improve the competitiveness 
of national products.  His message echoed the theme of the 
Ministry of Industry and Commerce's recently launched 
program - Made in Mozambique - which focuses on producing, 
promoting and exporting Mozambican products. 
 
¶7.  The 2006 FACIM hosted 530 exhibitors from 13 different 
countries, though most were Mozambican participants.  One 
new participant is a cheese manufacturer located in the 
central province of Manica.  The new company, Gouda Gold, 
has the capacity to produce 1.8 tons of cheese daily and is 
planning to export cheese within SADC and to the EU. 
 
Mozambique to Upgrade its Airports in Next Two Years 
--------------------------------------------- ------- 
 
¶8.  The GRM has budgeted USD 135.5 million to rehabilitate 
and upgrade its airport infrastructure around the country 
over the next two years, according to a government report 
released in mid-August.  The work includes not only the main 
airport in the capital of Maputo, but also airports in 
Beira, Pemba, Quelimane, Tete, Vilankulo and Ponta de Ouro 
(on the border with South Africa). 
 
¶9.  Mozambique's nineteen airports managed are managed by 
the parastatal Airports of Mozambique.  In addition, the 
country counts 229 airfields, of which ten are military, 61 
private and the remainder the property of the state. 
 
Raspolic