VZCZCXRO4134
RR RUEHJO
DE RUEHTO #0715/01 2051234
ZNR UUUUU ZZH
R 231234Z JUL 08
FM AMEMBASSY MAPUTO
TO RUCPDOC/DEPT OF COMMERCE WASHDC
RUEHC/SECSTATE WASHDC 9165
INFO RUEHSA/AMEMBASSY PRETORIA 6074
RUEHJO/AMCONSUL JOHANNESBURG 0799

UNCLAS SECTION 01 OF 02 MAPUTO 000715 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: BEXP EINV ECON ETRD MZ
SUBJECT: BFIF HIGHLIGHTS OPPORTUNITIES FOR U.S. INVESTORS 
 
¶1.  SUMMARY: In an environment of increased investor interest 
and economic growth in Mozambique's economy, Embassy Maputo 
drew upon the Department of State's FY08 Business 
Facilitation Incentive Fund (BFIF) and partnered with the 
Foreign Commercial Service to successfully craft a range of 
activities to educate U.S. companies with a presence in the 
region on commercial opportunities in Mozambique, and to 
match up U.S. and Mozambican businesses into potential 
partnerships that could result in nearly one billion dollars 
in new sales and investment.  The activities included two 
trade and investment conferences, participation in an 
International Buyers Program (IBP) along with a follow-up 
DVC, and essential training for embassy staff.  The high 
level of participation by U.S. and Mozambican companies in 
the events underlines the impressive potential return for 
American business from the USG's modest BFIF outlay.  END 
SUMMARY. 
 
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ECON NUMBERS SUGGESTED POTENTIAL FOR INVESTMENT 
--------------------------------------------- -- 
 
¶2.  Mozambique's GDP per capita has nearly quadrupled since 
the civil war ended in 1992, and the country has had the 
highest consistent growth rate in Africa over the past 
decade.  In addition, the United States is now the largest 
source of Foreign Direct Investment in Mozambique and Rafique 
Yusob, director of the GRM's Center for the Promotion of 
Investment (CPI), has told Emboffs that CPI predicts that the 
United States will be the leader in FDI over the next five 
years and perhaps longer.  U.S. exports to Mozambique nearly 
doubled from 2006 to 2007, and initial data from the first 
quarter of 2008 indicate that some U.S. exports continue to 
grow significantly*for example, electrical machinery and 
equipment jumped 123% compared to 2007.  In spite of some 
improvement in recent years, Mozambique still scores low on 
the World Bank's  Doing Business, ranking. 
 
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U.S.-MOZAMBIQUE TRADE FORUM IN JOBURG 
------------------------------------- 
 
¶3.  After evaluating these data and seeing significant 
commercial potential in spite of a challenging business 
environment, the Embassy formally requested four small 
allocations from State's BFIF to help U.S. companies invest 
in Mozambique (reftel).  Emboffs first teamed up with the 
Foreign Commercial Service to jointly plan a half-day 
Mozambique Trade Forum in Johannesburg, South Africa in late 
February focused on U.S. companies already resident in South 
Africa and looking to expand to Mozambique.  Led by Embassy 
Maputo's Charge and the Mozambican High Commissioner to South 
Africa, fifty participants from more than thirty U.S. 
companies met to discuss investment opportunities and 
strategies in Mozambique.  As a result of the workshop, FCS 
and Embassy Maputo responded to two requests for FCS services 
from U.S. companies that represent $6-10 million in potential 
new sales.  In addition, AmCham Johannesburg and the Illinois 
Trade and Investment Office are now reviewing the possibility 
of a joint trade delegation to Mozambique and Embassy Maputo 
met with a team from the University of Michigan that are 
assisting U.S. investors in planning a biofuel project in 
Mozambique in conjunction with BHP Billiton. 
 
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U.S.-MOZAMBIQUE INVESTMENT CONFERENCE IN MAPUTO 
--------------------------------------------- -- 
 
¶4.  Drawing on the momentum of the Johannesburg forum, post 
next orchestrated a larger, day-and-a-half U.S.-Mozambique 
Investment Conference in late June.  At this conference, more 
than 130 participants from U.S. and Mozambican companies 
discussed investment opportunities with Mozambique's Minister 
of Energy, the Minister of Tourism, the Central Bank 
Governor, and the director of the GRM's Center for the 
Promotion of Investment (CPI).  In addition, U.S. businessmen 
already present in Mozambique gave their views on the 
challenges and rewards of investing in the local economy. 
The Embassy received four more requests for Gold Key Service, 
International Company Profiles (ICP), and International 
Partner Searches (IPS), and also directed a three hour, 
informal matchmaking exercise in which 25 U.S. companies 
participated with potential Mozambican partners.  Together, 
these activities represented more than $900 million in 
potential new U.S. sales or new U.S. investment in Mozambique 
in areas as diverse as commercial agriculture, airplanes and 
aviation equipment, and healthcare and insurance services. 
 
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FRANCHISING IBP AND DVC 
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MAPUTO 00000715  002 OF 002 
 
 
 
¶5.  In mid-April, the Embassy's EconSpecialist drew on BFIF 
support to lead a delegation of three Mozambican companies to 
the International Franchise Expo in Washington, DC, where 
they met with over 30 franchisers that are looking to expand 
into southern Africa.  After followup meetings with a dozen 
of those, the EconSpecialist proposed a BFIF-funded DVC 
between U.S. franchisers and potential local partners that 
has been set for September, and twenty Mozambican companies 
have already expressed interest in the event. 
 
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ESSENTIAL TRAINING 
------------------ 
 
¶6.  Finally, Econoff and EconSpecialist took advantage of the 
February forum in Johannesburg for three days of no-cost 
training with the Foreign Commercial Service.  The tailored 
course included in-depth instruction on a wide variety of FCS 
services like Gold Key, ICP, and ICS; an introduction to 
ExIm, USTDA, and OPIC; and a series of meetings with 
counterparts at Embassy Pretoria on investment opportunities 
and the trade relationship between the U.S., South Africa, 
and Mozambique.  The training also served as a team-building 
exercise between FCS Johannesburg and Embassy Maputo to 
bolster the ability of the two missions to generate joint 
economic success stories. 
 
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COMMENT: SMALL INVESTMENT, HUGE RETURNS 
--------------------------------------- 
 
¶7.  The four-part BFIF proposal cost $10,000, representing 
the successful implementation of the Embassy's strategy to 
draw U.S. investors who are already familiar with the 
region--particularly South Africa--into Mozambique.  An 
immediate impact, the three-day training course greatly 
expanded the Embassy's ability to provide commercial services 
on behalf of the non-resident FCS and to more effectively 
advocate for U.S. companies.  Directly after the course, the 
Embassy completed its first FCS services and has since taken 
on several more.  More significantly, the two trade and 
investment events along with the IBP and DVC showed the 
strong interest of U.S. companies in Mozambique while 
highlighting that the challenging business environment calls 
for an active USG role.  Ultimately, the small BFIF outlay 
could result in as much as $1 billion in new U.S. investment 
and sales in Mozambique. 
Amani