Naturally Resourced

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Mozambique’s long stretches of beautiful beaches and plethora of leisure resorts entice divers and general leisure travellers on an annual basis, thanks to the natural beauty and exotic locations on offer. But its rich and extensive natural resources make Mozambique an attractive proposition for foreign investors, and as a result, an important African business travel destination.

FACT FILE
Population: 25 million
Time zone: GMT+2
Plugs: Two-pin round
Dialling code: +254
Currency: Metical – $1=31.4MZN
Language: Portuguese, English

BACKGROUND

After decades in the economic doldrums, Mozambique’s GDP has been growing at an average of 9%, thanks largely to strong demand for aluminium exports from the Mozal smelter, although volatile commodity prices remain a concern.

“Coal and natural gas is driving the economic boom,” says Dylan Coppard, Chief Executive of Angel Gabriel Aeronautics, a South African-based private aviation company. “But it’s important not to overlook the real contribution of all the subsidiary companies indirectly involved down the supply chain.”

Agriculture has long been a mainstay of the economy – cotton, cashew nuts and sugar cane are important sectors – and with political and social stability over the past decade, the tourism industry has boomed.

“Stability gave investors the security to invest in the country,” says Miguel Santos, General Manager of the Polana Serena Hotel in Maputo. “As a result, corporate tourism increased, and leisure travellers started rediscovering Mozambique.”

That being said, 2014 is an election year and all interested parties are hoping for a peaceful time. The election takes place in October and the country expects peace to revive its image as a popular tourist destination, after a series of kidnappings prompted many foreigners to shun the African country’s white sandy beaches last year.

According to Bloomberg.com, Tourism revenue fell more than 10% in 2013 to $222 million from the previous year. That’s because of the abductions and worsening violence between the army and a militia loyal to the main opposition Renamo party, said Tourism Minister Carvalho Muaria.

“People just don’t like to visit places where there are problems,” Muaria said in an interview in Lisbon in March. “The situation is getting back to normal after Renamo said it would work to take part in the elections, and it knows it can’t take part in the vote if it creates problems of banditry.”

Mozambique, the site of the world’s biggest natural gas discovery in the past decade, is investing in roads, bridges and railway lines to diversify its economy and attract foreign investment. Since the end of the country’s 17-year civil war in 1992, visitors had increasingly flocked to sunbathe on Indian Ocean beaches and feast on seafood.

Last year’s worsening violence in Mozambique prompted the Portuguese and Canadian governments to advise its citizens against non-essential travel to some of the country’s provinces. The tourism industry accounts for about 7% of the former Portuguese colony’s gross domestic product, according to Muaria.

MAJOR CITIES

Maputo is the capital of Mozambique and the key business hub. In the north, Tete is the capital city of the Tete Province mining area, and is a vital link on the major highway from north to south, as well as to Zimbabwe and Malawi. Beira, some 700 kilometres north of Maputo, is home to the country’s second-largest port and has long been a major trade route. Nampula is the country’s third-largest city and the business heart of northern Mozambique, as well as being a major trade and transport hub.

Pemba is a port city and capital of the province of Cabo Delgado. It lies on a peninsula in Pemba Bay and has become an increasingly popular tourist destination, thanks to the water sport and diving opportunities on offer. Vilanculos in the Inhambane province is another popular tourist location and a coastal town with its own international airport, which was refurbished fairly recently.

LOCATION

Mozambique is a country with a lot of neighbours. It is situated on the Indian Ocean coast of southern Africa, bordered by South Africa to the south and Tanzania to the north. Further to that, it has inland borders with Malawi, Zambia, Zimbabwe and Swaziland. Mozambique is divided into 10 provinces, from Cabo Delgado in the north down to Maputo in the south.

BUSINESS TRAVEL ACTIVITY

The past year has seen a fair amount of Mozambique-focused business travel activity, both in and out of the country, in terms of air travel and accommodation.

Comair, operator of British Airways in southern Africa, commenced scheduled services between Maputo and Johannesburg in May 2013. The flight schedule comprised daily return flights with a double daily service on Tuesdays and Saturdays. Unfortunately, February this year saw Comair announce that it had ended that service. According to Iain Meaker, Commercial Distribution Executive for Comair, “after much consideration and review, we have decided to withdraw the Maputo route to ensure the airline remains sustainable”. This is the second time that Comair has failed to run the route profitably. In September 2011 it launched flights from Lanseria, to the north-west of Johannesburg. However, that service was cancelled in January 2012.

On a more positive note, LAM commenced flights between Johannesburg and Nampula and increased frequencies between Johannesburg and Tete, Beira and Maputo, and Johannesburg and Maputo. The airline also announced the firm purchase of three Boeing B737-700NG aircraft with an option for another three. The deal is worth about $228 million if the three options are converted into firm orders. It was hoped that the new aircraft would help LAM expand their operations and offer additional capacity and destinations from its main hub at Maputo International Airport. LAM had previously used one B737-500 and two Embraer E190 aircraft, and the order was set to double the number of aircraft on the fleet. 

Kenya Airways also introduced another flight to Maputo in 2013. This brought to four the number of flights operated by the airline. The flying time is just over four hours, but the one-hour time difference between Kenya and Mozambique should be factored into scheduling. Flight code KQ740 departs Nairobi on Mondays at 10h50 and arrives in Maputo at 13h55, whilst flight code KQ741 departs Maputo at 14h45 and arrives in Nairobi at 19h50.

Privately-owned South African airline Airlink offers direct scheduled flights from Johannesburg to Beira, Nampula, Pemba, Tete and Vilanculos. The airline, based in South Africa, also flies between Durban and Maputo and, commencing in June, between Nelspruit and Vilanculos.

Coppard’s Angel Gabriel Aeronautics, which is in the process of setting up an office in northern Mozambique, offers charter flights for passengers and cargo to many of the county’s more remote areas.

“Coupled with the poor road infrastructure, excessive car rental costs, and hazardous travel conditions, we wanted to offer travellers a service that we ourselves were so desperate for when we first visited northern Mozambique on an exploratory trip,” says Coppard. “Currently, our licence is restricted to charter flights, but we have initiated the process of applying for an operating licence that will allow us to operate an air-taxi route connecting four major hubs in northern Mozambique – Nampula, Nacala, Pemba and Palma.”

On the hotel front, 2013 saw Minor Hotel Group (MHG), a hotel owner, operator and investor, announce the formation of a long-term strategic partnership agreement with Rani Investment, the owner of high-end resorts across Africa. The two organisations formed a joint venture company for ownership of Indigo Bay Resort & Spa in Mozambique, with plans for further expansion in the rest of Africa. Located on Bazaruto Island, 30 kilometres off the east coast of the country, Indigo Bay is a 5-star, 44-room villa resort, and it was re-branded as Anantara Bazaruto Island Resort & Spa in December 2013.

April 2014 saw MHG announce the addition of three properties in Mozambique to its portfolio and a 25% equity investment in the properties. They will be reflagged to MHG’s Anantara and Avani brands later this year. The three properties are located on the northern coastline of Mozambique, still operating as part of the Rani Resorts portfolio. On the mainland, the 185-key Pemba Beach Hotel & Spa will be rebranded to the Avani Pemba Beach Hotel & Spa. Located in the Quirimbas Archipelago, the exclusive boutique island properties – Medjumbe Private Island with 12 chalets and Matemo Island, currently with 24 villas – will both be rebranded to Anantara. Matemo Island is currently closed for an extensive renovation and the addition of more keys. All three properties will be rebranded by the end of 2014.

Still on the hotel front, 2013 saw Carlson Rezidor add a second Mozambique hotel to its Park Inn by Radisson in Tete.

2014 is a big year for one of Maputo’s already established hotels. Southern Sun Maputo closed for renovations on 1 April and aims to re-open on 1 August. At an investment of $30 million, with 423 contractors on site, this top-to-bottom revitalisation project will include the addition of 111 rooms and the complete refurbishment of the current 158 rooms and all the public areas. Mediterranean influences of Mozambique’s history will be woven into the new design, including carpets, fabrics and furnishing detail. The restaurant space will be increased, and the menu upgraded to offer national and ‘international’ cuisine. A clever lighting application will transform the atmosphere in the restaurant from a cool, fresh feel at breakfast to a warm, romantic and intimate venue at night. The “new” Southern Sun Maputo will include a new 120-seat conference centre, two new meeting rooms and a brand new business centre. Southern Sun Maputo is one of Tsogo Sun’s more than 90 hotels and 14 casino and entertainment destinations in Africa, UAE and the Seychelles. 

On the travel management front, 2013 saw Carlson Wagonlit Travel announce that it was expanding its African presence to Mozambique, through a partnership with TopAtlântico Mozambique, a subsidiary of the Portuguese travel management group Espírito Santo Viagens. TopAtlântico, in partnership with CWT, has provided travel management expertise to corporate travellers in Portugal since 2002 and in Angola since 2006. Based in Lisbon, the company is a travel agency with over 600 employees. CWT has an operational presence in over 40 African countries.

“Mozambique is the newest addition to the CWT network and is a key country for our energy services clients,” said Richard Saunders, Senior Director of CWT Global Partners Network for Europe, Middle East and Africa.

 AIRPORT

Most international flights arrive at Maputo International Airport, situated three kilometres north-west of central Maputo. The airport is currently in the middle of a three-phase expansion and refurbishment project. Work to build a real estate project including hotels and restaurants next to the airport was due to begin in 2014. Repairs will also be made to the main runway, the airport apron, airport equipment and all illuminated signs at the airport. Taxis to town are plentiful and you can also arrange a hotel transfer.

The Cip Premium Lounge at Maputo Airport is situated airside, opposite gate 1 in the main departure hall, after the security checks and passport control. Its operating hours are 05h00-23h00 daily, although those hours sometimes vary according to the flight schedule. Check-in facilities are available inside the lounge, although at a cost. Children under 12 are not permitted entry. No smoking is allowed in the lounge, but a separate smoking area is available. Lounge facilities include: air-conditioning; disabled access; newspapers/magazines; television; alcohol; flight info monitor; refreshments; fax; phone and Wi-Fi.

“Check-in is seamless and it’s a rather quiet airport, or at least it was when I travelled there,” says Chris Schuitmaker, Manager: Regional Business & Partner Management Africa for HRG Rennies. “There are lots of food stalls and little shops in which to grab a magazine. It’s a small airport, with about a 10-15 minute drive to the city centre.”

HOTELS

Maputo, like any capital, offers good quality accommodation. Located on the Maputo beachfront, the Southern Sun Maputo is a popular haven for business and leisure guests, and is a mere seven kilometres from the airport, although its 2014 renovation project will only see it operational again in August.

“It’s a very popular hotel in Maputo,” says Schuitmaker. “It also has good security and the service is excellent. The rooms are also comfortable.”

The magnificent 5-star Polana Serena has long been considered one of Africa’s finest hotels, and belongs to the Serena group. It has always lent a touch of class to the Maputo hotel scene, but definitely benefitted from an extensive renovation programme. The hotel, 15 minutes’ drive from Maputo International Airport and five minutes from Maputo’s city centre, offers 142 rooms, three restaurants, the Maisha Mind Body and Spirit Health Club and Spa, residents’ lounge, business centre, beauty salon and three gift shops.

The Radisson Blu Hotel, Maputo has 154 rooms and enjoys a prominent location overlooking the Indian Ocean, as well as being within easy reach of Maputo International Airport and downtown. Guests enjoy a range of amenities and Radisson Blu signature services, such as free high-speed Internet access. The Filini Bar & Restaurant serves Italian cuisine and wines, and has an inviting terrace, whilst there’s also the Oceano Bar, the trendy Palmeira Lounge and the glamorous Pool Bar. In addition, there’s a large outdoor swimming pool and a fitness room. The hotel is also ideal for events ranging from large conferences to board meetings: Facilities include three meeting rooms, a conference room spanning 252m2 that can be divided into three, and a flexible pre-function area of 153m2.

Lonrho Hotels has a presence in Maputo in the form of the Hotel Cardoso, which has earned itself an excellent reputation, whilst Pestana Hotels & Resorts has the Pestana Rovuma Hotel & Business Centre in the centre of Maputo, which is popular with business travellers. This 4-star hotel features an outdoor pool, gym and steam room, a business centre, parking and conference rooms. In addition, a small shopping centre at the entrance of the hotel provides essential services such as banking, pharmacy, hairdressing, clothing, car hire, mobile and communications assistance. Pestama Rovuma features 119 rooms, including suites, all equipped with air-conditioning, satellite TV, telephone, safe, hairdryer and bathroom. Most rooms have a balcony with a view over the city or the Bay of Maputo. The Monomotapa restaurant offers Portuguese, Mozambican and ‘international’ cuisine. In addition to the restaurant, the hotel provides a snack bar and cocktail lounge.

These are the branded hotels in Maputo, whilst there are also a host of privately-owned properties.

 CARD ACCEPTANCE  

ATMs are present throughout the country – Standard, Millennium Bim, BCI, ProCredit and Barclays are the brands travellers are most likely to see. Standard accepts Visa and MasterCard, and Millennium accepts all international cards including Maestro/Cirrus cards, while Barclays does not seem to accept any cards with great regularity. ATMs have transaction limits on withdrawals, which vary with the bank. Millennium Bim limits withdrawals to 3,000Mts ($100), BCI to 5,000 and Standard Bank to 10,000. But travellers can always insert their card again to withdraw more money.

“I always try to travel with as little cash as possible, as most places are well-equipped to receive plastic,” says Coppard. “You really only need cash for taxis and the odd soft drink.”

“Taxis are fiercely expensive, and can cost as much as $20 for a short three kilometre hop. Very few forex companies will deal in meticais, and even if you are lucky to find one that does, they probably won’t have stock. My advice – take only what you need in cash, because you absolutely cannot exchange meticais back into Rands in SA. No bank will touch them.”

 VISAS

Only five African countries offer visa-free access or visas on arrival to citizens of all African countries, and Mozambique is one of them. All visitors (except citizens of Botswana, Malawi, Mauritius, South Africa, Swaziland, Tanzania, Zambia and Zimbabwe) need a visa, which can be obtained on arrival at Maputo, Vilanculos and Pemba. Visas on entry can be purchased in meticais and US dollars. Not all borders and airports issue visas, so travellers are advised to check this before departure. Land borders may also charge a stamping fee on entry, which is generally $2, but is often waived if travellers buy their visa at the border. In addition, travellers must use the visa forms provided at the consulate or border, as self-printed versions will not be accepted.

 CONNECTIVITY

mCel is the state-owned provider, but the service is not entirely reliable, especially outside of Maputo. Movitel has the best network (by far) in the bush, and if travellers are looking to travel off-the-track, then a pre-paid Movitel SIM card will definitely be handy.

Vodacom is generally very good in most areas except northern Mozambique, where it is available in towns only. While it is fine to buy credit from the hundreds of vendors roaming the streets wearing mCel or Vodacom shirts, travellers should never buy SIM cards or starter packs, as in many cases the vendors sell them at hugely inflated prices, and often they will be from one of the many recalled batches that no longer work. Any mobile phone store can sell travellers a working starter pack for around 50Mts.

Internet is widely available in Maputo, with many Internet cafes and all major hotels having Internet access. Service providers mCel, Vodacom and Movitel have introduced Internet to cellphones and USB modems. However, Movitel USB modems are the most widespread, and travellers will find 3G signal in most areas, although frequent disconnection is an issue.

 HEALTH

Malaria prophylaxis is essential in all parts of Mozambique. Chloroquine/Paludrine are now as ineffective as in other parts of east Africa, and it’s worth consulting a doctor to get decent protection. If travellers in the country suspect they have malaria, there are clinics in every town that will administer a test for approximately 50Mts.

THE EXPERIENCE

There has previously been volatility in the Tete mining area, where there have been a number of reported crimes that have drawn increased public attention, including several kidnappings.  South Africa’s High Commissioner to Mozambique said that people traveling to Maputo on business do not have to worry about their safety. Travellers should however be aware of their surroundings in public, avoid carrying unnecessary valuables, and avoid walking alone at night.

“Don’t put your wallet in your back pocket,” says Coppard. “If you drive, have all the correct documentation on hand, because the police will stop you, and they usually try their luck. But honestly, I generally feel safer in Mozambique than I do at home in Johannesburg.”

Roads throughout the country are generally in poor condition and pose a serious challenge to any driver in a low-clearance vehicle. Note also that north of Vilanculos, service stations are scarce – motorists may go 150 kilometres between service stations, so fill up at every opportunity. In order to enter Mozambique by car, travellers will need the original registration documents, and if it is not their vehicle, a letter from the owner granting permission to take the vehicle across the border. All foreign vehicles are required to have third party insurance.

The Maputo Experience
Glenn Stutchbury – CEO: Cresta Hospitality

The airport is new, well laid out and works very well, and it’s easy to drop off and collect people. Just a word of warning – be careful ordering milk in your tea in the departures, as the bill goes up by $2 if you order a dash of milk! I stayed at the Radisson Blu, which has a great location on the beach and the views are spectacular. I was fortunate to get upgraded to a remarkable suite on one of the top floors. It had a lounge, dining room, kitchen, desk with printer and huge bathroom, all overlooking the sea. I couldn’t have been more comfortable. The restaurant food was very good and I thought the breakfast was excellent – that’s how I grade hotels. The Radisson’s lounge service was slow, but I looked at other hotels and this one was way ahead of the rest. My recommendation is to get a car and a driver who speaks good English and can take you round Maputo. It will save a huge amount of time, you’ll learn a lot about the city, and you can focus on business instead of determining street names and one-way systems. My other tip is to change money, as US dollars are not very useful on the ground. Rather have meticais ready.  Also be aware that seatbelts are compulsory for all car passengers. If you’re caught not wearing one, you’ll earn yourself a 500Mts fine!

Doing Business in Northern Mozambique
Dylan Coppard – Chief Executive: Angel Gabriel Aeronautics

Setting up a business in northern Mozambique, no matter how small, is made near impossible, as you wade neck-deep through red tape and bureaucracy. Our particular industry faces a daily duel with the Mozambican Civil Aviation Institute, which seems intent on stopping anyone but LAM from flying. However, the relentless frustrations and unreasonable, sometimes borderline impossible, operating requirements can be seen as positive, as they do well to chase away the competitors. Only big business with massive resources, huge profit margins, ample cash flow and an experienced management team will endure the challenges of operating a business in Mozambique. Most smaller companies keen to get a piece of the action will simply have the life and cash sucked out of them before they start. I may paint a very negative picture of northern Mozambique, but the truth is, if you are an engineering firm, logistics, mining, resources, shipping or rail company, I encourage you to do your homework on northern Mozambique, and yes, be prepared for an immense challenge on all fronts. But get there ASAP. If you survive, the rewards are well worth it!

CONTACTS
embamo.co.za
www.mozambiquetourism.co.za