Why Mozambique is key to TZ export drive

DAR ES SALAAM: FOR decades, trade between Tanzania and Mozambique was driven largely by geography. Goods crossed the common border, informal commerce flourished and businesses benefited from the two countries’ shared frontier and longstanding political friendship.

In the eighth part of this ‘Daily News’ Diplomatic Bench Interview series, Tanzania’s High Commissioner to Mozambique, CP Hamad Khamis, explains how Mozambique’s strategic location, natural resources and access to Southern African markets can create new opportunities for Tanzanian businesses, while stronger trade, investment, infrastructure and regional value-chain linkages can deepen the economic partnership between the two countries.

“Trade and economic relations between Tanzania and Mozambique have continued to expand, supported by geographical proximity, historical ties, regional integration and increasing private sector cooperation,” he says.

The High Commissioner notes that trade has diversified significantly over the past decade. What was once dominated by small-scale cross-border commerce now includes manufactured goods, agricultural products, processed foods, construction materials, energy products, logistics services and professional services.

More importantly, he says, Tanzanian companies are moving beyond exporting products to establishing a long-term presence in Mozambique through investment, production and service delivery.

“Importantly, the relationship is no longer limited to Tanzania exporting goods to Mozambique. Tanzanian companies are increasingly establishing a presence within the Mozambican economy through investment, production and service delivery,” he says.

“Tanzanian businesses are active in sectors such as agro-processing, manufacturing, transport, petroleum distribution, construction, aviation services and agricultural equipment supply.”

Among the companies driving this shift are Bakhresa Grain Milling LDA, which has invested in grain storage and wheat processing, and METL Group, whose investments include textile manufacturing and cashew processing.

Other Tanzanian-owned enterprises have expanded into transport, logistics and energy distribution, signalling a transition from trade based largely on buying and selling to one built on investment and production.

“This demonstrates a transition from a buyer-seller relationship towards a partnership based on investment, production and regional value-chain development,” he says.

High Commissioner CP Khamis argues that the future competitiveness of both countries will depend on moving beyond the export of raw materials towards value addition and integrated production systems.

“The future of Tanzania-Mozambique trade will increasingly depend on value addition, industrial cooperation and integration of production systems, allowing both countries to benefit from their complementary economic strengths,” he says.

He identifies agricultural products and processed foods, manufactured consumer goods, construction materials, pharmaceuticals, transport and logistics, and engineering and professional services as sectors where Tanzanian companies have strong growth prospects. Existing investments already demonstrate this potential.

“Bakhresa’s grain-processing activities show opportunities in food security and agro-processing, while METL’s investments demonstrate the potential for industrial manufacturing and value addition,” he explains.

Looking ahead, the High Commissioner says the success of bilateral trade should not be measured simply by export volumes, but by the ability to produce higher-value goods that can compete in regional and international markets.

Among the industries with significant potential are fertiliser and chemical production linked to Mozambique’s natural gas resources, strategic mineral processing, including graphite and battery industries, renewable energy technologies, agricultural machinery, specialised healthcare services, and tourism and hospitality.

“The objective should be to increase exports of higher-value products while developing joint production systems that serve regional and international markets,” he says.

Achieving this, he argues, requires businesses to move away from exporting raw commodities and instead invest in industries that retain more value within Africa.

“The key priority is to move from exporting raw materials towards producing value-added goods and regional industrial products,” he says.

“Tanzania and Mozambique have significant opportunities to collaborate in sectors where both countries possess complementary resources.”

Agriculture offers one of the clearest opportunities. The two countries can jointly expand food-processing industries, producing packaged foods, edible oils, animal products and industrial inputs instead of exporting raw agricultural commodities.

Mining and energy present equally promising prospects. Mozambique’s substantial graphite resources, combined with Tanzania’s mineral resources, could support regional battery and advanced-material industries serving the growing clean energy market.

Likewise, Mozambique’s natural gas resources create opportunities for cooperation in fertiliser production, chemicals, electricity generation and wider industrial development.

By encouraging joint ventures, Special Economic Zones and industrial partnerships, CP Khamis says the two countries can establish integrated regional value chains that promote technology transfer, create jobs and support sustainable economic growth.

He also cautions Tanzanian exporters that success in Mozambique depends on more than competitive pricing.

Businesses should approach the market with a long-term perspective, invest in relationships, understand local market conditions, and maintain high standards of quality and reliability.

“Successful entry into the Mozambican market requires exporters to understand that sustainable business depends on trust, quality and long-term partnerships,” he says.

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According to the High Commissioner, success in the Mozambican market depends on far more than competitive pricing.

Exporters must comply with product standards and certification requirements, understand import regulations and customs procedures, identify reliable local distributors and business partners, adapt products to local consumer preferences and provide dependable after-sales services.

“Tanzanian companies should pay attention to compliance with product standards and certification requirements, understanding import regulations and customs procedures, building relationships with local distributors and business partners, adapting products to consumer needs and market conditions, and providing reliable supply and after-sales services,” he says.

Drawing on the experience of Tanzanian companies already operating in Mozambique, the High Commissioner says businesses that establish local partnerships and gain a deep understanding of the market are better positioned for sustained growth than those relying solely on crossborder exports.

“The experience of Tanzanian companies operating in Mozambique shows that companies that establish local partnerships and understand the market environment are better positioned for long-term success,” he says.

Beyond commercial considerations, CP Khamis says cultural and linguistic ties provide Tanzania with a unique competitive advantage.

He points to the growing recognition of Kiswahili as a regional language of integration that facilitates business networking, commercial negotiations and economic diplomacy.

“Language and cultural links also provide an advantage. Kiswahili, which is increasingly recognised as a regional language of integration, can support business networking and economic diplomacy between Tanzania and Mozambique,” he says.

The High Commissioner argues that these opportunities are being reinforced by Africa’s expanding regional integration agenda.

Through the African Continental Free Trade Area (AfCFTA), the Southern African Development Community (SADC) and stronger linkages between SADC and the East African Community (EAC), businesses can access larger markets, reduce trade barriers, strengthen regional supply chains and pursue joint investments.

“Regional integration provides one of the greatest opportunities for Tanzania and Mozambique to expand trade and industrial cooperation,” he says.

He notes that Mozambique’s Nacala, Beira and Maputo Corridors provide strategic access to Southern African markets, while Tanzania’s ports, railway network and expanding industrial capacity connect businesses to East Africa.

Rather than competing, the two countries should leverage these complementary strengths to build integrated production and distribution networks.

“Mozambique can provide access to Southern African markets and strategic infrastructure, while Tanzania can contribute manufacturing capacity, skills, logistics networks and access to East African markets,” he says.

Efficient logistics, the High Commissioner adds, remain fundamental to unlocking this potential. Reliable transport infrastructure, efficient border management and modern trade facilitation systems are essential to reducing costs, shortening delivery times and improving the competitiveness of exporters.

“Improving logistics connectivity is essential for expanding bilateral trade,” he says.

Priority areas include strengthening road and railway links, modernising border facilities, improving customs efficiency, expanding digital trade facilitation systems, enhancing cooperation along transport corridors and maximising the use of strategic ports.

He says the Nacala, Beira and Maputo Corridors, together with the ports of Dar es Salaam and Mtwara, should be viewed as complementary regional logistics networks rather than competing routes.

“The Nacala, Beira and Maputo Corridors provide opportunities for Tanzania to access Southern African markets, while Tanzania’s ports, including Mtwara and Dar es Salaam, can support regional trade flows,” he says.

For CP Khamis, transport infrastructure is no longer simply about moving goods, but about connecting producers, markets and investment opportunities across Africa.

“Transport infrastructure should therefore be viewed as economic diplomacy that connects producers, markets and investment opportunities across Africa,” he says.

He stresses that businesses must complement improved infrastructure by establishing a permanent presence in Mozambique through local partnerships, distribution networks and production facilities.

“The experience of Tanzanian companies operating in Mozambique demonstrates that long-term success comes from establishing a permanent presence and building local partnerships,” he says.

Companies such as Bakhresa Grain Milling LDA, METL Group, Naggy Investment Co. Ltd, Manning Nice Investment, Afritool (PTY) Ltd, Mount Meru Petroleum Mozambique, Optiflite Mozambique LDA, as well as Tanzanian engineering, architectural and construction firms, have already demonstrated the benefits of investing locally and tailoring services to market needs.

“They demonstrate that Tanzanian companies can successfully compete in Mozambique by understanding local conditions, forming partnerships, investing for the long term and delivering quality products and services,” he says.

The High Commissioner also points to growing two-way investment, including Mozambique-linked investments in Tanzania such as Cosmos Properties Limited and Tanzania Razor Blade Manufacturing Limited, as evidence of increasingly balanced economic relations.

For new exporters, he says, Mozambique should no longer be viewed merely as a neighbouring market, but as a strategic gateway to Southern Africa.

The next phase of bilateral economic cooperation, he argues, will depend on how effectively Tanzania and Mozambique transform their complementary strengths into integrated regional industries.

CP Khamis identifies agriculture, energy, mining, manufacturing, logistics and healthcare as sectors with significant potential for joint production, contract manufacturing and cross-border industrial partnerships between Tanzania and Mozambique.

In agriculture, he says, closer cooperation in food processing, storage, packaging and agricultural inputs can strengthen food security while creating regional value chains.

“Joint investment in food processing, storage, packaging and agricultural inputs can strengthen food security and create regional supply chains,” he says.

Energy presents another major opportunity. Mozambique’s abundant natural gas resources, combined with Tanzania’s growing industrial base, could support fertiliser production, chemical industries, electricity generation and other downstream industries that add value before products reach international markets.

The High Commissioner also points to the global transition to clean energy as an opportunity for both countries.

Tanzania and Mozambique possess strategic minerals essential for emerging technologies, making cooperation in graphite processing, battery materials and mineral technologies increasingly important.

“Both countries have strategic minerals with potential for value addition. Cooperation in graphite processing, battery materials and mineral technologies could position the region as a participant in global clean-energy supply chains,” he says.

Manufacturing, logistics, healthcare and engineering services also stand to benefit from expanding regional trade and the implementation of the African Continental Free Trade Area (AfCFTA), which is creating demand for integrated regional supply chains.

Looking ahead, CP Khamis urges Tanzanian businesses to view Mozambique not merely as a neighbouring consumer market, but as a strategic partner and gateway to Southern Africa.

“Tanzanian exporters should position Mozambique as a strategic economic partner and gateway to Southern Africa rather than only as a consumer market,” he says.

He recommends increasing valueadded exports, establishing joint ventures with Mozambican companies, investing in regional production networks, making greater use of transport corridors and ports, and leveraging opportunities under AfCFTA and SADC.

According to the High Commissioner, this approach aligns with Dira 2050 (Tanzania’s Development Vision 2050).

With Tanzania strengthening its manufacturing capacity, investment climate and transport infrastructure, and Mozambique offering abundant natural resources, strategic ports and direct access to Southern African markets, the two countries are well positioned to build an economic partnership that supports regional industrialisation.

“With Tanzania’s growing industrial capacity, strategic location and investment reforms, and Mozambique’s natural resources, ports and access to Southern African markets, the two countries can develop a partnership that supports regional industrialisation,” he says.

He adds that stronger production linkages, value addition and cross-border investment can drive employment, technology transfer and Africa’s wider economic transformation.

“A stronger Tanzania–Mozambique economic partnership will therefore contribute to increased trade, investment, employment creation and Africa’s broader economic transformation.”