Mozambique--Africa's rising star: Mozambique's tourism sector is flourishing thanks to legislative reforms and the opening of high quality hotels and resorts throughout the country. Stephen Williams reports on the work still in progress.

Speaking at a congress of tour and travel agencies being held in Maputo last November, Mozambique's prime minister Luisa Diogo, confirmed that her country had attracted over 700,000 tourists in the previous 12 months and that the government's own projections see this number growing to four million visitors a year by 2025.

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The incredible growth in visitor numbers being anticipated is due to a number of legislative reforms including the approval of a new tourism code, investor-friendly regulations for the sector and an initial strategic tourism development plan to be implemented over the next seven years.

One important development has been a bilateral agreement reached by Mozambique and South Africa to allow their citizens to freely travel between the two countries for stays of up to 30 days, without the need for visas. Similar visa-free arrangements have also been made with Malawi and Swaziland.

According to Mozambique's minister of tourism, Fernando Sumbana, the abolition of visas will give a huge boost to Mozambique's tourism sector. South Africans currently account for the majority of Mozambique's tourists. But many South Africans choose to travel in their own cars, use campsites and bring most of their provisions with them. Consequently, their average spend is comparatively modest. However, as Mozambique's tourism infrastructure is upgraded, Sumbana believes higher spending visitors from South Africa and further afield will want to holiday in Mozambique.

A further initiative aimed at boosting tourism is a proposed 'single visa' for the entire Southern African Development Community (SADC) region. Mozambique has been discussing this initiative with its SADC partners and talks are said to be at an advanced stage. The single visa would encourage more visitors to the SADC region to include Mozambique on their itineraries.

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Currently, there are 5,030 tourist establishments in Mozambique directly employing over 35,000 people. Investment made in Mozambique's tourism sector over the last five years has increased the country's accommodation capacity by 30% to over 13,000 beds.

Importantly, tourism provides better employment opportunities for women than many other economic sectors. Currently, of the 35,000 people employed in the industry (a substantial growth since 2000 when the figure stood at just 25,000) 11,500 are women.

It is not just the south of the country--the focus of much of Mozambique's foreign direct investment growth in recent years--that is readying itself for a tourism boom. Northern Mozambique is also seeing a new wave of tourism projects with government having approved a total of 38 investments worth about $65m.

Sumbana has told parliament that these projects, mainly to be implemented in Niassa, Cabo Delgado and Nampula provinces, include tourist resorts, hotels and wildlife conservation areas.

The minister recently commented that while historically, northern provinces had problems attracting tourism projects because of the lack of adequate transport infrastructure, today the north is recognised by international investors as having some of best development prospects in the country.

He made these remarks at the opening of a tourism fair in the country's capital, Maputo. A total of 70 exhibitors from different parts of the SADC region attended the event, including hoteliers, travel agencies and airline companies.

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New hotels

A significant investor in Mozambique is the Portuguese group, Visabeira, which has inaugurated a $6m four-star hotel complex in Nampula province.

Another hotel group, VIP, already operates the five-star VIP Maputo and plans to open two more quality hotels in the capital. VIP has also taken over the Hotel Beira, in the central province of Sofala. Hotel Beira has not operated for the past decade, but VIP will initiate an extensive renovation and modernisation programme to create a luxury hotel and conference centre.

As African Business reported last month (Mozambique's FDI bonanza), the biggest investor in Mozambique's hotel and tourism sector has been the United Arab Emirate-based Rani International Group. So far the group has invested about $60m in tourism projects in Mozambique.

Recently, its chairman, Adel Ajuan, announced a doubling of its total investment in Mozambique to over $120m within the next three years. To date, Rani's largest investment project has been the Indigo Bay Holiday Club on the five-island Bazaruto archipelago in the southern province of Inhambane, built at a total cost of $30m.

Rich physical assets

What all the major investors in Mozambique's tourism sector have recognised is that the country is a unique destination. All of Mozambique's neighbours have an Anglo-Saxon colonial past, meaning that Mozambique remains the only country in Southern Africa, indeed the world, that offers a cultural environment with a rich heritage of Arabic, Swahili, Portuguese and African influences.

Mozambique's key physical assets are the unspoiled quality of its beaches, wilderness areas and national parks. The Great Limpopo Transfrontier Park (GLTP) project is the jewel in the crown of its wildlife conservation areas. Mozambique shares this wildlife sanctuary area with South Africa and Zimbabwe.

Last December Mozambique secured a $20m International Development Association credit from the World Bank to support the conservation of biodiversity and natural ecosystems. The credit will be used to further develop the GLTP and other wildlife parks in the country.

Although there has been some dispute over how tourist park entry fees from the GLTP should be shared between the three partner nations--with South Africa arguing that as the Kruger National Park attracts by far the greater number of visitors, it should receive the 'lion's share' of GLTP revenues--GLTP officials nevertheless believe this wrangle can be resolved and Presidents Armando Emilio Guebuzu of Mozambique, Thabo Mbeki of South Africa and Robert Mugabe of Zimbabwe will officially open the park to the public towards the middle of this year.

RELATED ARTICLE: AIR TRANSPORT

State takes control of aviation

A healthy aviation industry is crucial to Mozambique's ambitions to attract greater numbers of international tourists. Since President Armando Guebuza took over the reins of state 12 months ago (February 2005) his government has made two not entirely unconnected policy shifts with regard to the state's role in the sector.

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Firstly, the government has suspended a deal that was to have seen the country's main airport at Maputo being run by the Airport Company of South Africa (ACSA) which operates South Africa's major international airports.

This deal had almost been concluded by ACSA and the previous administration of former President Joaquim Chissano and was to have involved ACSA holding a controlling stake of 67% and agreeing to invest some $35m to rehabilitate the ageing airport.

The second decision that President Guebuza's government made was the cancellation of the privatisation of the national airline company Linhas Aereas de Mocambique (LAM). For many years the Mozambican government has contemplated the sale of 51% of its 80% stake in LAM to a 'strategic partner'.

LAM was transformed into a limited liability company and its workforce took a 20% stake in the company following the failure of the first privatisation attempt in 1996.

Government gave no clear indication as to why it had made these two decisions, but a senior aviation official told African Business that the new policy is an attempt to keep strategic companies under state control whilst a 'commercialisation' strategy is undertaken. It is believed that LAM will not be privatised, at least not in the short to medium term, while restructuring continues.

LAM employees, from pilots, maintenance technicians, cabin crew and managers to ground staff all took part in a comprehensive training programme last year, in part to meet the growing challenge of competitor airlines that are seeking to operate in Mozambique's increasingly liberalised 'open skies'.

At present, LAM is operating three Boeing B737 aircraft providing domestic connections from the capital Maputo to the main cities of the country--Beira, Nampula, Quelimane, Pemba, Lichinga, Chimoio and Tete. LAM also operates regional routes to destinations such as Dar es Salaam and Johannesburg.

MEXMocambique, an airline wholly controlled by LAM, and the privately owned TransAirWays, serve other routes. They not only serve domestic routes, complementing LAM's services, but also fly to regional destinations such as Durban, Mayotte and Harare.

Air Corridor is another new private airline with ambitious plans to fly to neighbouring states. It is currently negotiating the purchase of two Boeing 737s to extend its flight network. The Mozambican owned airline, based in the northern province of Nampula, already serves Maputo, Beira, Tete, Lichinga and Pemba, and has been flying to Johannesburg, South Africa and Dar es Salaam, Tanzania since last June.

Kenya Airways has also inaugurated a new twice-weekly service from its hub at Kenya's Jomo Kenyatta International Airport to Maputo via Harare, Zimbabwe.

However, while domestic and regional routes are under severe competition from new airlines, LAM has new agreements with several foreign airlines, such as Emirates, Qatar Airways and Singapore Airlines, that offer customers a seamless, one ticket service to a number of new destinations throughout the Gulf and Far East.

Talks are also underway between LAM and its Portuguese counterpart, TAP, exploring the possibility of a four-times-weekly direct flight between Maputo and Lisbon. Both the Mozambican transport minister, Antonio Munguambe, and TAP chairman Fernando Pinto have confirmed that the eventual goal will be to offer daily flights between the two countries.

Those services would open up alternative routeings to many European cities and transatlantic flights avoiding the congestion of Johannesburg's regional hub.