World Bank's MIGA Meets Mozambican Officials

World Bank's MIGA Meets with Mozambican Officials and Business Reps
Talks focus on increasing foreign investment

Maputo, December 4, 2002—The Multilateral Investment Guarantee Agency, a member of the World Bank Group, can play a strong role in helping Mozambique attract foreign investment, MIGA's Vice President for Underwriting, Roger Pruneau, said Wednesday in a meeting with President Joaquim Chissano.
The talks came during a visit by Pruneau and a delegation of MIGA representatives to discuss ways in which the agency can further help Mozambique encourage foreign investors to set up businesses in the country. Meetings were also held with government officials, including Finance Minister Luisa Dias Diogo, and members of the business community.

"Mozambique has taken remarkable economic strides in recent years, fueled in part by foreign direct investment," said Pruneau. "We at MIGA look forward to continuing to help Mozambique sustain that growth and foreign investment through our guarantees program and technical assistance."

MIGA provides guarantee coverage (insurance) against non-commercial investment risks such as transfer restriction, breach of contract, expropriation, and war and civil disturbance, offering protection to private investors who find business opportunities in Africa attractive but may be concerned about political risks.

Since becoming a member of MIGA in 1994, Mozambique has hosted fifteen agency-backed contracts totaling $190 million in guarantee coverage. Foreign direct investment facilitated by MIGA to date is about $1.5 billion.

Today, Mozambique is the 9th largest host country in MIGA's overall portfolio in terms of outstanding coverage. MIGA has supported projects in the country's agribusiness, financial, infrastructure, manufacturing, and tourism sectors. One investment, by Mauritian and South African investors, involves the rehabilitation and partial privatization of Mozambique's largest sugar estate (Marromeu). The project, in the war- and flood-ravaged north of the country, will have important employment and import substitution effects. MIGA is also supporting the Mozal "mega" project, the second largest aluminum smelter in the world. In addition, MIGA is currently finalizing several "South-South" infrastructure and manufacturing transactions with regional investors.

Mozambique is one of four pilot countries covered under the MIGA-Swiss Government Initiative, launched in early 2002. The program is helping investment promotion intermediaries of selected African countries reach out to international investors to attract foreign direct investment to serve global markets. Under the initiative, MIGA is providing technical assistance to Mozambique's Investment Promotion Centre (CPI).

"The launch of the MIGA-Swiss program is well timed for Mozambique, as it supports the non-traditional export industry, an area that holds considerable potential and is encouraged by the government," said Pruneau.

For information

Angela Gentile, agentile@worldbank.org,
t. 202.473.3509