Mozambique banks on SMEs to drive economic growth

Resource-rich Mozambique may grapple with rising public debt and foreign currency shortages, but the potential for further growth lies with SMEs, says Nedbank Mozambique’s MD Joel Rodrigues.

While the country’s key industries include heavy mineral sands extracted from sand dunes, coal, LNG, and aluminium, a focus on SME growth could provide more expansion.

“We need to diversify the base of the economy. But at the same time, what is the normal SME in Mozambique? It’s an SME that is run by a self-made woman or man without the knowledge to internationalise the entity,” said Rodrigues.

While SME growth is gaining traction across the country, larger local corporations are also expanding their footprint and investing in regional growth. Among the businesses financed by Nedbank Mozambique is Merec, a family-owned milling and food production company.

Founded in 1998 as a corn/maize mill, Merec owns the only industrial lines for breadmaking in Mozambique, where it remains mostly artisanal. Its distribution channels include 300 kiosks where bread is sold daily.

Mualide de Sousa, director for quality and I&D at Merec, said its main mill in the city of Beira was not only the biggest in Mozambique, it was one of the biggest in the region. It was commissioned in 2025.

Merec has two other mills in Beira. “This is why Beira has become the biggest site; this means from here we can export. We can send [bread] to the north and south. It is a strategic decision we took considering Beira’s position,” she said.

Merec has three pasta production lines in Beira and two in the capital Maputo; and the plan is that by next year another pasta line will be opened in Nacala, in northern Mozambique.

De Sousa said because the group does not produce wheat, it imports it and has significant storage capacity. “Having the capacity to store wheat means we can bring in vessels every 45 days. We have sufficient storage to keep us going even if something happens. We can still have a buffer stock. Without it we would be without our main raw material,” she said.

Because the quality of wheat from South Africa does not serve the group, Merec imports high-quality wheat from markets including Canada and Russia. It has silos at the Port of Maputo, which improves efficiencies.

“We are not only increasing the capacity of the silos, but we also have a project where we are putting in railways to serve inland countries,” she said.

Since 1998 Merec has expanded into biscuits and pasta. Its pasta division has one of the strongest local brands, Bela.

De Sousa said the group created a market for pasta in a country where staples include xima, a porridge made from maize flour, and matapa made from crushed cassava, by appealing to the youth market. She said young people found pasta more convenient after a long day at work.

Merec currently exports its pasta from Beira to Zambia, Zimbabwe and Malawi. It produces Bela, an entry-level pasta, and Davinci a premium pasta made from durum wheat.

It is more expensive to bring a truck from Beira to Maputo than to bring a ship from Argentina to Maputo per tonne

—  Luis Aveleira, executive board advisor at Merec

Merec also exports the Bela brand to South Africa from its Maputo plant, and soon it will be exporting the brand to the Middle East

Luis Aveleira, executive board adviser at Merec, said logistics were a problem in Mozambique. “It is more expensive to bring a truck from Beira to Maputo than to bring a ship from Argentina to Maputo per tonne. It is the quality of the infrastructure. Our fuel is expensive, but it is still half of the international price,” he said.

Nedbank in Mozambique previously operated as Banco Único until it rebranded in 2021 and is now the sixth-biggest bank in the country. The expansion into the country was part of diversifying into the rest of the continent. It has 15 branches covering major cities including Maputo, Beira, Nampula and Nacala.

Rodrigues said while Mozambique had short-term challenges, the long-term fundamentals remain strong. He said the country’s strengths included how it had been supportive of the South African economy, pointing to the Port of Maputo becoming an alternative for South African exports.

He said Nedbank was bullish about Mozambique in the next five years, even considering all the challenges it faces. “We should not confuse short-term challenges with long-term value, long-term growth,” said Rodrigues.

“Sometimes the only news is not so good news, because people tend not to comment more on that kind of news. But I also think that everyone has a role building up the story of the country. So, if we can support that, we are more than happy to do it.”

Mozambique, with a population of 36-million, generates the bulk of its revenue from agriculture and gas extraction, including mega gas projects that have attracted billions in investments.

• Faku was a Nedbank guest during a media tour to Maputo