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What is the Experience and Impact of South African Trade and Investment on the Growth and Development of Host Economies?
A View from Mozambique1

Carlos Nuno Castel-Branco2

This paper was presented at a SARPN/CWCI workshop on South African trade and investment in southern Africa.
The full set of conference papers can be accessed at:
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This paper discusses and analyses the experience and impact of the dynamics of South African investment and trade in Mozambique, as part of a more general analysis of the role of the South African system of accumulation in southern Africa.

The paper was initially presented in a shorter PowerPoint version at the 'Conference on Stability, Poverty Reduction and South African Trade and Investment in southern Africa'. It discusses how South African investment and trade patterns associated with the expansion of the minerals and energy complex (MEC), and other oligopolistic industries, has shaped the system of accumulation in Mozambique. The paper argues that a broader development basis and dynamic needs to emerge, and that this can be achieved only through a regional and international perspective.

The paper is organised into seven sections. The next section discusses the economic linkages between South Africa and Mozambique in historical perspective. This is followed by a section that looks at the dynamics of growth and trade in Mozambique and the influence of the South African system of accumulation. Section four discusses the dynamics and impact of South African foreign direct investment (FDI) in Mozambique. Section five studies two specific examples of the role and implications of the MEC in Mozambique, namely in aluminium and natural gas. Section six discusses the nexus between macroeconomic conditions and policies, the characteristics of productive and trade capacities, and investment trends in Mozambique. Finally, section seven draws some conclusions on the overall debate.

  1. This paper is an extended and developed version of a presentation made at the "Conference on Stability, Poverty Reduction and South African Trade and Investment in Southern Africa", organised by SARPN/HSRC, which took place in Pretoria on the 29th and 30th of March, 2004. I would like to thank the Conference organisers for having invited me to the Conference, and the participants and discussants for having helped to develop this paper.
  2. Professor of Economics in the Faculty of Economics at the Eduardo Mondlane University, Maputo, Mozambique. Contact at: and

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