ECR: Mozambique tops East Africa rankings after gas discovery

A panel of economists awarded Mozambique a country risk score of 38.8 in the first quarter of 2011, meaning that the country finished 101st in the overall table. Kenya came second in the East Africa survey, which assesses countries across a range of political, economic and structural risk criteria, with a score of 38.7. Ethiopia achieved third place with 38.5. The results mean that economists considered Mozambique to be the sixth safest country in Sub-Saharan Africa in which to invest, behind South Africa, Botswana, Namibia, Ghana and Nigeria. Investor interest in Mozambique has been spurred by the discovery of large reserves of natural gas in February last year. The reserves, in the Rovuma basin in the north of the country, are estimated to hold as much as 127 billion cubic metres of gas. The country’s economy, which has grown by 9% per year since 2000, has been boosted by a 10% increase in tourism receipts in the last four years and by large-scale investments in infrastructure and mining. Inflows of foreign direct investment soared last year, jumping by 400% to reach a record $800 million. In the Political Risk component of the survey, Mozambique, which has enjoyed stable democratic rule for more than a decade, received a score of 47.0 out of a possible 100, the highest in the region. The country received improved scores in the Government Stability and Non-Payments/Repatriation of Capital categories. Mike Davies, a freelance political risk analyst, says: “The political system in Mozambique has changed from the vanguard revolutionary movement of the early nineties to a relatively stable democracy today. Along with the country’s positive economic growth prospects, this stability is driving Mozambique’s Euromoney Country Risk score.” View the full Euromoney Country Risk East Africa Rankings
  

A version of this article first appeared in Euromoney Country Risk. Euromoney Country Risk is an online service from Euromoney dedicated to sovereign and country risk.