Export-Import Bank of India has, at the behest of government of India, extended a line of credit of US$20mn to the government of Mozambique. The credit will support India’s exports of equipment, goods and services to the African country.
Under the credit line to Mozambique, the entire 100% of FOB contract value would be reimbursed by India Exim to the Indian exporters, whose contracts are approved by both sides, upfront upon the shipment of goods. The government of Mozambique has nominated the central bank, Banco de Mocambique, as the executing agency from the Mozambique side.
Mozambique has registered strong real GDP growth in recent years which is expected to continue in 2004 and 2005, driven by output from the industrial mega-projects that are coming on stream, as well as by investment and robust performance in a range of other sectors. In 2004, real GDP growth is expected to rise to 8%, owing to the high levels of foreign direct investment directed towards large-scale investment projects, including the expansion of the Mozal aluminium smelter and the construction of a gas export pipeline to South Africa.
India’s exports to Mozambique amounted to US$64.74mn during 2003-04, registering a growth of 38% over the previous year. Non-basmati rice, man-made yarn and made-ups, transport equipments, machinery and cotton yarn made-ups were the principal items in India’s export basket to Mozambique in 2003-04. The just concluded line of credit is expected to boost Indo-Mozambique trade further, as there is considerable demand in Mozambique for Indian capital goods for infrastructure projects, rural electrification and transport sectors.