Interview with H.E. João Matlombe, Minister of Transport and Logistics, Mozambique

30 Jul Interview with H.E. João Matlombe, Minister of Transport and Logistics, Mozambique

What key reforms do you intend to prioritize to restore safety, financial sustainability and confidence in Mozambique’s aviation sector through the civil aviation master plan, for which public consultations have launched recently?

One of the challenges we took on at the beginning of our mandate was to organize the entire civil aviation system, looking at its essential components. We have infrastructure, namely airports. Looking at the regulator, we aim to strengthen its capacity. The third component is the airlines. All services can only function properly if these components are well coordinated. Without adequate infrastructure and safety at airports, we will not have the best services. Likewise, without a functional airline, the system will not be complete. Our country is very vast and we face issues regarding our road network. Therefore, connectivity through airspace is essential for the country.

With this in mind, we designed the master plan to define how we can guide private sector investment and how we, as a government, can position ourselves to stimulate and participate in that same sector.

The key measures introduced in the new master plan relate, first and foremost, to private sector involvement in airport management. We have several options and the one we have adopted, currently in the consolidation phase and included in the master plan, is to open airport management to the private sector by regions.

Our market and infrastructure have capacity in each region. In the southern region, the main infrastructure, with the highest volume and demand, is Maputo International Airport. In the central region, Beira is the main airport, along with other provincial airports. In the northern region, Nampula serves as the main airport. The north of the country will be the trial region where we will move forward to address certain challenges. We already have a proposal from Total to invest not only in the port component but also in an airport, in order to facilitate logistics in that area. At present, we are preparing the conditions to launch concessions in the northern region.

In addition, we aim to make the airport in Nacala viable. The goal is to transform Nacala, in our view, into the largest logistics hub in the region. Nacala Airport could be more competitive than South Africa in this region. From Nacala to Dubai, or other points in Asia, is approximately a six-hour flight, whereas from South Africa to Dubai it is about eight hours, therefore we have a competitive advantage.

Even more importantly, Nacala is easily connected to Lilongwe, Harare and Lusaka. The idea is to understand how we can bring that region to Nacala and, from Nacala, fly to Asia. We are working with several airlines to establish partnerships that would allow us to create an intercontinental connection from Nacala. That is the major reform.

Another challenge is to resume pilot training. We were pioneers in the past and trained many pilots, but unfortunately there was a discontinuity. Within the vision defined in the aviation master plan, we decided to relaunch human capital training in our region, making use of existing infrastructure. The idea is to transform Filipe Jacinto Nyusi Airport into an airport also dedicated to pilot training.

Regarding the airline, we carried out a strong reform last year and will now move to the second phase. We found the company without any aircraft and with a very high deficit. We carried out financial restructuring work. Last year, we acquired four aircraft. This year, we are working to implement a plan to acquire up to six aircraft. We are also seeking a strategic partner to operate intercontinental flights. We are open to Japan, with strong interest, due to the connectivity we can develop. Currently, reaching Japan often requires connections via Dubai. All of southern Africa has to fly to Ethiopia, which is quite far, despite having a market here. We want to capitalize on the Asian market. We have an interest in and maintain an excellent relationship with Japan.

The Nacala, Beira and Maputo corridors are increasingly seen as engines of regional trade and gateways for mineral exports. How is your Ministry working with the Japanese and other international partners to improve rail, port and dry port infrastructure along these corridors?

We have benefited from investments in the modernization of the Port of Nacala and during the Tokyo International Conference on African Development, the Japanese government once again showed interest in continuing its investment in that port. We also have investments at the airport level, including the acquisition of equipment, simulators and all safety equipment for air navigation. We continue to rely on the support of the Japanese government, through the Japan International Cooperation Agency, including in the training of human capital.

Nacala, in particular, given its strategic position as one of the best deep water ports in the region, led us to sign, in December last year, an agreement among four countries, Mozambique, Malawi, Zambia and the Democratic Republic of the Congo, to develop the Nacala Corridor, namely for the construction of the Nacala railway line. line. This project spans approximately 1,500 kilometers. The section we will build is located within Zambézia Province, covering around 350 kilometers, to ensure connectivity.

With this section, we aim to channel minerals from the southern region of the Democratic Republic of the Congo, including Zambia’s mineral resources. Currently, Zambia exports about three million tons of minerals per year from various points to different countries. In ongoing negotiations, Zambia projects increasing this volume from three to five million tons by 2030, meaning they need Nacala. This is why we signed this agreement and are preparing to launch an international public tender to find partners who can accelerate the construction of the railway line and ensure connections to the areas where mineral resources are located.

Regarding neighboring countries, we are changing both our perspective and approach. Previously, we understood that they had privileged access to the use of national ports, which led other countries, such as Angola, to develop their own infrastructure. These are costly solutions, considering the long distances involved. This only occurred because we did not create adequate infrastructure or facilitation measures.Within the scope of bilateral agreements, we have decided to allocate specific areas so that, in this case, Zambia can have a dedicated dry port in Nacala. We have done the same with Malawi, working to ensure it also has its own dry port, facilitating the logistical organization of its companies. This is essential, including for ensuring predictability.

At present, there is a very serious issue in terms of storage capacity, which at times affects the economy and generates significant social and political impact, as ports become congested. As a result, there are delays in receiving essential goods. We are confident that the new infrastructure will improve predictability, facilitate cargo handling and customs clearance and enable the government to respond more effectively to the business communities of these countries. We believe this approach can change the situation for the better.

Apart from not replicating facilities in other countries around the region, what cost savings and economic incentives are there in operating the Nacala Corridor project?

Regarding the Port of Nacala, we are currently working on the development of a Special Economic Zone, which is particularly relevant in that region. Nacala is located in a strategic area, encompassing the province of Nampula as well as Zambézia and Niassa, provinces with strong agricultural potential. We believe that the development of the Special Economic Zone could significantly boost the country’s food sovereignty and food security. Our approach is aligned with this objective.

As for the other corridors, in Beira we are making investments with the private sector in the construction of an access road and a logistics center, with a view to creating an integrated port. Overall, we are talking about an investment of around $600 million in the corridor. We will also intervene in Beira to build a second fuel berth, doubling capacity, and to expand both the container terminal and the general cargo terminal. Beira has great potential but is currently congested and requires investment. It is a challenge, but we are shifting resources to improve the situation.

In Maputo, the situation is positive, although challenges remain. Investments of around $2.5 billion are underway, of which $2 billion are allocated to the Port of Maputo, including the doubling of capacity in the container terminal, general cargo and coal terminal. We are also intervening on the EN4, the road linking Mozambique to South Africa. We have also invested in duplicating the railway line connecting the Port of Maputo to South Africa and will begin an investment of around $20 million at the Ressano Garcia border. The Maputo Corridor is therefore at an advanced stage, with significant investments underway. This is the model we intend to replicate in Nacala.

Several initiatives are underway to modernize border posts and reduce logistics costs. What are your priorities in terms of customs digitalization, one stop border posts and regional agreements to facilitate the movement of goods and people across Mozambique’s borders?

During this mandate, we have identified five key border points to promote integration. Digital integration will facilitate customs clearance and reduce costs. At present, we are able to exercise greater control over potential losses across the entire value chain, particularly in transport and, more specifically, in the time lost.

In the Maputo Corridor, which is more structured and organized, waiting times at the border currently range between 12 and 18 hours. Our main objective is to reduce this time. This situation occurs because platforms are not yet fully integrated and trucks end up taking longer when coming from South Africa. At this stage, we are able to monitor virtually the entire flow, from the border to the port and vice versa, with a level of control close to 100%. We are implementing a platform that was already partially dedicated to the corridor. We have hired a consultant to expand this platform, with the aim of ensuring full visibility of cargo flows, from the point of import to final destination. We are developing and integrating this platform not only at the port level but also across borders, airports and all cargo entry points. Our goal is to have a single state platform that facilitates imports and cargo management. We intend to replicate this same concept in the Beira Corridor. This will allow companies to decide whether they want to receive cargo in Dondo, where we will build a dry port, or in Machipanda. This solution improves visibility of cargo flows and reduces pressure on Beira. From the standpoint of state organization and efficiency, this is essential for better resource management.

Another important aspect has been the analysis of the value chain and the entire cost structure of logistics services. We found that there are costs being charged without a clear corresponding service, or whose justification is linked to commissions or other unclear fees. We are therefore restructuring this component.

There is also the issue of cost standardization. It does not make sense for fuel handling to cost $15 in Maputo, $10 in Beira and $8 in Nacala when it is the same service. This disparity makes our ports less competitive. We are working to standardize these costs.

Another area of intervention in the cost chain concerns the deadlines and guarantees required by shipping lines for containers. High fees are being charged, with return periods of up to 90 days, which significantly increases costs. If a container arrives on the 10th, there is no need to provide a guarantee for 90 days; this period could be reduced to 30 days. From a financial standpoint, the main beneficiary ends up being the bank, which profits from deposits in an activity that is not its core function. The role of shipping lines is to ensure transport, not to act as financial institutions.

We are hard at work ensuring that every facet that is actionable is properly organized. There is still a set of measures that can be implemented to reduce costs and ensure that the final product reaches consumers at a lower price.

Recent government statements have emphasized the need for increased investment in rural roads to support agricultural distribution. How do you plan to integrate rural road rehabilitation into a broader logistics strategy that connects agricultural producers to domestic and international markets?

Last year, we designed a program that we will launch this year, involving three ministries, the Ministry of Transport and Logistics, the Ministry of Agriculture and the Ministry of Economy. The program is based on two components. The first relates to development corridors, connectivity and what infrastructure can do to boost agricultural and tourism production. A road, in itself, already has that potential. At the rural level, we have defined a program for rural road connectivity. We selected 15 districts across the country with agricultural potential, capable of producing a range of commodities that are currently destined for export. We met with district administrators and established priorities. It is not possible to intervene across the entire country at once, so we focused on identifying where we can facilitate the movement of products from production sites to markets, reducing losses and increasing returns.

We face a significant level of production losses due to transport difficulties. Simply improving infrastructure will already help us better capitalize on this production, ensuring that goods can reach the market. The provinces included at this stage are Manica, Sofala, Zambézia, Nampula, Niassa and Cabo Delgado, in the central and northern regions of the country. Fifteen districts were selected based on clear indicators, allowing us to state that by intervening in the identified roads, we can contribute to food sovereignty and security by ensuring that products leave rural areas and reach urban centers. In addition, these roads will also facilitate exports to neighboring countries such as Malawi and Zambia, which border some of these provinces. The program covers not only production areas but also leisure zones, such as reserves and parks, thereby integrating a tourism component.

In this initial phase, the program includes two main components and covers 15 districts. Our approach is to build local capacity so that districts themselves can improve their roads. We are acquiring equipment and training technical staff. The intervention will be carried out using local and resilient materials, avoiding exclusive reliance on central government resources.

The idea is to build low cost roads using locally available materials such as limestone and stone. What is mainly required is appropriate equipment. We conducted a benchmarking exercise, taking our teams to observe this model in Luanda and in India, so they could understand how it works and assess the sustainability of the work. We have a dedicated team working on this initiative and are ensuring its implementation. We are also collaborating with universities, aiming to select top students to be involved in coordinating the programs. We are fully committed to this initiative.

Which specific projects in aviation, ports, railways, or logistics platforms would you highlight as the most appealing entry points for Japanese companies interested in partnering with Mozambique?

Japan is, I believe, one of the countries with the best railway networks in the world. I am very familiar with this reality, as I studied and carried out various projects related to Japan and I believe it can make a very significant contribution.

We are focused on national connectivity. Our road network was essentially built to connect our ports to neighboring countries. This means we are not fully capitalizing on our national potential when it comes to moving goods from one province to another by road.

For this reason, we will launch the north south railway line. This represents a very significant opportunity for Japanese companies which, given their experience, could play a role in this strategic logistics chain, not only in agriculture but also in mineral exports.

There is also an important opportunity for Japan linked to our cooperation relationship: Nacala, specifically the Nacala Corridor. The government of Malawi has formally expressed interest in this project, making the development of the corridor essential to facilitate access for neighboring countries to our port. Japan has already invested in the Port of Nacala, which is currently operating at around 30% of its capacity, a very low level. To fully unlock the port’s potential, we need the railway line. In this regard, Japan plays a very important role and we believe it can support us in this area.

Another key aspect is human capital development, particularly in logistics. This remains a challenge for improving our services and upskilling our workforce. We believe that cooperation with Japan can add significant value, especially in this area.

In terms of infrastructure, we also developed urban transport projects with Japan that were not implemented. We have invited Japan to resume this collaboration in two cities. We have the Beira-Dondo project, with approximately 45-50km of railway line, which is fundamental. In Maputo, we also have the Automated Guideway Transit project, which was designed with Japan and which we remain interested in advancing.

Would you like to leave a final message for readers of The Japan Times?

I would like to highlight our work and express our full openness. If you encounter any difficulties, whether related to procedures, regulations, or accessing information within the logistics sector, I am available to assist. We need greater visibility and outreach. The projects I have mentioned, such as the north-south railway line and the Nacala Corridor, are of near international scale. Therefore, we will need support to ensure broader participation from companies which will lead to more solutions.