Interview with Dr. Mateus Magala, Minister of Transport and Communications

29 May Interview with Dr. Mateus Magala, Minister of Transport and Communications

The Ministry of Transport and Communications directs, coordinates, plans and ensures the implementation of all policies, strategies and plans for multimodal transport, such as road, rail, sea and air. What is the weather right now in this country? Could you tell us about the evolution of the multimodal system in Mozambique in recent years, what are the most used transports and some highlights of the objectives set by the ministry for the sector?

The Ministry of Transport and Communications is perhaps one of the most complex ministries in the country, in a sense that it comprises a lot of sectors. It’s air transport, road transport, rail transport, maritime and river transport, but it also includes the telecommunication side, including the postal and communication services. You can appreciate the range of challenges that we have.

Nevertheless, we have established five priorities for this government in the sector. The first one is mobility, the second one is road safety, the third one is productivity of the corridors – Mozambique has three corridors: the Southern Maputo corridor, the central Beira corridor, and the Northern Nacala corridor which serves the hinterland and the international trade. The fourth one is digitalization, the digital transformation of the country, transforming our economy into digital economy as a way to take advantage of the future where we will all be, and which is shaped by the fourth industrial revolution. The last priority has to do with reforms. The ministry has also state-owned enterprises: the airline, the railway company, the telecommunications company, the maritime company, etc. Some of them are not doing well and are not performing to what was their initial mandate, which was to create a financial space for the government in an environment to compete with the private sector. They have been, in a sense, not maximizing their potential, and hence, the need for reform. Others were performing because the new competitive environment, the new global supply chains and opportunities require new ways of thinking, of seeing things. That’s why there’s a need to fit those companies to be able to have a place. To add to that, we have recently launched a package of reforms that we call a package for economic acceleration to impact on those companies so that they can be productive and profitable, and they can contribute to the balance of payment.

Within those priorities, the first ones would be mobility, together with road safety, because whatever we do is centered around the movement of people in a safe way, the movement of goods, and, of course, talent, within the country and across the borders. That’s a main ingredient for us. We believe mobility is essential for economic transformation, it’s the blood that runs the economy. Without mobility, people cannot move from one place to the other, goods cannot reach destination. That’s where our focus is.

Historically, Mozambique has been a country that has a very important geo strategic position, and allows for access to landlocked countries, such as Zimbabwe, Eswatini, Malawi, Zambia, and as far as other countries as DRC. Being in that position, we have massive responsibility in the region to facilitate trade and movement within and between our economies. Mozambique is also blessed by a vast coastline. In a straight line it will be like 2700 kilometers of coastline. It’s all beaches and a nice place to enjoy the wonders of the world. We also have a lot of rivers.

Our view, in the past, today, and tomorrow, is how to combine those needs, those opportunities for mobility, such that we use different means, but also integrate them. We’re talking about multi modal, but also intermodal systems. We don’t operate only on one system in isolation. In that regard, the system has been developed over the years to include the usage of rail transport, air transport, shipping, river transport; all those kinds of transport that are available in the world and that can promote mobility are being used in Mozambique. Most of goods have been transported using the rail, but we are increasingly upgrading our road infrastructure. Our view when it comes to the movement of people is to bet on mass transportation. In this regard, we’ve been developing the BRT system:  the first of its kind was launched last month, and we expect to implement it in the next three years. With that, we want to combine other means of transportation, such as buses mass transit, trans, light rail; we have some initiatives and investments going through that direction.

We have a vision, and we have a strategy. Our vision is articulated very well in what we have as a transport master plan. The transport master plan 2015 to 2035 is now being revised to adjust it to the reality and changing parameters such as population growth and others. There we show the evolution of our transport system, from what it is today for the next 15 – 20 years. We believe we should evolve from what we have today, which is not centered so much on the collective endeavor, but more on moving pieces of society, the people, in a separate way: we are using more individual means to move people, and even goods. That creates congestion, massive cost for the environment and for the infrastructure, which does a lot of damage, and less productivity. Our views must massify and humanize transport, and that’s bringing mass transit, but with a good quality and good condition to make it attractive and to mobilize people to leave their cars. Therefore, they release space, increase productivity, as well as they fulfill their needs to commute and to travel from one point to another.

We need to engage and take advantage of progress. We cannot sit, watch, and applaud what progress is. Progress is what we do to improve our conditions today, so that tomorrow is better than today. We believe the future is about greening the economy. In my sector, that means for public transport, for example, green buses, investing in e-buses, reducing fossil fuel, and moving to electricity, which Mozambique has a lot through the rivers. Also, we have plenty of solar energy here to be transformed into electricity. We also have a lot of gas, which we understand is a transition mean to green economy. Our mass transit and transportation should have a different energy mix. We should move more to a green transportation with all these sources of energy.

In terms of cargo, we are trying to ensure that our air transport, rail transports and ports are well integrated. Our philosophy there is that we have the corridors, which we call development corridors. Maputo goes to South Africa and all the neighboring countries there, Beira goes to Zimbabwe, Malawi etc., Nacala goes to Malawi, Zambia, and other countries. We see those as spaces of economic opportunity. It is not only for movement of cargo, goods, and people, but also a space of economic transformation, through industrialization, services, quality job creation, creating more inclusion, creating more equal societies, better income, and development. We are using some of those corridors as free zones, where the business can come and profit from incentives, for them to produce, to ensure they repatriate the benefits, but also, they leave some good developments for our people. We use those corridors as well to develop the country, and that is embedded in this master plan, in this vision.

In a nutshell, in terms of public transport, we are guided by our vision master plan, contributing to green economy. We are about to contribute to the digital economy as well; digital transformation, which is also part of what I do here is integrated in the Ministry of Transport.

Finally, we also understand that the climate change is an issue that becomes more relevant to attend to, because, unless we build the resilience to climate change, all these gains we plan, we implement, we realize, may be washed away, and so, we are investing a lot more in resilient infrastructure and building this transport infrastructure. We’re trying to build a more inclusive resilient society but also a more responsive country, fulfilling its role of being relevant to our neighbors, our brothers and sisters, which rely on us to get their trade to international space, and to get cost effective supply chains, because ultimately the cost of transiting, of logistics, will determine how the economy, for Mozambique and for the region, can be competitive.

Railway development in Mozambique has expanded positively, from the reinforcement of new lines in the railway network in the provinces of Mozambique to the connection with neighboring countries such as South Africa, Zimbabwe and Eswatini. What is the impact of the rail network on transport in Mozambique? What are the prospects for facilitating national and international rail connections between Mozambique and other African countries?

The rail transport has four levels, one as passenger transport and the other as freight transport. Then there is national transport and international transport. We can put it in four dimensions, and we play a role in those four dimensions. In terms of freight transport, in the corridors that I mentioned, the rail has and will continue to play a major role in connecting production centers to distribution centers, countries and regions.

We have invested a lot in the Nacala corridor for example, where we have the mass massive reserves and production of coal, to domestic and international markets. We have upgraded our rail infrastructure and operations. We operate about 1000 Kilometer line in that it goes through Malawi and comes to Mozambique. We needed to innovate in a way we collaborate with countries, so that there’s seamless movement across borders. We have agreements whereby the trains can cross their country, and vice versa without delays due to being different geographies. We’ve been using it very well in the northern part for coal, but also other products like fertilizers, industry and commerce related goods that go through our ports or come into other countries through our ports. We continue to work with those countries to improve the supply chain, the value chain, to make sure that the railway is not the end per se, but it’s just an element of the total supply chain, which means that in one country through the sea and the port, rail, in warehouse to the destination. In other words, from production to the table. We are working on this strategy.

We have many bilateral and multilateral programs. Some are supported by international organizations such as the World Bank, the African Development Bank, and others that have been helping us to ensure that we can maximize the use and realize the opportunity for economic development. We have a similar thing in the center corridor, in Beira, where we connect to Zimbabwe. We have also the same in the southern part where we’re now in the process of upgrading and modernizing. In fact, in a few months we will be commissioning a rail infrastructure.

But we also want to green the infrastructure. Mozambique still has diesel trains. We are trying to experiment using electrical trains to reduce the amount of pollution. But one important step in the innovation report was to allow that we can run a train from Mozambique, for example, straight to Swaziland without stopping at the border and vice-versa, and from Mozambique to South Africa and vice-versa without stopping at the border. We call them borderless trains and we just introduced them last year. We’re extending this initiative to Zimbabwe, to Malawi and other countries. We have seen volumes grow.

We need to continue to invest in rolling stock and infrastructure, and there we are looking for opportunities to partner with interested investors to make our rail system comprehensive enough. At the moment, in Mozambique the rail goes from east to west to serve the country, but we believe that we also need to interrelate the country from north to south with the rail system, and we are now doing that.

We think the mass transport should also include the train transport, the use of trains and rail transport, and we have extended the usage of trains to more destinations, we have increased the frequency and we will continue to do so. We have seen massive shift in the usage of train: some years ago, perhaps low-income people were more prone to use the trains, we see the shift to middle income people using the trains. They would leave their home, drop the transport they’re using, take the train to the workplace or activity place, and then come back. They do intermodal connections. We are looking at the trains becoming more reliable and more predictable in terms of taking you at the right time and the right destination, with comfort. We are working with some countries like India, but also acquiring rolling stock from the United States, and we’re looking for more opportunities to increase the number, both for public and private and also for domestic and international operations.

Mozambique’s ports have experienced positive growth and consequently it has proven itself as a powerhouse in southern Africa. As an example, we have the port of Maputo, which broke the record for the volume of cargo transported in 2022, which experienced a growth of 20% compared to 2021, reaching 26.7 million tons transported. What is the impact of Mozambique’s ports and shipping on the economic and social development of the country? What alliances does the government already enjoy with multinational companies in port management and in what areas would you like to see foreign investment for the whole logistics industry issue?

Indeed, as you’ve said, we have seen massive growth in port activities. That is a result of two or three things. One, the vision that our ports must be elements in the global supply chain and the regional supply chain. That’s understanding what’s very important. We position our ports in that space of serving regional global supply chain, so that it facilitates the trade within that aspect. The second thing is that we understood that, at the end, the competition is determining how productive you can be, how well you can manage your business. We introduce a competitive practice by the managerial practice, competent people, most of them nationals, who understand the business, who understand how to serve the clients, who understand that the client is ultimately the single most important element to make the trade through the ports. Obviously, not least important, that our ports have to play a strategic role, not only for Mozambique, but for the SADC region in which Mozambique is a member through its contribution to the development of the region.

To achieve that, of course, we needed to modernize our ports. We understood that working with the private sector, in partnership with the private sector, will be a way to go. We opened concessions for the ports, like the Port of Maputo, to private operators, in partnership with the public entity, in this case, CFM, which is the National Railway Company of Mozambique. So, working in coordination with the best in the market. In this case, at the Port of Maputo, we have P&O operating the container terminal. Dubai Ports is a big player, and allows us to get skills, time, market, and technology; that is the best in the marketplace. Our ports operate with the same standards as global leading ports. We are competing on the same key performance indicators. We have the same managerial discipline and marketing discipline.

More important too is that we understood that, at the end of the day for port business, what matters is the end-to-end movement of goods. It’s not just that the port is efficient. If you don’t have the right connections, if you do not have the shipping lines, it doesn’t matter that you are efficient and you can load quickly, but you’re not connected. Connectivity to market is very important. But in these days, you can only achieve connectivity with the effectiveness that you need if you are digitalized. Our Maputo Port is fully digitalized, and it is well connected with from where the cargo is born to where the cargo dies. That make us look for further opportunities to invest in infrastructure, technology, and processes. The ports, because of duties performance and market discipline has recently attracted a lot of shippers that are using our ports, and the volumes have grown exponentially in short term. We are adopting different approaches, whereby we partner with the shippers to see if we can join to develop the infrastructure in short term, because otherwise the infrastructure can reach its limit and you can lose the demand. Once you lose it, it’s very difficult to cover. We’re inviting the shippers to find joint solutions on how we can ship this massive growth of trade.

There’s one element which is the vision and the master plan that the ports have. We anticipate developments. We’re not waiting to see what happens, then we go and develop an appropriate infrastructure. We already start thinking what lies ahead and we start investment before actually that a tipping point arrives. We’ve been investing. Recently we’ve been discussing investment in container handling, equipment berths to increase the berths of the ports and also access to the port. So, investing in access and equipment, investing in infrastructure at the port and also expanding facilities within the port; that would be something that we would welcome investment from major players to come here, but also the shipping line.

More important for anyone to come, we have this program of reforms, which we introduced recently to accelerate reforms. It may be an additional factor for why the trade also is growing very fast because we have relaxed a lot of stiff rules that we had or charges that we had at the port. I’ll give you an example of what happened to transshipment. Until recently we didn’t have transshipment because we do require that a shipper place a guarantee on the transit cargo. We have removed that; we no longer have that. What happened is that, once we removed that, we saw massive growth in the cargo, the Ro-Ro container or bulk handling cargo

Japan has supported Mozambique in several essential areas for national economic and social development, recently concluding several agreements to strengthen the friendship between the two countries. Can you specify the benefits derived from the recent agreements signed between the two countries and in which areas of multimodal transport in Mozambique would you like to see more Japanese investment?

Japan has been a trusted partner over many years. It is that partner that you want more from in terms of cooperation.  We want to keep the relationship growing with them because they are credible, they keep their word and they believe on what they commit. One of the major areas where Japan is investing is in the Nacala corridor. Right now, we’ve seen around 300 million dollars investment to upgrade and modernize the Port of Nacala. We believe that, before the end of this semester, we should have commissioned a new rehabilitated port with access roads, container handling facitilities, general cargo containers and other facilities within the port with modern equipment operating similar to elsewhere in the world. That will increase massively the productivity of the port. That is a good example of the investment that Japan does in ports.

But there are some other investments in public transport. The master plan is also an investment from Japan, in a sense that we have this vision and they have identified the projects to make that master plan work. Now, once we have identified those projects, that’s where the investment opportunities are: rail transport, both for passengers and cargo. Japan has a massive opportunity here to share the experience. Japan can also help us to invest in public transport like e-buses, and more than that. We have our ambition, and this year we started running e-buses. One of the issues with e-buses is that it requires batteries to power these buses. Mozambique have some of the finest graphite mines if not the biggest in the world. Unfortunately, at the moment, this material is exported as raw and there is no transformation in Mozambique. As we speak, Tesla produces batteries from graphite of Mozambique.

I would appeal to Japanese business people telling them that here is an opportunity to set factories that can produce batteries that can be sold to the Mozambican market, but also to Japanese and other markets. That’s a massive opportunity as we embark on green transport, electrical transport,. It is not only in Mozambique. It is all over the world. To run these e-transports around the world, batteries are important and we have here what is needed to produce them. We have skills, we have raw material and we have an institutional framework which facilitates the repatriation of capital. Mozambique is known as a country that respects the right of investors to expatriate their capital without restriction.

I see real opportunity at ports and green e-transport where Japan can come and take advantage of that. The issue of infrastructure for intermodal transport and the issue of resilient transport are very important forMozambique. With their experience, Japan can create resilience. My final word would be on road safety. We are look on that because we need to change it, improving safety in our roads. Japan can invest in all that and make an impact. They have a very good system of training drivers, of licensing people, of inspecting vehicles. That is an opportunity that is transformative and will make a difference.