Mozambique - Country Commercial Guide
Digital Economy
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Overview

The Government of Mozambique aims to implement its digital transformation strategy by deploying projects focused on connectivity, e-governance and private sector inclusion.  In 2021, the World Bank approved a $150 million grant to support  investment and technical assistance through Mozambique’s Digital Governance and Economy Project (EDGE).  Digital Economy development is anchored by the National Strategy for Broadband as well as the urgency to develop  cybersecurity, cloud computing, and e-commerce regulations. In October 2023, the Council of Ministers  the approved the  Regulatory Framework for Registry and Licensing of Electronic Services Providers and Digital Platforms Operators.  This framework will enable companies to adopt registry and licensing practices in alignment with global guidelines.  Additionally, the National Cybersecurity Strategy aims to implement 25 projects by 2025 and established a multi-sectoral council with a mandate to coordinate a governance framework. ICT is consistently integrated into national development plans, including concrete benchmarks and targets.

Data Reportal highlights that internet penetration stood at 20.7% at the start of 2023, while almost half of the total population registered mobile phone accounts.  Many people have more than one active SIM card due to cross-network call charges being higher than same network prices as well as variable network quality and coverage, especially in remote areas. According to a new legislation regarding the Registration of Subscribers to Telecommunications Services passed in 2023, subscribers must have a Unique Telecommunications Number (NUTEL) generated by the National Communications Institute (INCM)  for the unique identification of any subscriber despite of the operator.

The market for mobile money is experiencing major growth driven by apps implemented by the licensed mobile phone operators in Mozambique: Tmcel-Moçambique Telecom,SA (Tmcel), Vodacom Moçambique, SARL (Vodacom), and Vietnam-headquartered Viettel (Movitel).  All three operators provide digital services including transfers, payments, and withdrawals via a cellphone, and fall under the supervision of the Central Bank.  No bank account is required to make transactions through these apps.  For example, without the need for a smartphone, a user can engage human agents who are stationed in key locations throughout the country to perform financial transactions.  According to Statista, 65% of the adult population had a mobile money account in the first quarter of 2021.  

In conjunction with U.S.-headquartered firm, Euronet, Sociedade Interbancária de Moçambique (SIMO) operates the national card switch, a platform that creates a single payment clearance network for all commercial banks and electronic money institutions.  The Bank of Mozambique highlights that SIMO is in alignment with international standards for payment systems which require contactless technology for all bank cards and POS terminals. Additionally, the larger banks offer mobile wallets linked to bank accounts.

Key Government Bodies:

Regulatory body to support the development and implementation of regulatory frameworks for national information and communication technology, including cybersecurity and cybercrime.

Regulates and supervises the communications sector and spectrum management of radio frequencies. It also grants licenses to communication services and monitors compliance to legislation.

Institution with primary responsibility to deliver government information and services to the public and other agencies in addition to bringing about improvements in government digital operations.

Mozambique’s supervisory public institution of financial institutions including mobile payment platforms.

Market Challenges

Regulatory Environment

Currently, there is no specific legislation on cybercrime, data protection and privacy.  However, there are other sources of law that govern the dynamics of digital economy including the Civil Code, Electronic Transactions Law, and Telecommunications Law.  

Mozambique’s digital migration also brings new threats to end-users impacting both government and private sector. Financial services and critical infrastructure experience the most attacks creating vulnerability in areas that impact economic output. Government bodies also face looming challenges and risks from online storage of citizen’s information who utilize public services. As a result, the Government of Mozambique has identified cybersecurity as a priority segment for the country’s digital transformation process. Currently, the National Institute for Information and Communications Technology (INTIC) drives the consultation on the proposed Law on Cyber Security and Cyber Crimes.  INAGE and the Mozambique research and education networks (MoRENET) established computer security incident response teams (CSIRTs) covering academic and public institutions. Nevertheless, these centers require much technical assistance and financial resources to deliver appropriate responses.

The Bank of Mozambique is the leading regulator of e-commerce payments. Currently, it is working with commercial banks to establish a national payment platform that will enable local companies to sell products and services online. Although the process started in 2018, Mozambique is yet to approve its e-commerce regulatory framework. This delay is further hindering the advancement of the e-commerce industry.

Digital Trade Barrier

There is a wide gap in internet connectivity between urban and rural areas. Mozambique’s Ministry of Transport and Communications states that more than half of the population cannot afford internet services or electronic devices. Besides price, access is an issue in rural areas because there is no mobile or broadband signal. Additionally, data traffic is expensive to carry outside of Maputo, which adds to the cost difference of data services in the north and south of the country. Inadequate power supply increases the cost and delays the deployment of backbone infrastructure.

Several public institutions have entered into equipment and services agreements with Chinese vendors. Additionally, major buyers from the private sector also tend to prefer Chinese suppliers in comparison to U.S. suppliers due to low cost and strong   customer service support. The Chinese government funded a Digital Forensic Laboratory operated by the National Criminal Investigation Service (SERNIC) to improve the process of solving criminal cases. Huawei has secured major public contracts since its entry on the market in 2015. For example, it announced a major agreement with Tmcel (state-owned enterprise) for supply of equipment amounting to $23 million. It also installed an integrated communications system (FRMCS) for train dispatching for Mozambique Ports and Railways enterprise (CFM). According to the International Union for Railways (UIC), the FRMCS system will work in parallel with the GSM-R system by 2025 to be ready for 5G transition in 2030.

Government expenditure on ICT still fails to meet national demands  . As a result, solutions or vendors that lack financing will not be approved by public institutions. According to the World Bank approximately 50% of the population does not have an official proof of identity.  This creates barriers to access critical public services and financial inclusion for this sector of the population. Digital startups struggle to attract funding and traditional businesses are only slowly adopting digital technologies and platforms to boost productivity and sales. Limited investment is channeled towards developing digital infrastructure, data frameworks, ecosystem integration, technical skills and entrepreneurship.

Less than 35% of Mozambique’s adult population owns a bank account and many do not have access to credit or debit cards.  Therefore, only a small market niche can shop online. Furthermore, SMEs are discouraged from establishing virtual retail systems due to inadequate road infrastructure and poor postal services which impact the delivery of products.

Digital Trade Opportunities

There is major demand for improving Mozambique’s digital ecosystem. Development partners such as the World Bank play a major role in financing transformative projects by offering financing solutions and technical assistance. Broadband connectivity continues to improve fueled by key investments such as the Land2Africa Consortium (backed up by Meta) which installed two major submarine cable systems to improve connectivity in southern and northern Mozambique. Similarly, once Starlink launched its services, more rural areas have gained internet coverage and market prices dropped. Telecoms are also evaluating Open RAN technology to expand connectivity in underserved areas.

Cyber Security

The growth in digital economy also introduces new challenges and risks including cyber-attacks and fraud, threats to privacy, and disruption to markets. National Cybersecurity Strategy aims to implement 25 projects by 2025 and established a multi-sectoral council with a mandate to coordinate a governance framework. The government has started to include minimum cybersecurity requirements as part of all public procurement contracts. Mozambique’s digital transition is driven by the private sector and calls for outsourced solutions such as encryption for network access, intrusion prevention systems (IPS), advanced persistent threat (APT), email phishing security, and cybersecurity training.

There is a growing demand to maintain and protect critical infrastructure and prevent productivity disruptions.  The National CIRSTs aims to establish sectoral CIRSTs, develop a national network and create a research center for internet traffic (CATI).

Cloud Computing

Mozambique does not have a data localization policy which enables international companies to offer cloud services. Over the past years, the country registered an increasing number of data centers managed by private companies.  The Government of Mozambique operates Maluana Park as part of the government’s e-governance strategy. From a private sector perspective, U.S. investment firm, Roha, has launched a world-class tier 3 data center in partnership with regional high-tech group Raxio, which is Mozambique’s first carrier-neutral, tier 3 center.

E-Commerce

The e-commerce market is still at its infancy. Domestic online transactions remain low but are expected to grow with improvements to IT and general infrastructure as well as growth of the urban middle class. Despite bureaucratic hurdles, several stores have introduced e-commerce services with home delivery options. Some retailers combine social media platforms including Facebook, Instagram and WhatsApp with mobile money services to conduct online sales. For example, Yango, a tech services platform that provides multiple services such as ride hailing, delivery and e-grocery, also offers an alternative channel for the movement of goods in Maputo, the capital of Mozambique.

FINTECHs/ Payment Platforms

Mozambique’s financial sector is undergoing significant transformations driven by the advance of digital services. FINTECHs continue to drive innovation and modernization, in banking and non-banking realms. The accelerated growth of FINTECHs is observed in several key sectors including e-money, insurance, and capital markets, while contributing to the evolution of payment instruments. With the growth in this sector, the  Mozambique FinTech Association has arisen aiming to increase financial inclusion by developing the digital financial ecosystem between stakeholders and promote technology and investment opportunities with international partners.  FINTECHs also act as aggregators for mobile wallets and bank accounts, facilitate e-commerce transactions and provide money transfers including international remittances.

In 2018, U.S.-based EURONET signed an agreement with Bank of Mozambique to provide a modernized national payment clearance network to Mozambique. Using Ren Technology, the solution is delivered via Sociedade Interbancária de Moçambique (SIMO), a joint-stock company partially owned by the Bank of Mozambique. EURONET’s solution supports transaction processing services, connections to major card associations, ATM and POS device links, card issuance, bill payments and digital wallets.  

Digital Economy Related Trade Events

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