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Mozambique - United Arab Emirates Trade Relations

United Arab Emirates-Mozambique Trade Relations: Agreements, Trade Figures, and Future Opportunities

The United Arab Emirates (UAE) and Mozambique share a dynamic and evolving trade relationship, rooted in historical connections and strengthened by mutual economic interests. The UAE, a global trade hub with a $415 billion GDP (2021-2023), leverages its strategic position and diversified economy to engage with Mozambique, a resource-rich nation with a $14.4 billion GDP and a 2,700-km Indian Ocean coastline. Their trade focuses on Mozambique's precious metals, coal, and agricultural exports and the UAE's petroleum, vehicles, and consumer goods. This blog analyzes their trade relations, existing agreements, trade figures, key traded goods, and future opportunities, highlighting the potential for deeper economic ties amidst challenges like infrastructure gaps and regional instability.

Trade Relations Overview

The UAE and Mozambique's trade relationship is facilitated by the UAE's role as a logistics and investment hub in the Middle East and Mozambique's position as a trade gateway for Southern Africa, with ports at Maputo, Beira, and Nacala handling 40 million tons of cargo annually. The UAE ranks as Mozambique's fifth-largest export destination and second-largest import source, driven by the UAE's demand for raw materials and Mozambique's need for refined products and capital goods.

Trade ties have been bolstered by high-level engagements, such as Mozambican President Filipe Nyusi's visit to Abu Dhabi in October 2022, where he met UAE President Mohammed bin Zayed Al Nahyan to discuss economic cooperation. The UAE's DP World, a co-manager of Maputo Port, underscores its investment commitment, while Air Mozambique (LAM)'s direct flights to Dubai since 2000 enhance business and tourism links. Recent initiatives, like the Dubai Chamber of Commerce's 2025 trade mission to Maputo, which facilitated 356 B2B meetings, signal growing commercial engagement. However, Mozambique's 2024 post-election unrest disrupted Maputo Port, affecting UAE-bound exports, highlighting the need for stability.

Existing Agreements

No formal bilateral free trade agreement (FTA) exists between the UAE and Mozambique, but their trade is governed by multilateral and regional frameworks, supplemented by bilateral memoranda and development cooperation:

1. World Trade Organization (WTO)

  • Details: Both nations are WTO members (UAE since April 1996, Mozambique since August 1995), adhering to rules on tariffs, intellectual property, and trade practices. Mozambique benefits from Least Developed Country (LDC) preferences, gaining reduced tariffs on goods like coal (0% tariff) to the UAE.

  • Impact: Provides a predictable trade framework, ensuring non-discriminatory access. The UAE's WTO commitments under the Information Technology Agreement (ITA) eliminate tariffs on IT products, benefiting Mozambican imports of UAE electronics.

  • Limitations: Lacks the depth of an FTA, with non-tariff barriers (e.g., UAE's import standards) limiting Mozambican agricultural exports.

2. African Continental Free Trade Area (AfCFTA)

  • Details: Mozambique ratified AfCFTA in January 2023, creating a $3.4 trillion market across 54 African countries. The UAE, a non-member, engages AfCFTA through trade promotion, such as the UAE-Africa Business Forum (2024, Dubai), attended by Mozambican officials.

  • Impact: AfCFTA's customs harmonization streamlines Mozambican exports through Nacala and Maputo, reducing clearance times by 20%, benefiting UAE importers. The UAE's $50 million pledge (2023) supports AfCFTA's trade infrastructure in Mozambique.

  • Recent Developments: Mozambique's 2025 AfCFTA shipment to Kenya via Nacala Port demonstrates improved logistics, indirectly aiding UAE trade.

3. Greater Arab Free Trade Area (GAFTA)

  • Details: The UAE, as part of the Gulf Cooperation Council (GCC), is a GAFTA member, providing free trade access to 17 Arab countries. Mozambique, not a GAFTA member, trades with the UAE under WTO rules but benefits from GCC's open market policies.

  • Impact: Encourages UAE investments in Mozambique, such as ADNOC's 10% stake in the Rovuma LNG basin (2023), by ensuring stable regional trade networks.

  • Limitations: Mozambique's non-membership limits direct tariff benefits, relying on bilateral engagements.

4. Bilateral Agreements and Memoranda

  • Security and Counterterrorism MoU (2022): Signed during Nyusi's UAE visit, it fosters cooperation against terrorism, supporting stability in Cabo Delgado to protect trade routes.

  • Defence Cooperation MoU (2022): Enhances military collaboration, securing Mozambique's ports and LNG projects critical for UAE investments.

  • Economic Cooperation: While no formal trade agreement exists, discussions during Nyusi's 2022 visit emphasized trade, investment, and climate cooperation, with Mozambique joining the UAE-led Agriculture Innovation Mission for Climate (AIM for Climate).

  • Visa Waiver Talks: Ongoing negotiations aim to exempt normal passport holders from entry visas, building on existing waivers for diplomatic and service passports, to boost trade and tourism.

  • Impact: These agreements stabilize Mozambique's investment climate, encouraging UAE FDI in energy and logistics, and enhance connectivity via LAM's Maputo-Dubai route.

5. Development Cooperation

  • UAE Aid: The UAE provides development aid through the Arab Fund for Economic and Social Development (AFESD), supporting Mozambique's infrastructure, such as rural electrification ($10 million, 2023).

  • DP World Partnership: The UAE's DP World co-manages Maputo Port through the Maputo Port Development Company (MPDC), investing $165 million in 2025 to expand capacity to 530,000 TEUs.

  • Impact: Strengthens Mozambique's trade infrastructure, facilitating UAE imports and exports, and supports job creation (5,000 jobs since 2010).

Trade Figures

Bilateral Trade Volume

  • Total Trade (2022): $1.082 billion, with Mozambique exporting more to the UAE than importing.

  • Mozambique Exports to UAE: $578 million (7% of Mozambique's $8.27 billion total exports in 2022, fifth-largest market).

  • UAE Exports to Mozambique: $504 million (5% of Mozambique's $10 billion total imports in 2022, second-largest source).

  • Trade Balance: Mozambique runs a slight trade surplus ($74 million), driven by high-value precious metals exports.

  • Trends: Mozambique's exports to the UAE grew at an annualized rate of 24% from 2017 ($197 million) to 2022 ($578 million), while UAE exports to Mozambique slightly declined by 0.24% from $510 million to $504 million.

Mozambique's Exports to the UAE

Mozambique's exports are resource-heavy, reflecting the UAE's demand for raw materials and luxury goods:

  • Gold (70.8%): $409 million, mined in Manica and Sofala, used in UAE's jewelry and investment markets.

  • Coal Briquettes (11%): $63.7 million, from Tete's Moatize basin, supporting UAE's industrial energy needs.

  • Precious Stones (6.1%): $35.1 million, including rubies from Montepuez, Nampula, for UAE's luxury trade.

  • Vegetable Products (2.5%): $14.3 million, including pigeon peas and sesame seeds, though limited by UAE's import standards.

UAE's Exports to Mozambique

UAE exports focus on refined products and consumer goods, supporting Mozambique's industrial and urban needs:

  • Refined Petroleum (42.3%): $213 million, fueling Mozambique's transport and energy sectors.

  • Precious Stones (21%): $106 million, re-exported for Mozambique's jewelry trade.

  • Cars (2.8%): $14.3 million, supporting logistics along the Maputo and Nacala corridors.

  • Consumer Goods (10%): Includes electronics and foodstuffs, targeting Maputo's growing middle class.

Trade Trends

  • Export Growth: Mozambique's gold and coal exports surged by $381 million from 2017 to 2022, driven by UAE's demand for commodities and Dubai's status as a gold trading hub.

  • Import Stability: UAE's petroleum exports remained steady, though overall exports dipped slightly due to reduced demand for non-essential goods post-LNG project peaks in 2022.

  • Disruptions: Mozambique's 2024 unrest disrupted Maputo Port, delaying $50 million in gold exports to the UAE, underscoring trade vulnerabilities.

Future Opportunities

The UAE and Mozambique's trade relationship offers significant growth potential, driven by energy investments, agricultural exports, and trade infrastructure. Below are key opportunities, supported by recent developments:

1. LNG and Energy Investments

  • Opportunity: Mozambique's Rovuma LNG basin, where ADNOC acquired a 10% stake in 2023, positions it as a top-10 global LNG supplier by 2030. The UAE, aiming to diversify energy imports, can increase LNG offtakes, with firms like ENH and Masdar exploring clean energy projects.

  • Potential: LNG exports could reach $500 million by 2030, creating 5,000 jobs. The UAE's expertise in clean energy (e.g., Masdar's solar projects) supports Mozambique's renewable transition.

  • Recent Development: ADNOC's 2023 Rovuma investment ($1 billion) signals long-term commitment, with talks for further stakes in 2024.

2. Agricultural Exports and Value Addition

  • Opportunity: Mozambique's agriculture (70% of workforce) can export processed goods like cashews, pigeon peas, and sugar to the UAE's $20 billion food market. The UAE's logistics hub status and AfCFTA's tariff reductions (ratified 2023) facilitate trade. The SUSTENTA initiative ($500 million) can integrate farmers into value chains.

  • Potential: Agricultural exports could grow 25% ($50 million) by 2030, with processed cashews adding $30 million. SMEs, as seen in the 2025 AfCFTA shipment, benefit from UAE's Dubai market.

  • Recent Development: The 2025 Dubai Chamber trade mission in Maputo connected 356 businesses, with UAE importers eyeing Mozambican sesame and cashews.

3. Trade Infrastructure and Logistics

  • Opportunity: The UAE's DP World can expand Maputo Port's capacity beyond 530,000 TEUs, while investments in Nacala and Beira ports enhance exports to the UAE. The UAE's expertise in free zones (e.g., Jebel Ali) can develop Mozambican trade hubs, as proposed in 2022 talks.

  • Potential: Infrastructure exports could reach $300 million by 2030, reducing logistics costs by 15%. The UAE's $200 million investment in Nacala's roads (2023) sets a precedent.

  • Recent Development: DP World's $165 million Maputo investment (2025) aligns with the Tripartite Agreement (Mozambique, Malawi, Zambia), boosting UAE trade efficiency.

4. Precious Metals and Minerals

  • Opportunity: Mozambique's gold, rubies, and titanium align with the UAE's status as a global gold and jewelry hub (Dubai Gold Souk). UAE firms like International Holding Company can invest in Mozambican mines, building on 2023 mining interests in Africa.

  • Potential: Gold and ruby exports could rise to $600 million by 2030, creating 3,000 jobs. Joint processing facilities in Maputo could add $100 million in value.

  • Recent Development: The 2025 Maputo trade mission included UAE jewelers, with contracts for $20 million in Mozambican rubies signed.

5. Tourism and Services

  • Opportunity: Mozambique's coastal resorts and wildlife parks (e.g., Gorongosa) can attract UAE tourists, complementing the UAE's $35 billion tourism industry. UAE firms like Emirates Airlines can expand flights, while financial and IT services support Mozambique's digital trade.

  • Potential: Tourism trade could grow 20% ($30 million) by 2030, with services exports adding $50 million. Visa waivers, discussed in 2022, would boost connectivity.

  • Recent Development: LAM's Maputo-Dubai route saw a 15% passenger increase in 2024, with UAE tour operators promoting Mozambican safaris.

Challenges

  • Post-Election Unrest (2024): Disruptions at Maputo Port delayed $50 million in UAE-bound exports, with risks of further instability deterring investment.

  • Infrastructure Gaps: Only 19% of Mozambique's 30,562-km roads are paved, increasing transport costs by 15%. Aging railways limit export efficiency.

  • Non-Tariff Barriers: The UAE's stringent import standards restrict Mozambican agricultural exports, with only 10% of potential met.

  • Governance Issues: Corruption (e.g., 2023 pigeon pea restrictions) and the 2016 "hidden debt" scandal ($2 billion) reduce UAE investor confidence.

  • Climate Risks: Floods disrupt 1,000 km of roads annually (1.1% of GDP), delaying shipments to the UAE.

Conclusion

UAE-Mozambique trade relations, valued at $1.082 billion in 2022, are a vital link in Southern Africa-Middle East economic networks, driven by WTO, AfCFTA, and bilateral MoUs on security and defence. Mozambique's $578 million in gold and coal exports outweighs the UAE's $504 million in petroleum and vehicles, creating a trade surplus. Opportunities in LNG, agriculture, infrastructure, minerals, and tourism could add $1.5 billion to trade by 2030, creating 15,000 jobs, supported by DP World's Maputo investments and the 2025 Dubai Chamber mission's 356 B2B meetings. Recent developments, like ADNOC's Rovuma stake and AfCFTA's trade facilitation, signal strong potential. Addressing unrest, infrastructure gaps, and governance challenges will be critical to maximizing these benefits, strengthening UAE-Mozambique ties for sustainable growth.