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South African investment opening previously closed markets in Mozambique

Due to their geographical proximity and the fact that they share a common border of 493km, the economic and human relations between Mozambique and South Africa date back a long way.

Trade relations between the two countries, in the economic configurations in which they exist today, were established at the end of the 19th century and followed inconstant periods of rapprochement and distance.

However, in 1994 two unprecedented events occurred that had a profound impact on societies in both countries: the multi-racial elections in South Africa and the first multi-party elections in Mozambique.

Since then, the two countries have continued to maintain close commercial relationships. South Africa has invested significantly in the Mozambican economy, thanks largely to the fact that Mozambique is an attractive destination for foreign direct investments (FDI). Indeed, in 2011 FDI became the country’s main source of income.

Mozambique is attractive to investors because it is rich in natural resources and has good road, rail and port infrastructures. However, unlike traditional investors, their close proximity means that South African investors can invest in almost all sectors of the Mozambican economy, ranging from banking, brewing, soft drinks, sugar and tourist facilities to large infrastructure projects.

In terms of trademarks, South African applicants own approximately 5,500 national trademarks in Mozambique. They rank second after applicants from the United States, which own approximately 5,850 national trademarks.

Most South African trademarks (11.4%) are applied for or registered in Class 35 and are mostly related to retail and wholesale services. This class is followed by Classes 30 and 29 relating to food products (7.1% and 6%, respectively), Class 36 for insurance and financial services (5.8%) and Class 9 for electrical and scientific devices (5.5%).

These trademarks are mostly associated with consumer goods and their distribution, illustrating the fact that there are many South African goods in the Mozambican market. This notable presence has been highly beneficial to Mozambique in the sense that it has increased the supply of goods into the country and helped to stablise prices.

Source: Further Africa

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