23 Mar Interview with Pedro Carvalho, CEO of Absa Bank, Moçambique
How do you define today the strategic role of Absa Moçambique within the country’s financial system and what immediate priorities are guiding your leadership agenda?
Absa Bank Moçambique is part of the Absa Group, a pan-African banking group with operations in 15 countries across the continent. Mozambique is one of our long-standing markets, where we have consistently developed our activities and strengthened our presence. Absa Bank Moçambique positions itself as a strategic partner in the country’s development. We work with the private sector, the public sector and the state, with the objective of being a reference institution for foreign investors looking to invest in and develop their activities in Mozambique.
We are primarily focused on corporate banking. While we offer services across all segments, from retail to corporate, our DNA is clearly oriented toward serving investors and supporting large-scale projects, whether private or public. As a bank, we are naturally focused on supporting our clients through prudent risk management, while offering the right financial and transactional solutions, providing the confidence and security needed to invest and operate in Mozambique.
The Mozambican banking sector remains well capitalized, with solvency ratios across the system comfortably above the regulatory minimum of 12%, supporting stability despite external shocks. What underpins the resilience of the Mozambican banking sector and how should international investors assess the risk and stability of the market overall?
Mozambique benefits from a robust banking regulatory framework that continues to evolve, aligning with international best practices and addressing the needs of a growing economy. The country is overseen by a prudent and proactive central bank — the Bank of Mozambique — which is highly focused on ensuring the strength and stability of all banks operating locally.
Liquidity and capital levels across the Mozambican financial system remain strong. Banks operating in the country are well-capitalized and, even during periods of external shocks, such as the COVID-19 pandemic or climate-related events, the sector has consistently demonstrated its resilience. This stability enables banks to continue supporting clients and contributing to Mozambique’s ongoing development.
The key sectors for Mozambique’s development — and those where we are best positioned to provide support — are natural resources, energy, infrastructure and logistics and agriculture and agribusiness.Mozambique is extremely rich in natural resources, making this a key sector. Energy is also fundamental, as the country has significant renewable energy potential, particularly in hydropower and solar. Infrastructure and logistics are equally important. Mozambique’s geographic position makes it a natural logistics platform for inland countries in the region without direct access to the sea.
Finally, agriculture and agribusiness remain highly relevant. Agriculture continues to account for the largest share of the country’s GDP and is expected to remain so in the coming years. As a result, the bank is structured to support investors primarily in these four sectors, which we consider critical to Mozambique’s development and where the country offers the greatest opportunities.
Mozambique has three natural transport corridors, referring to integrated infrastructure combining railways, roads and ports, along with complementary logistics services such as warehousing and cargo handling. In the north, there is the Nacala Corridor, which serves Zambia, Malawi and the Democratic Republic of Congo. In the central region, there is the Beira Corridor, mainly serving Zimbabwe and supporting a significant portion of import and export activity for both central Mozambique and Zimbabwe. In the south, we have the Maputo Corridor, which serves southern Mozambique as well as South Africa. For a significant part of South Africa, the closest access to the sea is through Mozambique, particularly via the Maputo Corridor.
As part of a pan-African banking group, Absa Bank Moçambique supports cross-border trade and regional value chains through trade finance, treasury and correspondent banking solutions. How does Absa support companies involved in regional and international trade and what role does Mozambique play in the financial and commercial networks of Southern Africa?
Absa Bank Moçambique is a strong supporter of the African Continental Free Trade Area, which promotes the exchange of goods and services across the continent. As a pan-African bank, we are well positioned to support these flows. We offer a range of products across trade finance, financing and payments that facilitate this activity.
At the same time, most trade still occurs between African countries and external partners. To support these flows, we maintain a global network of offices, including in China, Europe and the United States and we will soon expand into the Middle East. We also rely on an extensive correspondent banking network, enabling us to support exporters and importers by moving goods and services into and out of the continent. In short, we have the products, the network and the relationships needed to support these activities.
Absa Bank Moçambique has been recognized for its digital innovation, with investments in technology and AI-based solutions aimed at improving customer experience and efficiency. How is digitalization transforming banking operations and customer relationships in Mozambique?
We view digital platforms as a key enabler to enhance our interactions with clients, making them faster, more efficient and more cost-effective, particularly in areas such as transactional banking, payments, collections and other operational services. It is also important to note that Mozambique’s banking infrastructure has evolved significantly in this regard. Today, interbank payments are processed more efficiently and transactions are faster and more convenient. As a result, clients have access to advanced technological platforms to interact with Absa, whether through mobile, tablet, computer, or telephone banking channels.
We offer a full suite of remote banking channels, however, we strongly believe that relationship banking and person-to-person interaction continue to play a critical role. While we encourage clients to conduct most of their transactional activities through digital channels, we maintain physical facilities and dedicated relationship teams to engage with clients in person, understand their projects, aspirations and challenges and work collaboratively to find tailored solutions.
In summary, we firmly believe in digital banking for transactional efficiency, while recognizing the enduring value of personal relationships for advisory, analysis and solution development. In our view, nothing replaces face-to-face interaction.
How important is the reduction of the digital divide to ensure that people in all regions have access to these services?
Technology adoption in Africa, and in Mozambique in particular, has been extremely rapid. Unlike developed markets, which evolved gradually, Mozambique has leapfrogged several stages. For example, while fixed-line infrastructure was limited, mobile connectivity is now widespread, covering almost the entire country. Combined with decreasing technology costs, this has enabled broad access to banking services. Today, any Absa Bank Moçambique client, even in remote areas, can access the bank through their mobile phone without needing to visit a branch.
Japan’s involvement in Mozambique is expanding in the energy, infrastructure and trade sectors, creating growing demand for cross-border banking, financing and risk management solutions. Where do you see the most concrete opportunities for collaboration between Japanese investors or financial institutions and the Mozambican banking sector?
The relationship between Japan and Mozambique dates to the country’s independence, when diplomatic relations were first established. The early years were challenging from an economic development perspective, as Mozambique experienced a prolonged civil war. However, following the end of the conflict, Japan emerged as a key partner in supporting the country’s development and strengthening economic ties.
Broadly, Japan’s engagement with Mozambique can be viewed across two main dimensions: the first is development cooperation, largely implemented through the Japan International Cooperation Agency (JICA). JICA has a strong presence in Mozambique and works closely with the government on a wide range of development initiatives.
The second dimension relates to corporate and private-sector investment. Since the 1990s, several major Japanese companies have established a presence in Mozambique. Notable examples include Mitsubishi and Mitsui, both of which have invested in the country for decades and are expected to continue doing so. These companies have developed a deep understanding of the local market, including its risks and opportunities, and have built the confidence to sustain and grow their operations.
Another key institution is the Japan Bank for International Cooperation (JBIC), which plays an important role in supporting Japanese investment abroad. JBIC has been active in Mozambique and has also collaborated with Absa, providing financial and strategic support to Japanese companies operating in the country.
There are, therefore, strong and well-established ties between the two countries. Absa has a deep understanding of this relationship and has been actively working with these and other clients. Our familiarity with both cultures enables us to add value by building bridges between investors and the opportunities available in Mozambique. For this reason, we place significant emphasis on what we refer to as the Japan–Mozambique corridor which, in practice, extends beyond Mozambique to a broader Japan–Africa corridor. Absa works with Japanese companies across multiple markets across the continent.
Last year, when President Daniel Chapo visited Japan during the Tokyo International Conference on African Development, Absa was part of the delegation. This provided an opportunity to engage with both existing clients and prospective investors and to present the investment landscape, including the associated risksand opportunities and the most effective approaches for Japanese companies operating in Mozambique.
How can Absa Moçambique support Japanese companies looking to invest, trade, or operate in the Mozambican market?
As a universal bank, Absa provides the full spectrum of banking services that Japanese investors, or investors from any other country, may require to operate in Mozambique. Beyond traditional banking, Absa offers an additional advantage: the ability to collaborate with development agencies and multilateral development banks to identify and structure financing solutions that facilitate the execution of large-scale projects. We work closely with the JBIC, as well as institutions such as the World Bank, the International Finance Corporation and the African Development Bank.
Many of these projects, due to their scale, cannot be financed by a single institution. Instead, they are typically funded through syndicates that combine commercial banks and development banks like those mentioned. Absa has extensive experience in both coordinating and participating in these syndicates, supporting complex, large-scale investments in Mozambique. In this context, we offer a combination of traditional banking services and the specialized expertise of our investment banking team. This enables us to structure tailored solutions that meet the specific needs of each investor, whether through the bank’s own financial products or through collaborative arrangements with multiple stakeholders.
Do you have a final message to our readers of Japan Times about choosing Mozambique as their next business and investment destination?
Mozambique is an emerging market and, like any emerging market, it presents certain risks and challenges. However, these are largely outweighed by the opportunities the country offers. Mozambique is exceptionally rich in natural resources and possesses enormous energy production potential. This capacity should be viewed not only in terms of meeting domestic demand but also regionally. Mozambique has the potential to become a regional energy hub supporting neighboring countries, a role it already plays to some extent, with significant room for expansion.
The country also has extraordinary agricultural potential, much of which remains untapped. Food security continues to be a key focus in Japan, where solutions are actively sought. Mozambique could contribute to addressing food security challenges both in Japan and across the international landscape. Furthermore, Mozambique enjoys a highly strategic location as a logistics platform. Its extensive coastline, excellent ports and natural corridors connecting to inland countries make it a key regional gateway.
For all these reasons, Mozambique offers significant opportunities. The country has been growing steadily and today, more than ever, it possesses governance structures and a financial system framework capable of providing confidence to Japanese investors seeking to capitalize on its potential.