VII. INVESTMENT CLIMATE SUMMARY MOZAMBIQUE IS VERY RECEPTIVE TO FOREIGN INVESTMENT, AT LEAST IN THEORY, FOR IT IS CONSIDERED TO BE A VITAL COMPONENT IN MOZAMBIQUE'S ECONOMIC RECONSTRUCTION. IN PRACTICE, BUREAUCRATIC RED TAPE AND A LINGERING TENDENCY TOWARDS EXCESSIVE AND MULTILAYERED GOVERNMENT CONTROL OF THE ECONOMY OFTEN DISCOURAGE THE FOREIGN INVESTOR. NEW LAWS MORE FAVORABLE TO INVESTMENT WERE ENACTED IN MID-1993, THOUGH MANY CLAIM THAT THE NEW LAWS DO NOT PROVIDE ENOUGH INCENTIVES TO ENTICE THE FOREIGN INVESTOR, AND ONE-YEAR'S EXPERIENCE BEARS THIS OUT. ACQUISITIONS, MERGERS, TAKEOVERS, AND GREENFIELD INVESTMENTS ARE ALL PERMITTED. INVESTMENT PROPOSALS ARE CHANNELED THROUGH THE CENTER FOR THE PROMOTION OF INVESTMENT (CPI), THE GOVERNMENT ORGANIZATION ESTABLISHED TO ASSIST INVESTORS IMPLEMENT THEIR PROJECTS. CPI'S EFFECTIVENESS RECEIVES MIXED REVIEWS FROM FOREIGN INVESTORS. CPI CONDUCTS AN INITIAL ROUTINE SCREENING OF ALL FOREIGN INVESTMENT PROPOSALS. THE MINISTER OF PLANNING APPROVES PROPOSALS BELOW USD 10 MILLION AND THE COUNCIL OF MINISTERS APPROVES PROPOSALS OVER USD 10 MILLION. THE GOVERNMENT HAS 90 DAYS IN WHICH TO APPROVE OR REJECT PROPOSED INVESTMENT PROJECTS. SHOULD A DECISION NOT BE FORTHCOMING DURING THIS PERIOD, THE PROJECT IS AUTOMATICALLY APPROVED. MOZAMBIQUE HAS UNDERTAKEN A LARGE PRIVATIZATION PROGRAM AND FOREIGN INVESTORS ARE ENCOURAGED TO PARTICIPATE. THOUGH THE LOCAL BUSINESS COMMUNITY HAS LITTLE CAPITAL TO INVEST, THE GRM ENCOURAGES, BUT DOES NOT REQUIRE, THAT LOCAL PARTNERS PARTICIPATE IN THE OWNERSHIP OF THE PRIVATIZED COMPANY. THE GRM SOMETIMES RETAINS A SIGNIFICANT MINORITY SHAREHOLDING IN THE PRIVATIZED COMPANY. INVESTMENTS MADE BY FOREIGN INVESTORS IN NEW BUSINESS OR THOSE DESTROYED OR DAMAGED BY THE CIVIL WAR WILL BENEFIT FROM A 50 PERCENT REDUCTION IN CORPORATE TAXES WHILE THE INVESTORS RECOVER THEIR INVESTMENT, FOR A PERIOD NOT TO EXCEED 10 YEARS. IF THE INVESTMENT IS MADE IN THE PROVINCES OF NIASSA, TETE, OR CABO DELGADO, THE TAX IS REDUCED BY 80 PERCENT. FOLLOWING THE EXPIRY OF THESE TAX BENEFITS, INVESTMENTS IN THESE THREE PROVINCES WILL RECEIVE A 50 PERCENT REDUCTION IN CORPORATE TAXES FOR AN ADDITIONAL SIX YEARS. INVESTMENTS IN SOFALA, MANICA, ZAMBEZIA AND NAMPULA WILL RECEIVE A 40 PERCENT REDUCTION IN CORPORATE TAXES FOR AN ADDITIONAL THREE YEARS. IN THE REMAINING PROVINCES, INVESTMENT PROJECTS OUTSIDE OF PROVINCIAL CAPITALS WILL BENEFIT FROM A 25 PERCENT REDUCTION FOR AN ADDITIONAL THREE YEARS. THE MINIMUM INVESTMENT REQUIRED TO BENEFIT FROM THESE FISCAL INCENTIVES IS USD 50,000. THE NEW INVESTMENT REGULATIONS GUARANTEE FOREIGN INVESTORS THE RIGHT TO REMIT ABROAD BOTH PROFITS AND CAPITAL, THOUGH SUBJECT TO SEVERAL REQUIREMENTS. INVESTORS MAY REMIT PROFITS ABROAD AS LONG AS THEIR INVESTMENTS IN MOZAMBIQUE GENERATE FOREIGN EXCHANGE AT LEAST EQUIVALENT TO THE AMOUNT REMITTED ABROAD. IF THE INVESTMENT DID NOT GENERATE SUFFICIENT FOREIGN EXCHANGE, BUT RATHER THROUGH IMPORT SUBSTITUTION SAVED THE COUNTRY FOREIGN EXCHANGE, REMITTANCES OF PROFITS WILL BE PERMITTED "UNDER THE TERMS TO BE AGREED WITH THE RELEVANT INVESTOR." INVESTED CAPITAL MAY BE REMITTED UPON LIQUIDATION OR SALE OF THE INVESTMENT. FOREIGN EXCHANGE IN THE OFFICIAL BANKING SECTOR IS VERY HARD TO OBTAIN GIVEN MOZAMBIQUE'S LARGE TRADE DEFICIT. THE EXPERIENCE OF FOREIGN COMPANIES VARIES GREATLY DEPENDING ON WHETHER OR NOT THE COMPANY EARNS FOREIGN EXCHANGE. LOCAL CAR-RENTAL AGENCIES, FOR EXAMPLE, CHARGE IN U.S. DOLLARS, AND ARE THEREFORE PERMITTED TO REMIT PROFITS WITH GREAT EASE. ANOTHER AMERICAN COMPANY PRODUCING CONSUMER GOODS AND EARNING IN LOCAL CURRENCY OFTEN EXPERIENCES GREAT DIFFICULTY AND DELAYS WHEN REMITTING FUNDS. OPENNESS TO FOREIGN INVESTMENT MOZAMBIQUE IS VERY RECEPTIVE TO FOREIGN INVESTMENT, AT LEAST IN THEORY, FOR IT IS CONSIDERED TO BE A VITAL COMPONENT IN MOZAMBIQUE'S ECONOMIC RECONSTRUCTION. IN PRACTICE, BUREAUCRATIC RED TAPE AND A LINGERING TENDENCY TOWARDS EXCESSIVE AND MULTILAYERED GOVERNMENT CONTROL OF THE ECONOMY OFTEN DISCOURAGE THE FOREIGN INVESTOR. NEW LAWS MORE FAVORABLE TO INVESTMENT WERE ENACTED IN MID-1993, THOUGH MANY CLAIM THAT THE NEW LAWS DO NOT PROVIDE ENOUGH INCENTIVES TO ENTICE THE FOREIGN INVESTOR, AND ONE-YEAR'S EXPERIENCE BEARS THIS OUT. ACQUISITIONS, MERGERS, TAKEOVERS, AND GREENFIELD INVESTMENTS ARE ALL PERMITTED. INVESTMENT PROPOSALS ARE CHANNELED THROUGH THE CENTER FOR THE PROMOTION OF INVESTMENT (CPI), THE GOVERNMENT ORGANIZATION ESTABLISHED TO ASSIST INVESTORS IMPLEMENT THEIR PROJECTS. CPI'S EFFECTIVENESS RECEIVES MIXED REVIEWS FROM FOREIGN INVESTORS. CPI CONDUCTS AN INITIAL ROUTINE SCREENING OF ALL FOREIGN INVESTMENTS PROPOSALS. THE MINISTER OF PLANNING APPROVES PROPOSALS BELOW USD 10 MILLION AND THE COUNCIL OF MINISTERS APPROVES PROPOSALS OVER USD 10 MILLION. THE GOVERNMENT HAS 90 DAYS IN WHICH TO APPROVE OR REJECT PROPOSED INVESTMENT PROJECTS. SHOULD A DECISION NOT BE FORTHCOMING DURING THIS PERIOD, THE PROJECT IS AUTOMATICALLY APPROVED. MOZAMBIQUE HAS UNDERTAKEN A LARGE PRIVATIZATION PROGRAM AND FOREIGN INVESTORS ARE WELCOME TO PARTICIPATE. THOUGH THE LOCAL BUSINESS COMMUNITY HAS LITTLE CAPITAL TO INVEST, THE GRM ENCOURAGES, BUT DOES NOT REQUIRE, THAT LOCAL PARTNERS PARTICIPATE IN THE OWNERSHIP OF THE PRIVATIZED COMPANY. THE GRM SOMETIMES RETAINS A SIGNIFICANT MINORITY SHAREHOLDING IN THE PRIVATIZED COMPANY. INVESTMENTS MADE BY FOREIGN INVESTORS IN NEW BUSINESS OR THOSE DESTROYED OR DAMAGED BY THE CIVIL WAR WILL BENEFIT FROM A 50 PERCENT REDUCTION IN CORPORATE TAXES WHILE THE INVESTORS RECOVER THEIR INVESTMENT, FOR A PERIOD NOT TO EXCEED 10 YEARS. IF THE INVESTMENT IS MADE IN THE PROVINCES OF NIASSA, TETE, OR CABO DELGADO, THE TAX IS REDUCED BY 80 PERCENT. FOLLOWING THE EXPIRY OF THESE TAX BENEFITS, INVESTMENTS IN THESE THREE PROVINCES WILL RECEIVE A 50 PERCENT REDUCTION IN CORPORATE TAXES FOR AN ADDITIONAL SIX YEARS. INVESTMENTS IN SOFALA, MANICA, ZAMBEZIA AND NAMPULA WILL RECEIVE A 40 PERCENT REDUCTION IN CORPORATE TAXES FOR AN ADDITIONAL THREE YEARS. IN THE REMAINING PROVINCES, INVESTMENT PROJECTS OUTSIDE OF PROVINCIAL CAPITALS WILL BENEFIT FROM A 25 PERCENT REDUCTION FOR AN ADDITIONAL THREE YEARS. THE MINIMUM INVESTMENT REQUIRED TO BENEFIT FROM THESE FISCAL INCENTIVES IS USD 50 000. CONVERSION AND TRANSFER POLICIES THE NEW INVESTMENT REGULATIONS GUARANTEE FOREIGN INVESTORS THE RIGHT TO REMIT ABROAD BOTH PROFITS AND CAPITAL, THOUGH SUBJECT TO SEVERAL REQUIREMENTS. INVESTORS MAY REMIT PROFITS ABROAD AS LONG AS THEIR INVESTMENTS IN MOZAMBIQUE GENERATE FOREIGN EXCHANGE AT LEAST EQUIVALENT TO THE AMOUNT REMITTED ABROAD. IF THE INVESTMENT DID NOT GENERATE SUFFICIENT FOREIGN EXCHANGE, BUT RATHER THROUGH IMPORT SUBSTITUTION SAVED THE COUNTRY FOREIGN EXCHANGE, REMITTANCES OF PROFITS WILL BE PERMITTED "UNDER THE TERMS TO BE AGREED WITH THE RELEVANT INVESTOR." INVESTED CAPITAL MAY BE REMITTED UPON LIQUIDATION OR SALE OF THE INVESTMENT. FOREIGN EXCHANGE IN THE OFFICIAL BANKING SECTOR IS VERY HARD TO OBTAIN GIVEN MOZAMBIQUE'S LARGE TRADE DEFICIT. THE EXPERIENCE OF FOREIGN COMPANIES VARIES GREATLY DEPENDING ON WHETHER OR NOT THE COMPANY EARNS FOREIGN EXCHANGE. LOCAL CAR-RENTAL AGENCIES, FOR EXAMPLE, CHARGE IN U.S. DOLLARS, AND ARE THEREFORE PERMITTED TO REMIT PROFITS WITH GREAT EASE. ANOTHER AMERICAN COMPANY PRODUCING CONSUMER GOODS AND EARNING IN LOCAL CURRENCY OFTEN EXPERIENCES GREAT DIFFICULTY AND DELAYS WHEN REMITTING FUNDS. THE EMBASSY UTILIZES THE OFFICIAL EXCHANGE RATE, WHICH AS OF JUNE 30 1994 IS APPROXIMATELY 6000 METICAIS TO 1 USD. THE EMBASSY DOES PURCHASE LOCAL CURRENCY. THE METICAL DEVALUED ABOUT 80 PERCENT IN THE PAST 12 MONTHS, BUT ONLY 20 PERCENT IN THE FIRST SIX MONTHS OF 1994. EXPROPRIATION AND COMPENSATION THE AMERICAN EMBASSY IN MAPUTO IS UNAWARE OF ANY RECENT CASES IN WHICH THE MOZAMBIQUE GOVERNMENT EXPROPRIATED PROPERTY. THE ONLY CASES STILL AWAITING SETTLEMENT DATE BACK TO THE POST-INDEPENDENCE PERIOD OF THE LATE-1970'S WHEN THE GOVERNMENT NATIONALIZED MANY COMPANIES AND REAL ESTATE PROPERTIES. THE GOVERNMENT RECENTLY STATED THAT THERE IS NO INTENTION OF RESTORING THESE PROPERTIES TO THEIR ORIGINAL OWNERS. WHILE THE POLITICAL SITUATION IN MOZAMBIQUE IS FLUID, THE EMBASSY BELIEVES EXPROPRIATORY ACTIONS IN THE NEAR FUTURE ARE UNLIKELY. DISPUTE SETTLEMENT THE JUDICIARY SYSTEM IN MOZAMBIQUE IS UNDERDEVELOPED AND NOT RELIABLE FOR THE SETTLEMENT OF COMMERCIAL DISPUTES. THE COMMERCIAL CODE IS AN ANTIQUATED HOLDOVER DATING BACK TO THE PORTUGUESE COLONIAL PERIOD IN THE EARLY-1900'S. MOZAMBIQUE IS A MEMBER OF MIGA (INSURER AGAINST NON-COMMERCIAL RISKS) AND OFFERS RECOURSE TO ARBITRATION FOLLOWING THE RULES OF ICSID AND OF THE PARIS-BASED INTERNATIONAL CHAMBER OF COMMERCE. PERFORMANCE REQUIREMENTS/INCENTIVES THOUGH THERE ARE NO REQUIREMENTS THAT NATIONALS OWN SHARES IN A NEW VENTURE, THE GOVERNMENT DOES ENCOURAGE FOREIGN INVESTORS TO INVITE LOCAL PARTICIPATION. THIS IS PARTICULARLY THE CASE WHEN BUYING A PARASTATAL IN MOZAMBIQUE'S PRIVATIZATION PROGRAM. THE NEW OWNER OF A PARASTATAL MUST SIGN A CONTRACT WITH THE GOVERNMENT CONCERNING THE OPERATION OF THE COMPANY, WHICH MAY COVER SUCH ISSUES AS THE RETENTION OF EXISTING EMPLOYEES. THE INVESTMENT APPROVAL DOES SPECIFY THE LOCATION OF THE INVESTMENT. THE EMBASSY IS NOT AWARE OF INSTANCES WHERE THE GRM REQUIRES DISCLOSURE OF PROPRIETARY INFORMATION. RIGHT TO PRIVATE OWNERSHIP FOREIGN ENTITIES ARE PERMITTED TO ESTABLISH AND OWN PRIVATE BUSINESSES AND TO ENGAGE IN MOST FORMS OF REMUNERATIVE ACTIVITY. FOREIGN INVESTORS ARE NOT PERMITTED TO OWN LAND, BUT LONG-TERM LEASES UP TO 50 YEARS HAVE BEEN NEGOTIATED BY SOME FOREIGN FIRMS. CERTAIN BUSINESS AREAS REMAIN RESERVED FOR INVESTMENT ONLY BY THE PUBLIC SECTOR. THESE AREAS INCLUDE: THE PRODUCTION OF ELECTRICAL ENERGY FOR PUBLIC CONSUMPTION; THE PUBLIC SUPPLY OF WATER FOR DOMESTIC AND INDUSTRIAL PURPOSES IN URBAN AREAS; THE OPERATION OF POSTAL SERVICES AND PUBLIC TELECOMMUNICATIONS; THE DEVELOPMENT AND OPERATION OF NATIONAL PARKS, BOTH MARINE AND ON LAND; AND THE PRODUCTION, DISTRIBUTION, AND TRADE OF ARMS AND MUNITIONS. PROTECTION OF PROPERTY RIGHTS LAWS DO EXIST TO PROTECT INTELLECTUAL PROPERTY RIGHTS BUT THE LEGAL SYSTEM IN MOZAMBIQUE IS NOT SUFFICIENTLY DEVELOPED TO INSURE ADEQUATE PROTECTION OF SUCH RIGHTS. PIRATE COPIES OF MOVIES ARE COMMONPLACE IN THE VIDEO STORES AND PIRATE MUSIC CASSETTES ARE SOLD ON THE STREETS. FILMS ARE SHOWN IN CINEMAS AND ON TELEVISION WITHOUT SECURING THE APPROPRIATE RIGHTS FROM MOVIE COMPANIES. THE NUMEROUS NEWSPAPER ANNOUNCEMENTS BY COMPANIES WARNING THE GENERAL PUBLIC AGAINST FRAUDULENT USAGE OF THEIR TRADEMARKS SUGGESTS THAT TRADEMARKS ARE FREQUENTLY VIOLATED. ACCORDING TO THE COMMERCE MINISTRY, A REVISED COPYRIGHT LAW IS BEING PREPARED BY THE GOVERNMENT FOR SUBMISSION TO THE PARLIAMENT. REGULATORY SYSTEM: LAWS AND PROCEDURES THE CPI WAS ESTABLISHED BY THE GOVERNMENT TO SERVE AS A "ONE-STOP SHOP" TO ASSIST FOREIGN INVESTORS MANEUVER THROUGH THE GOVERNMENT BUREAUCRACY. CPI'S SERVICES HAVE BEEN HELPFUL TO SOME BUT DISAPPOINTING TO MANY. THE PROCESS IS FAR FROM STREAMLINED AND THE REQUIREMENTS FOR REGISTERING A BUSINESS AND OBTAINING THE NECESSARY OPERATING LICENSES IS ANYTHING BUT TRANSPARENT. PREVIOUSLY THERE WAS NO STANDARD METHODOLOGY FOR REGISTERING A FOREIGN INVESTMENT, AND EACH INVESTOR NEGOTIATED HIS OWN PACKAGE OF FINANCIAL INCENTIVES WITH THE GOVERNMENT. THE NEW REGULATIONS REPRESENT A GREAT STRIDE FORWARD, BUT INVESTORS CONTINUE TO EXPRESS FRUSTRATION OVER THE BUREAUCRATIC HURDLES WHICH MUST BE OVERCOME TO START A BUSINESS LEGALLY IN MOZAMBIQUE. EFFICIENT CAPITAL MARKETS AND PORTFOLIO INVESTMENT THE FINANCIAL SYSTEM IN MOZAMBIQUE IS UNDERDEVELOPED AND DOES NOT SUPPORT THE FREE FLOW OF FINANCIAL RESOURCES. THERE IS CURRENTLY NO LONG-TERM DEBT OR EQUITY MARKET OPERATING IN MOZAMBIQUE. ONE COMPANY, SOCIEF, SERVED AS A BROKER SELLING SHARES IN A FEW PRIVATIZED COMPANIES AND PROVIDED THE MARKETING MECHANISM FOR THE GOVERNMENT'S TWO BOND ISSUES IN 1988 AND 1989. THE WORLD BANK HAS IDENTIFIED MOZAMBIQUE'S UNDERDEVELOPED FINANCIAL SECTOR AS A MAJOR DETERRENT TO THE COUNTRY'S ECONOMIC DEVELOPMENT. THE WORLD BANK PLANS TO FUND A MAJOR RESTRUCTURING OF THE FINANCIAL SECTOR DURING THE NEXT TWO YEARS. THE GOVERNMENT-OWNED BANCO COMMERCIAL DE MOZAMBIQUE (BCM) ACCOUNTS FOR 70 PERCENT OF THE COUNTRY`S BANKING ASSETS. IT IS DIFFICULT TO ESTIMATE THE VALUE OF BCM'S ASSETS BECAUSE A SUBSTANTIAL PERCENTAGE OF ITS TOTAL ASSET BASE IS NON-PERFORMING. MANY PRIVATE FIRMS PREFER TO UTILIZE ONE OF THE COUNTRY'S THREE PRIVATE BANKS: BANCO STANDARD TOTTA (AFFILIATED WITH STANDARD CHARTERED BANK), BANCO PORTUGUESE DO ATLANTICO, AND BANCO FOMENTO DO EXTERIOR. POLITICAL VIOLENCE SINCE THE END OF THE CIVIL WAR IN OCTOBER 1992, NO MAJOR POLITICALLY-MOTIVATED ATTACKS ON PROJECTS OR INSTALLATIONS HAS OCCURRED. IN NOVEMBER 1993 CIVIL DISTURBANCES IN MAPUTO WERE SPARKED BY INCREASED FUEL PRICES. GIVEN THE DIFFICULT ECONOMIC SITUATION EXPERIENCED BY MANY MOZAMBICAN WORKERS SUCH CIVIL UPRISINGS ARE ALWAYS POSSIBLE. BILATERAL TRADE AGREEMENTS MOZAMBIQUE DOES NOT HAVE ANY MAJOR BILATERAL TRADE AGREEMENTS, HOWEVER IT IS A MEMBER OF SADC AND COMESA, AFRICAN REGIONAL ORGANIZATIONS. OPIC AND OTHER INVESTMENT INSURANCE PROGRAMS OPIC DOES PROVIDE INSURANCE COVERAGE FOR MOZAMBIQUE. SOME U.S. INVESTORS ARE CURRENTLY UTILIZING OPIC'S SERVICES. INSURANCE COVERAGE FOR MOZAMBIQUE IS ALSO AVAILABLE FROM THE WORLD BANK'S MULTILATERAL INVESTMENT GUARANTEE AGENCY (MIGA). LABOR SKILLED LABOR IS IN SHORT SUPPLY IN MOZAMBIQUE. THE TRAINING OF LOCAL PERSONNEL, OR "CAPACITY BUILDING" AS IT IS REFERRED TO LOCALLY, IS A MAJOR CONCERN FOR DONORS. IT IS OFTEN DIFFICULT TO IDENTIFY TRAINED MOZAMBICANS FOR TECHNICAL POSITIONS. FREE TRADE ZONES / WAREHOUSES IN 1993 MOZAMBIQUE PASSED LAWS TO SET UP FREE-TRADE ZONES IN MOZAMBIQUE. PRIVATE DEVELOPERS ARE TO BUILD THE INFRASTRUCTURE NECESSARY FOR THESE ZONES. COMPANIES ARE REQUIRED TO EXPORT 85 PERCENT OF THEIR PRODUCTION AND TO PAY A FEE TO THE GOVERNMENT BASED ON A PERCENTAGE OF TOTAL SALES. THE FINANCIAL INCENTIVES DO NOT COMPARE FAVORABLY WITH SIMILAR FREE-TRADE ZONES ELSEWHERE AND TO DATE THERE HAS BEEN LITTLE INTEREST FROM FOREIGN OR DOMESTIC INVESTORS. MORE INFORMATION ABOUT FREE-TRADE ZONES CAN BE OBTAINED FROM CPI. CAPITAL OUTFLOW POLICY UPON THE SALE OF INVESTMENTS IN MOZAMBIQUE AND FOLLOWING PAYMENT OF ALL NECESSARY TAXES, FOREIGN INVESTORS ARE PERMITTED TO REMIT THEIR CAPITAL ABROAD IN HARD CURRENCY. THERE IS LITTLE, IF ANY, OFFICIALLY-REGISTERED DIRECT INVESTMENT ABROAD BY MOZAMBICANS. FOREIGN DIRECT INVESTMENT STATISTICS FOREIGN DIRECT INVESTMENT IN MOZAMBIQUE HAS BEEN LOW DUE TO THE CIVIL WAR WHICH ENGULFED THE COUNTRY UNTIL THE PEACE ACCORD IN OCTOBER 1992. FOREIGN DIRECT INVESTMENT IN MOZAMBIQUE WAS USD 21 MILLION IN 1991, USD 25 MILLION IN 1992, AND USD 15 MILLION IN 1993. WHILE MANY OBSERVERS ANTICIPATED INCREASED INVESTMENT FLOWS WITH THE ADVENT OF PEACE, FOREIGN INVESTORS HAVE LARGELY REMAINED ON THE SIDELINES, ATTENTIVELY FOLLOWING THE PEACE PROCESS AND THE RUN UP TO ELECTIONS SCHEDULED FOR OCTOBER 1994. THE SOUTH AFRICANS AND PORTUGUESE HAVE TAKEN THE LEAD IN MAKING INITIAL INVESTMENTS IN AGRICULTURE, TOURISM, MINING, AND GENERAL TRADING OPERATIONS. MAJOR FOREIGN INVESTORS THE LARGEST FOREIGN INVESTOR IN MOZAMBIQUE IS LONRHO, WITH EXTENSIVE HOLDING IN AGRICULTURE, MINING, TOURISM, AND TRADING. U.S. COMPANIES WITH INVESTMENTS IN MOZAMBIQUE INCLUDE MOBIL OIL (USD2 MILLION), COLGATE-PALMOLIVE (USD 370 000), ERNST AND YOUNG (USD 130,000), KPMG MARWICK, AND EDLOW RESOURCES--MINING (USD 3.2 MILLION). MANY U.S. COMPANIES, INCLUDING 3M AND FLUOR ENGINEERING, CHOOSE TO COVER THE MOZAMBICAN MARKET FROM OFFICES IN SOUTH AFRICA.