Mozambique, officially the Republic of Mozambique, is a country in Southeast Africa bordered by the Indian Ocean to the east,Tanzania to the north, Malawi and Zambia to the northwest, Zimbabwe to the west, and Swaziland and South Africa to the southwest. It is separated from Madagascar by the Mozambique Channel to the east. The capital and largest city is Maputo. Mozambique is a member of the African Union, Commonwealth of Nations, the Community of Portuguese Language Countries, Organization of Islamic, the Latin Union, Cooperation and Southern African Development Community and an observer at La Francophonie.

The Government follows a liberal economic policy and has managed a stable economy over the last decade. Peace allowed the country to accelerate the pace of economic reforms initiated in the late 1980’s. The financial market was liberalised while thousands of companies were privatized. The country has successfully held several presidential, legislative and municipal elections. The most recent multi-party elections, held in October 2009 were peacefully conducted. The next presidential elections are to be hold in 2014. The Government of Mozambique has put in place a number of policies and strategies to improve the business and investment climates. Mozambique is endowed with rich and extensive natural resources. The country's economy is based largely on agriculture, but with industry, mainly food and beverages, chemical manufacturing, aluminium and petroleum production, is growing. The country's tourism sector is also growing. South Africa is Mozambique's main trading partner and source of foreign direct investment. Portugal, Brazil, Spain and Belgium are also among the country's most important economic partners. The key underlying principles for these plans and strategies include that the government’s role is to act for the development of human capital, economic and social infrastructure with the purpose of reducing poverty. Promotion of a favourable business environment is one of the tools. This is in line with Danida’s global strategy that has a strong focus on economic growth and employment creation, and the government is strongly committed to the reduction of poverty. This is reflected in the establishment of a series of economic reforms, sound macroeconomic policies and attainment of the Millennium Goals. The country has a population of around 23 million, most of which live in rural areas in subsistence agriculture. Main exports are aluminium, prawns, cashews, cotton, sugar, citrus, timber and bulk electricity; the most important imports are machinery and equipment, vehicles, fuel, chemicals and metal products. Official Development Assistance finances just under half of the Government budget.

The literacy rate in Mozambique is very low. The government has increased the number of schools, the number of teachers and introduced adult literacy courses. Nevertheless, while Maputo enjoys most of this progress, the rest of the country still has low quality schooling facilities and pupils drop out of school at a very young age, especially girls. The number of universities in the country has increased, providing a variety of tertiary education courses. Despite the fact that tertiary education has become more accessible, the quality is still a major concern. Companies are encouraged to invest in training their staff as it impacts directly on labour quality.

 

HIV/AIDS is considered an enormous threat to the Mozambican economy due to its increasing incident in the country. Mozambique is one of the 10 most affected countries in the world. HIV/AIDS mainly affects young adults thereby impacting on the quality and efficiency of the labour force. The role of companies in addressing HIV/AIDS related issues is vital through for instance education of employees, encouragement of testing and treatment and acceptance of infected workers. Mozambique promotes itself as a model for development.