M.Comm. / The purpose of this study is to identify and investigate potential obstacles for local and international investors in the Maputo Development Corridor (MDC). This study focuses exclusively on the Maputo-Mpumalanga Corridor axis which could be considered as an important nucleus of the eastern region of Southern Africa. The possibility of cooperation concerning the Corridor offers both South Africa and Mozambique - who have until recently both experienced less than optimal international trade relations – the opportunity for enhanced competitiveness. The study therefor attempts to measure the perceptions of potential investors to identify obstacles regarding the process of regional economic integration involving the Map uto-Mp umalanga Corridor in attracting investments. After thorough evaluation of the potential investment sectors among the various role players it became clear that tourism is the sector with the largest potential for investment. Next are the transport and agricultural sectors which show great potential and then, to a lesser extent manufacturing projects. By putting emphasis on these sectors as investment opportunities in particular, will result in more concentrated and graduated progress. With reference to the fact that investment is taking place slowly or does not take place at all, it is obvious that the,re are certain obstacles in the way of investment. The response that has been obtained shows clearly that the different role players do not regard the same factors as obstacles. This mere fact is probably already the biggest obstacle of them all. The fact that international investors regard safety and security as well as bureaucracy in the public sector as the two biggest obstacles, is a serious cause for concern. It shows that overseas investors are not as yet convinced of South Africa's democracy and its new government. Taking all the role players' opinions into consideration, it can be said that the general obstacles in investment in the Corridor can mainly be identified as follows: Safety and security. Bureaucracy in the public sector. Labour problems (productivity and demands by trade unions). Quality of products from Mozambique. Unless both governments address the above-mentioned obstacles immediately, potential investors would continue to regard the Maputo Corridor as unfavourable to a certain extent. This study therefor provides a clear explanation of the most important sectors for investment. It also identifies the most important obstacles to investment in the Maputo-Mpumalanga Development Corridor. It should be seen as an introduction to further research, for a more in-depth investigation of each sector will provide more specific problems and opportunities.

Thesis (MDF (Development Finance))--Stellenbosch University, 2008. / ENGLISH ABSTRACT: Mozambique managed to attract a lot of foreign direct investment despite it being one of the poorest countries in the world and after it has been through a devastating 17 year civil war. GOP per capita in 1995 was about US$ 144 which was one of the lowest in the world. The country was faced with enormous challenges and risks in terms of both country and political risk. Major risks were associated with investment in that country because of prolonged civil war with no record of macro-economic stability. Despite these huge challenges, Mozambique managed to attract a lot of investment with Mozal 1 being the first big project post civil war. This paper analyses and quantifies where Mozambique was before and after mega projects. This is done by looking at where Mozambique was before Mozal 1 being the first mega project in the country post civil war. The analysis is in terms of political risk as it relates to cross border transactions with specific reference to a number of political risk indicators as suggested by Brink (2004) that prevailed and how the projects were structured to minimize risk. A political risk rating is developed for 1995 and 2005 using the Brink model to check if the project did improve the country's economic health. / AFRIKAANSE OPSOMMING: Mosambiek het daarin geslaag om grootskaalse direkte buitelandse investering te lok ten spyte van sy status as een van die wereld se armste lande en die verwoestende burgeroorlog wat 17 jaar geduur het. Die BBP per capita was ongeveer US$ 144 in 1995, wat dit een van die laagstes in die wereld gemaak het. Die land het enorme uitdagings en risiko's in die gesig gestaar in terme van die land en die politiek. Die hoofrisiko's het met investering verband gehou vanwee die langdurige burgeroorlog en geen makro-ekonomiese stabiliteit in die land se verlede nie. Ondanks hierdie reuse uitdagings het Mosambiek daarin geslaag om baie investering te lok, waarvan Mozal 1 die eerste megaprojek na die burgeroorlog was. Hierdie tesis analiseer en kwantifiseer Mosambiek se posisie voor en na megaprojekte. Dit is gedoen deur te kyk na hoe Mosambiek daar uitgesien het voor Mozal 1. Die analise is in terme van die verband tussen politieke risiko en oorgrenstransaksies gedoen. Daar word spesifiek verwys na 'n aantal aanwysers van politieke risiko, soos voorgestel deur Brink (2004), wat geheers het en hoe projekte gestruktureer is om risiko te verminder. 'n Gradering van politieke risiko is vir 1995 en 2005 aan die hand van Brink se model ontwikkel om te kontroleer of die projek die land se ekonomiese gesondheid verbeter het.