Mozambique Leases a Port Terminal to Landlocked Malawi

In a rare move, Mozambique is planning to lease part of its northern port of Nacala to neighboring landlocked Malawi. The deal seeks to boost trade ties between the two countries. To formalize the initiative, Mozambican President Filipe Nyusi and his Malawian counterpart, Lazarus Chakwera, last week signed initial agreements of the concession deal.

This will see Mozambique carve out a space at the Port of Nacala, which Malawi can develop into a terminal for its goods.

“The agreements will benefit both countries, since they are instruments that aim to enable initiatives that are already underway such as the Mozambique-Malawi joint electrification project called MOMA,” explained Nyusi.

The Port of Nacala is part of the Nacala Development Corridor, which is being developed jointly by Malawi, Zambia and Mozambique. The goal is facilitating regional connectivity and sea access for the landlocked Malawi and Zambia. The corridor comprises a total of 722 miles of road network, railway rehabilitation connecting to Malawi’s capital of Lilongwe and one-stop border posts (OSBP) among the involved countries.

Specifically, the Port of Nacala has proved competitive to Malawian national economic interests. The National Oil Company of Malawi (NOCMA) has recently started to import around 15 million liters of fuel through Nacala, using rail transport. With this shipment possible, Malawi will gradually reduce its dependence on the ports of Beira (Mozambique), Durban (South Africa) and Dar es Salaam in Tanzania, where import costs are high due to use of road transport.

“I am pleased that we will soon be able to reduce the overland costs of fuel transport, which translate into lower fuel prices in Malawi,” said President Chakwera.

Since 2018, the port of Nacala has been undergoing modernization thanks to $300 million in financing from the Japan International Cooperation Agency (JICA). The upgrades include dredging to a terminal depth of 14 meters and new equipment for  cargo handling.

This expansion has started to pay off, and Nacala is emerging as a key dry bulk export port in Africa. In the past year, close to 14 million tons of coal were transported from the Moatize mine in Tete province to the port of Nacala via Malawi. In addition, the port handled 3.1 million tons of general cargo last year, representing 103 percent of what the port had projected. The figure is expected to rise to 3.5 million tons by December of this year, according to the port’s director of infrastructure, Nelmo Induna.