11 Jul Interview with Pedro Carvalho, Chief Operating Officer at Absa Bank, Mozambique
The banking sector in Mozambique is entering a new cycle of modernization with economic reforms, technological advances and challenging regional dynamics. How would you assess the evolution of Mozambique’s banking sector in recent years?
Mozambique’s financial sector has the advantage of being highly diversified. Currently, there are around eighteen banks operating in the country, with shareholders from a wide variety of origins. Most banks in Mozambique have foreign shareholders from Europe, South Africa and other parts of Africa. This makes for a diversified and well-capitalized financial system.
All banks maintain high levels of capital and liquidity, which effectively allows the financial system to play a strong role in supporting Mozambique’s economic development. The financial sector as a whole has grown at a very rapid pace in recent years and has evolved considerably in terms of new services and technological offerings. Today, the payment systems are among the most modern globally, both domestically and internationally. Transactions between different banks are carried out in real time, all cards are accepted and the financial system operates on par with the best international standards. This has made a significant contribution to Mozambique’s economic development.
Digital transformation is advancing quickly and leadership is essential for achieving sustainable results. As CEO, what are your short- and medium-term priorities?
Today, banking in Mozambique and globally cannot be imagined without a strong digital component. At Absa Mozambique, we take pride in offering all our clients, whether individual or business customers, digital channels that allow them to interact with the bank in a convenient, simple, agile and, ideally, cost-effective way. Naturally, digital banking helps reduce operational costs. We also aim to tailor our digital channels to the needs of different client segments. We have specific digital platforms for individuals, small and medium-sized enterprises and advanced corporate clients with complex requirements. This effort is not limited to Absa Mozambique; it is part of the broader Absa Group strategy across all African countries where we operate.
This consistency allows large corporate clients with a presence in multiple countries to have a uniform digital experience and integrate their operations across borders. Digital banking is undeniably important to us and to all our competitors in this market.
In Mozambique specifically, we have seen strong growth in mobile wallets, which are primarily offered by mobile network operators. These wallets have significantly expanded access to financial services. Mozambique is a vast country with a rapidly growing population and it has traditionally been difficult to reach everyone through conventional banking channels. With mobile wallets and telecommunications, banks have been able to partner with mobile operators to launch these services. As a result, anyone with a mobile phone can now access banking services without restriction.
At Absa, we are focused on expanding our digital banking services under our brand and also on strengthening partnerships with mobile operators. These partnerships have led to the integration of Absa services with mobile wallets in a convenient and simple way. Over the past years, these collaborations have grown significantly and we believe the future of banking will increasingly be digital.
Still, within our strategy, we believe that while digital channels are essential for all transactional activities such as payments, transfers and collections, personal banking remains crucial for advisory services. Economic and financial literacy levels in Mozambique and much of Africa are still relatively low. That is why we are committed to ensuring that our people are always available to engage with clients to provide them with the advice, information and reassurance they need for their savings and investment decisions. These are difficult to deliver effectively through digital channels. So, while we prioritize digital channels for transactions, we remain equally committed to maintaining personal relationships when it comes to financial guidance.
The bank reported record profits close to €26 million in 2024. Absa Bank Mozambique is one of the most influential financial institutions in the country. What factors contributed to this remarkable performance?
Absa’s operations in Mozambique have grown significantly over the past ten years, with an even sharper acceleration in the last five. Today, we are one of the main players in Mozambique’s financial industry. In 2024, we achieved our best financial performance to date. Our business grew strongly: client deposits at Absa increased by around 25% and our credit portfolio expanded by nearly ten percent. These growth rates surpassed those of any of our competitors and our market share has been rising steadily year after year.
This success is the result of offering convenient banking services while maintaining strong personal relationships with our clients. This combination of digital convenience and personal engagement has proven to be a winning formula that our clients and the broader market have recognized. It has allowed us to continue growing, even in challenging economic conditions.
The end of 2024 and the beginning of 2025 were socially and economically demanding periods. Despite this, we achieved our best year ever and we hope to continue raising the bar and breaking records in the years ahead. The formula is simple: provide the best banking services in the most convenient way possible, while also remaining personally available to welcome, serve and advise our clients.
We currently hold a market share of around 10%. We are the fourth-largest bank in Mozambique. The Bank of Mozambique classifies us as an almost systemic bank, indicating our significant impact on the banking system. This position has been steadily consolidating over recent years and based on our business plans and projections, we expect to continue growing without a doubt.
In a country with vast economic potential, the role of financial institutions is vital to driving growth. What are Absa Bank’s main strategies for supporting economic development in Mozambique?
We believe that development will come from a combination of public and private sector efforts. The state plays a major role in economic development. Mozambique is a very young country and celebrated its 50th anniversary of independence last month. The country is still under construction, so to speak — I am older than Mozambique — so naturally, the state still plays a crucial role in economic development.
From the public sector perspective, Absa has been actively supporting the state in public financing, debt management and in designing financing models that combine the capabilities of both the Mozambican financial system and multilateral institutions like the World Bank, the IMF and the African Development Bank, among others. These partnerships support state-led projects and initiatives. In parallel, we have been increasingly focused on developing the private sector, which we believe must be the engine of future growth in African countries.
We have concentrated our efforts on supporting small and medium-sized enterprises, a segment still in its early stages and in need of strong banking support. Another key area of private sector development, where Absa has strong credentials, is in attracting foreign investment. We are a preferred bank for foreign investors operating in Mozambique and across Africa. We guide them through local market dynamics, support them through the formal processes of registering foreign investment and provide local banking services and financing that complement their external capital.
Our work spans both the public and private sectors. On the corporate side, we are deeply involved, but we also recognize that as the country and population grow, personal banking presents huge opportunities. Our focus in this segment has been to support Mozambique’s emerging middle class. In every country where Absa is present in Africa, we have seen the rise of this new middle class and we position ourselves as the bank that supports this segment. We call this ‘affluent banking.’ These are people who are beginning to enjoy higher living standards, who own homes and cars and who have stable employment. We aim to support them because they drive the economy. Through their consumption habits, they generate jobs. By focusing on this affluent segment, we believe we are helping to energize the entire economy. That, in summary, is Absa’s strategy and vision for supporting economic development in Mozambique.
Another important point is that we believe Mozambique’s growth is closely tied to five specific sectors of the economy. The first is energy. Mozambique has virtually unlimited sources of renewable energy. We have many days of sunshine, rivers capable of generating hydroelectric power and we are starting to explore wind energy as well. The country has the potential not only to supply energy for its own needs but also for the entire region. Mozambique is among the countries best positioned to produce green and renewable energy, which is crucial for the planet today.
The second sector is natural resources. Mozambique has a rich variety of minerals and over the past two decades, we have confirmed big natural gas reserves. These have already begun to be exploited and we believe they will be developed much more intensively shortly. Two major projects, one led by TotalEnergies and another by ExxonMobil, are expected to move forward soon. These multi-billion-dollar projects could transform Mozambique into a powerhouse for natural resources.
The third sector is logistics. Mozambique benefits from an excellent geographic location, which allows the country to become a logistics platform not only for itself but for the entire region. Mozambique offers the most efficient and convenient access to the sea for several landlocked countries and the development of these logistics corridors has enormous economic potential.
The fourth sector, probably the most important, is agriculture. According to World Bank data, only about 15% of Mozambique’s arable land is currently being used. This means there is immense potential for agricultural expansion and food production. Mozambique could help ensure food security for countries both in the region and beyond.
Finally, we must mention tourism. We love Mozambique, we love the Indian Ocean and we love our beaches. Mozambique has 1,800 miles of white sandy coastline and blue waters. The natural beauty is undeniable. The challenge now is to convert that potential into real economic value. We need to find ways to leverage these natural assets to generate growth.
In short, Mozambique holds enormous potential. At Absa, we are focused on working with both the public and private sectors to responsibly harness these opportunities and, above all, to ensure that they translate into social development. Economic growth that does not reach the people is not meaningful development. Today, it is clear to all decision-makers that development must be inclusive. Absa and the financial sector as a whole play a key role in ensuring that every Mozambican feels the impact of this growth. That is without a doubt our goal for the years ahead.
How is the bank currently working with the government, especially the new administration? In which sectors and projects are you collaborating?
We are working very closely with the new government. President Chapo’s administration took office on January 15, so it is still quite new. Nevertheless, we are engaging with various ministries to explore how we can support the government’s strategic plans, which have already been presented for the next five years. The focus areas outlined by the government are very much aligned with our vision for the country’s potential.
We understand the scale of investment required and even though Mozambique’s financial system is robust, it is not enough on its own to support all the projects currently under consideration. This is where we also take responsibility for looking beyond Mozambique to find partners who can help bring these projects to life. These partners include multilateral institutions such as the World Bank and the African Development Bank, as well as private sector players. We aim to attract private investors to come to Mozambique and become allies in the country’s development.
Many of the major initiatives are being designed and structured as partnerships that always involve Mozambique working with international players. These can be partnerships with the government, with public companies, or with the local private sector, which plays a key role in bringing the necessary local knowledge to make these partnerships viable. We always recommend that foreign investors identify local partners who can help accelerate their projects and contribute to Mozambique’s economic development.
We are not passively waiting for requests to come to us. We are a proactive bank, actively seeking out investors and partners while collaborating with the government to ensure our interests are aligned. That is precisely why, in addition to our presence in several African countries, Absa also has representative offices in the US, the UK and China. Very soon, we will open a new office in the United Arab Emirates. We also have plans to expand into other countries and continents outside Africa. This reflects our proactive spirit, reaching out beyond the continent to find partners and attract foreign investment to Africa. We have no intention of operating outside Africa. We are purely an African bank, but one that is committed to building bridges with the rest of the world to bring investment into the continent.
How would the bank sell its services to potential American investors and how can it facilitate access to financing for them?
The bank has extensive experience and a large number of case studies demonstrating how we have supported foreign investors who came to Mozambique and succeeded. From a banking perspective, Absa and the Mozambican financial system are highly sophisticated and operate in line with global best practices. We manage financial flows to and from Mozambique with ease. Our international payment systems, correspondent networks and SWIFT connectivity are all fully available to our clients.
Beyond that, what truly adds value for foreign investors is our knowledge and advisory capabilities. When a foreign investor enters a new market, they’re unfamiliar with the local environment. They can’t afford to take risks because they don’t know which partnerships to pursue, how to engage with the government, or how the regulatory framework works. Absa supports these potential investors by providing insights into the local context. We offer a full knowledge package that proves extremely useful. In some cases, we provide this knowledge directly. In others, we do it through partners. For example, we are not allowed to provide legal advice as a bank, but we work with the most reputable law firms in Mozambique and facilitate those connections.
We also work closely with the embassies of the main investor countries. We have privileged relationships with many of them and we regularly prepare economic briefings or travel abroad to present both Absa and Mozambique to prospective investors. This helps create the level of comfort needed for them to consider Mozambique as an investment destination. Knowledge is the foundation. People often think the greatest value a bank brings is money, but it’s knowledge. That’s what strengthens business cases, helps manage risk and informs go-or-no-go decisions. Sometimes, the information we bring to the table leads to a no-go. But that’s our role: to be transparent, to identify risks as well as opportunities and to provide a balanced view. Those two aspects usually go hand in hand.
From a strictly financial standpoint, Absa has the capabilities to support new project financing in two ways. We offer onshore solutions in local currencies within the countries where the investments are made and we also offer offshore financing. We have subsidiaries in Mauritius and Seychelles, which serve as booking centers through which we provide financing in foreign currencies. This allows us to offer highly customized solutions that combine local and international capabilities.
Absa operates as a unified bank, even though it consists of several local entities. We take a holistic approach to developing the best solution for each client. There is no one-size-fits-all model. It requires sitting down with the investor, understanding the project, identifying opportunities and risks and then tailoring a solution to meet the specific needs of that investor. We can have all the banking services and digital channels in place, but at the end of the day, what truly matters is trust. This isn’t unique to Mozambique; it’s a global trend. Banking is becoming commoditized. The differences between banks and services offered in any given market are increasingly minimal. What Absa wants to offer goes beyond commoditized banking services.
With this new government now in place, what would be your final message to the readers of this story in USA Today?
Mozambique is entering a new era. We have a new government. The inauguration of this administration has brought to light a number of social challenges. We’ve come through a very difficult period, which is fortunately behind us. Today, the situation in terms of security and social stability is very positive and we’ve seen the new government bring a sense of energy and vision that inspires confidence in the future.
Mozambique has enormous economic potential. Its geographic location is exceptional, especially when it comes to serving Asian and Middle Eastern markets. We also have our partner country, Angola, on the other side of the continent. For example, the Lobito Corridor is becoming a critical route for access to the Atlantic region, just as Mozambique’s corridors are vital for access to the Indian Ocean. These corridors are not in competition; they are complementary. Each serves one of the world’s largest economic blocs.
We are very optimistic about Mozambique’s future and this new government. That said, it is important to understand that change won’t happen overnight. Investors in Africa must realize that processes here are slower but tend to be consistent and sustainable. Absa is here to support that journey. We are the first to believe in this continent. We are not a foreign bank. We are not an international bank. We are an African bank. Our shareholders support this strategy because we all believe in Africa’s future. There are enormous opportunities and there are some risks. Absa is the right partner to help navigate those risks and unlock those opportunities.