South African FDI in Mozambique: Gas pipeline case study

The countries belonging to the Southern Africa Development Community (SADC)1 are well endowed with natural resources but their level of industrialisation and human development remain low. According to Legum and Drysdal (1969: 406) natural gas fields were first discovered in Mozambique during the early 1960s.2 Gas reserves in Southern Africa have increased from 1974 to 2000 by 103% but it has been lying dormant mainly because of a lack of indigenous markets and the war in Mozambique. Now that the demand and market for gas is increasing and the 1992 peace treaty in Mozambique is observed, the governments of South Africa and Mozambique are enlisting the support of their parastatals and foreign companies to develop this economic potential.