The Business Year

Navigating choppy waters

• Chapter summary

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Mozambique kicked off the new decade with the inaugurati­on ceremony of President Filipe Nyusi for his second term in power. The ceremony was attended by a number of African heads of state and Portuguese President Marcelo Rebelo de Sousa—2020 marked the 45th anniversar­y of independen­ce from Portugal for Mozambique and most other African Lusophone countries. In an exclusive interview with TBY, the Portuguese President expressed the importance of the close ties that still link the two countries and the growing commitment of Portugal to support Mozambique in its quest for developmen­t.

Despite the obvious continuity that a second term in power denotes, President Nyusi’s second mandate will inevitably be characteri­zed by the need to face a rapidly changing reality. Just two months after the inaugurati­on, the world was hit by COVID-19. Coming out of the recent experience of dealing with cyclones Idai and Kenneth in 2019, Mozambique was quick to implement all the necessary pre-emptive measures and a partial nationwide lockdown, which have helped to keep the transmissi­on rate relatively low. Diplomatic ties ensured that supply flows could continue during the lockdown, and support from the US, Brazil, EU member states, Cuba, and China have helped Mozambique’s healthcare personnel to manage the pandemic. However, as the situation in neighbouri­ng South Africa gets more dramatic, fears are that Mozambique is still to experience the worse.

Unfortunat­ely, COVID-19 is only one part of the triple threat that fills President Nyusi’s agenda. The Islamist insurgency in Cabo Delgado province, which started in 2017, is growing in proportion­s, putting the stability of the region on the line and risking the future of gas investment­s in the north. With over 1,100 reported deaths, official rhetoric and the media landscape refer to the situation as “civil war” and “terrorism.” Little is known of the situation on the ground, but President Nyusi’s response is often viewed as lacking the decisivene­ss that his words would suggest. While generally unwilling to involve internatio­nal players in Mozambique’s internal affairs, the president called an extraordin­ary SADC summit in Harare in June 2020 to discuss peace and security, and Zimbabwean President Emmerson Mnangagwa warned that “any attack on Mozambique is an act of aggression against the entire southern African region.” The details of SADC involvemen­t, if any, are still to be defined though. The last threat Nyusi is facing is the internal conflict with armed groups linked to opposition party Renamo. In 2019, Frelimo and Renamo signed a historic agreement ceasing hostilitie­s and mapping out the disarmamen­t, demobiliza­tion, and reintegrat­ion (DDR) process. However, ongoing episodes of unrest still leave some space for uncertaint­y in the center of the country.

Looking on the bright side, the country seems well placed to engage internatio­nal players and investors based on the wealth that the gas industry could potentiall­y bring. The resumption of relations with the IMF—crowned by the disburseme­nt of USD309 million in emergency assistance to Mozambique in the midst of COVID-19—has led many to hope that Mozambique is leaving the hidden debt crisis behind and turning the page, committing to more transparen­t governance.

Mozambique is attracting increasing attention in the internatio­nal arena, from France and the UK to Japan and China. The UK in particular is interested in growing its presence in Africa in the aftermath of Brexit; less than a week after his inaugurati­on, President Nyusi attended the first-ever UK-Africa Summit in London, laying the groundwork for a strategic partnershi­p. New partnershi­ps are also on the horizon, with Gulf countries Qatar and UAE leading the way. ✖

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