Mozambique 13 July: Let them drink beer
Good morning. Those hoping for peace in Mozambique have been largely disappointed by the news that yet more mediators are to be added to the growing group seeking to bring President Filipe Nyusi and Renamo leader Afonso Dhlakama to the negotiating table.
The original ‘mixed commission’ of six negotiators has already been expanded, at Renamo’s insistence, by the addition of another three on either side, and invitations have been sent to outside mediators from South Africa, the European Union, and the Catholic Church. This week, it emerged that the government also wants to appoint mediators – two former presidents from the SADC region, as well as a representative from former UK Prime Minister Tony Blair’s Faith Foundation.
SEE: Mozambique government invites more international mediators
The prospect of having eighteen participants round the table has revived fears that the mixed commission, which had made progress during its short history, would fall into a repeat of the endless and fruitless weekly negotiations held at the Joaquim Chissano Conference Centre in Maputo from late 2013 until they were abandoned in 2015. There have also been calls for other Mozambican civil society actors to be involved – which risks it becoming less of a commission, and more of a conference. Let’s hope resolution is not being kicked into the long grass.
The government has presented its revised budget to parliament, but its promises to trim spending couldn’t stop ratings agency Moody’s from downgrading Mozambique yet further.
SEE: Moody’s cuts Mozambique rating on fear of multiple defaults
The financial and economic crisis is making itself felt across the economy. Yesterday Zitamar reported that Sasol has failed to raise debt to take its investment in the Ressano Garcia gas-fired power plant off its balance sheet. Financing sizeable deals in Mozambique today is “a big challenge”, according to one international bank which has been doing deals in Mozambique since the early ‘90s.
SEE: Sasol yet to close project finance of Mozambique power plant
The latest results from brewing monopoly Cervejas de Moçambique are an interesting indicator of the state of the nation. Sales are up on the previous year thanks to an increased thirst for beer, but tighter personal budgets mean sales of wine and spirits are down.
SEE: Beer sales boost Mozambique brewery profits in challenging year
The government feels it can’t risk raising the price of bread, but if there isn’t any on the shelves then it doesn’t matter much how cheap it is. Bakers complain they are running at a loss since the government blocked their plan to raise prices, and many are now cutting production and laying off workers. A price rise seems inevitable.
FREE TO READ: Bread shortages likely to lead to price rise in Mozambique
Have a great week.