Mozambique 15 March 17: Optimism in the air

Good afternoon. A sense of optimism has returned to the Mozambican economy, where the currency is holding firm at around 70 to the dollar despite gloomy forecasts that it was headed for 100. It appears that, counterintuitively, the government’s decision not to honour the controversial foreign debts is supporting the currency. But for how much longer?

SEE: Mozambique currency shrugs off sovereign default to firm up against the dollar

Those debts were the key determinant of the financial and economic crisis that led to such a bad 2016 for Mozambique, but there were other elements too which are now seeing a turnaround. Commodity prices - in particular coal, but also gas - are recovering, and the rains have finally arrived, leading to optimism in the sugar sector too.

SEE: Sugar grower expects recovery in Mozambique and region as drought ends

Developments in the gas sector are raising spirits, but final investment decisions are still delayed. Nyusi is in Japan trying to chivvy buyers to commit to Anadarko’s LNG project, while Eni will need to renew its agreement with BP if it has not reached FID on its floating LNG project by the end of this month.

SEE: Eni likely to miss March FID on Coral FLNG, leaving LNG sales contract uncertain

There remains a disconnect between what state oil company ENH believes about the future of the Pemba Logistics Base, and the private sector’s view. ENH head Omar Mithá insists that Eni and Anadarko will use the base, once it is built - but the companies seem reluctant to commit.

SEE: Eni and Anadarko still keen to use Pemba Logistics Base, says head of ENH

And finally, the owner of a gold mining concession in Manica is preparing to  start developing the mine, having decided to keep things as simple as possible.

SEE: Definitive study recommends simplified model for Manica gold mine

Have a great rest of the week.

RECENT POSTS

• Eni likely to miss March FID on Coral FLNG, leaving LNG sales contract uncertain

• Mozambique currency shrugs off sovereign default to firm up against the dollar

• Eni and Anadarko still keen to use Pemba Logistics Base, says head of ENH

• Sugar grower expects recovery in Mozambique and region as drought ends

• Definitive study recommends simplified model for Manica gold mine