Mozambique 24 May 2017: Uncertainty clouds a positive outlook
Good afternoon. Mozambique fell further into arrears this week on the guarantees signed by Finance Minister Manuel Chang in 2013-14, which are today the subject of yet more speculation and controversy. The government insists it will honour them - at least in part - but the de facto non-payment has been a tonic for the Mozambican metical which has gained 25% in the seven months since the government said it had no money to service the debts.
FREE TO READ: Mozambique currency strengthens as ‘hidden debts’ go unpaid
The non-payment is probably not the only reason for the strengthening metical - a slump in imports and an increase in the value of key commodity exports have also played a role, as has the return of peace. Today, Renamo leader Afonso Dhlakama said he is frustrated with the pace of progress toward a new political settlement - but told his supporters to remain patient.
SEE: Mozambique opposition leader calls for patience as troops remain in Gorongosa
There are, of course, risks to the positive outlook. One key uncertainty is what will ultimately be disclosed from the Kroll audit into the secret security deals. Today, the Attorney General publicly denied involvement in some purported, though clearly fake, ‘leaks’ - a move which led to it being accused of being a tool of Filipe Nyusi’s government.
SEE: Mozambique Attorney General accused of being ‘a tool of the executive’
The ongoing uncertainty is likely to have hit the value of bids submitted to take over Moza Banco from the central bank, which took Moza into its protection in September last year. The bid deadline has now passed, with a decision due by 9 June.
SEE: Moza Banco bidders wait for decision on 9 June
And finally, the leading large-scale graphite project in Cabo Delgado is getting closer to starting operations, and is hopeful that its mining agreement will come before the Council of Ministers in the next couple of weeks.
SEE: Syrah expects Mozambique graphite mining agreement ‘within two weeks’
Have a great rest of the week.