Mozambique 9 Feb: Investors return for a second bite of the cherry

Good afternoon. High profile foreign investors remain interested in Mozambique, despite the growing political and economic unease. Zitamar News this week revealed former Barclays CEO Bob Diamond is trying again to snap up the bank formerly known as Moza Banco through his pan-African banking group Atlas Mara.

If Diamond and his business partner Ashish Thakkar win approval to buy Portuguese Novo Banco’s 49% stake in Moza, a deal they first tried to do almost a year ago, they plan to merge it with the local operation of BancABC which they bought in 2014. Atlas Mara’s expansion strategy in Mozambique mirrors one they used last year in Rwanda - and it seems Zambia could be next.

SEE: Atlas Mara seeks approval for BancABC-Moza merger

Diamond and Thakkar are not the only investors hoping its second time lucky in Mozambique. Indian coal mining consortium ICVL has re-launched a tender to try and persuade a power generation company to build a plant in Benga, Tete, to burn off some of their excess thermal coal and provide power to the mine where they are expected to re-start work in the next few months.

SEE: Indian coal miners tender 200 MW pit-head power project

The company’s country head Nirmal Jha told a coal conference in mid-2015 that investor interest in the Benga power project had been “lukewarm” due to an offtake constraint. However, this may be about to change. Last month, Shanghai Electric Power signed a joint development agreement for the Ncondezi Power project, which suggests the Chinese are confident that the ‘backbone’ interconnector, to take power from Tete down to southern Mozambique, may finally get built.

The mystery of the Bank of Mozambique deputy governor Antonio Pinto de Abreu’s sacking last month was solved yesterday when he was appointed the new head of national airline LAM. Normally when a high profile official loses their job in this government they are appointed to a new one within the day - see, for example, deputy business minister Omar Mitha becoming head of oil company ENH, or deputy finance minister Amelia Nakhare moving to head up the tax authority. Abreu was made to wait a couple of weeks, leading to rumours about his health; finally, however, the (new) head of IGEPE announced Abreu will be the latest in a series of appointments to try and turn LAM around.

SEE: Mozambique’s LAM airline gets new CEO

Tensions between the government and opposition movement Renamo remain high, with Renamo apparently ready to take concrete measures to wrest some practical power away from ruling party Frelimo in the central provinces. A new threat to impose highway checkpoints was met today with an unequivocal response from the police, who say they will not stand for it.

SEE: Mozambique police vow to block Renamo checkpoint plan

Frelimo opted for a relatively low key reshuffle at last Friday’s Central Committee meeting, defying predictions that a new Secretary General would be chosen. Investors in the extractives sector will recognise the name of Frelimo’s new internal head of finance and administration, Esperança Bias, minister for natural resources in Armando Guebuza’s government. The other new faces in the secretariat are described as ‘rising stars’ about whom we will learn more in the coming months. But don’t rule out higher profile changes in the government’s ranks in the meantime.

Have a great week.