Mozambique 9 Nov: The poker game begins
Good afternoon. The Mozambique government is under renewed pressure this morning after a committee of investors holding more than 60% of the EMATUM-replacement sovereign bond said they would not negotiate until after the international audit is completed and published, and an IMF programme is in place.
SEE: Mozambique creditors say no negotiations until debt audit is made public
If the bondholders stand firm on those terms, it would mean the government’s hoped-for timetable, of restructuring its debt before the first coupon on the bond is due in January, will definitely be missed. The bondholder group - which includes firms specialised in negotiating with troubled sovereigns - will be betting that Mozambique pays the coupon to buy more time. But their gamble risks pushing Mozambique into a default.
Meanwhile, the government has released a statement emphasising that at this stage, all options remain on the table for the restructure and that the priority is a rapid conclusion to the negotiations.
SEE: Mozambique says ‘premature to speculate’ on investor haircuts
Mozambique’s economic crisis - and in particular, the foreign exchange crisis - continues to take its toll on the real economy. A rumoured fuel crisis seems to have been averted, for now, but brewer Cervejas de Moçambique is blaming the lack of dollar liquidity for a drastic drop in profits.
SEE: Mozambique government says no fuel crisis on the horizon
SEE: Mozambique forex crisis slashes brewer’s profits
Last Friday a new head was appointed to Mozambique’s stock exchange. The exchange is in need of revitalising if it is to play its role in helping develop the domestic economy while foreign-owned mega-projects move ahead.
SEE: New head of Mozambique stock exchange appointed
And finally - all eyes are on the news coming out of the US today. What might it mean for sub-Saharan Africa? When Obama won in 2008, there was widespread hope that his election would signal greater engagement with the continent. Today, it’s hard not to think the opposite. The new President-elect appears to have little interest in Africa, and perhaps that’s for the best.
Have a great week.