Rwandan company wins Palma construction deal

And: Tomatoes, eggs, and fuel prices in the spotlight in battle over inflation

Good morning. First: apologies for the very late arrival of what is now yesterday’s newsletter.

To make it up to you, we have a very interesting exclusive regarding what seems like the first commercial contract won by a Rwandan company in Cabo Delgado since that country sent troops and police to help the counter-insurgency effort there.

Outside of that, the main story of yesterday, which will surely continue today, is a controversy over inflation figures. Renamo claims the government and the state statistics institute have used the introduction of a new calculating methodology to keep inflation in single digits — which, if true, has been so far unsuccessful.

As we argue below, Renamo is aiming its fire in the wrong place. The new methodology should be welcomed, despite the fact that there are persistent doubts over the independence of INE.

But the announcement at the end of the day yesterday that fuel prices will not rise, and will even in the case of cooking gas, fall, suggests inflation may be being manipulated, not by INE but by the energy regulator Arene. The decision not to raise prices comes amid persistent protests, from the smaller fuel retailers at least, that prices are unsustainably low — forcing fuel companies to effectively subsidise consumers and the government.

Therefore inflation may, for now at least, be being kept artificially low — politically useful as we head into the festive season. But for Renamo to argue against that tactic, they would have to argue in favour of higher prices: first for fuel, then everything else impacted by that knock-on effect. That would be political suicide; far safer to simply argue that the government is not owning up to the inflation that already exists, even if their arguments don’t make sense.

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The latest from Zitamar News:

Rwandan company wins $800k Mozambique LNG resettlement deal
A Rwandan company has won an $800,000 contract to upgrade a resettlement village for people forced to move by the Mozambique LNG project in Cabo Delgado

EDM looks into storage systems to accommodate increase in renewable energy
Mozambique's electricity utility has commissioned a study into battery and pumped hydro storage, as the country looks to roll out more renewable generation

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From the Zitamar Live Blog:

Mozambique's GDP grew 3.6% in the 12 months to the end of September 2022

Mozambique's energy regulator, Arene, yesterday announced a 7% cut in the retail price of cooking gas, and kept the price of all other fuels the same

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Also in the news:

• Another businessman kidnapped in Maputo

• Mozambique stats office accused of massaging inflation figures

• Egg trade war sees prices double in Nampula

• Maputo city cannot be a dumping ground for imported used cars, says mayor