Zitamar Newsletter - issue 1
Welcome to Zitamar News, and thank you for signing up for our newsletter. The project is still in the early stages, and we will be taking a break for the Christmas holidays before launching for real in January. We hope you like what you've seen so far - and if you do, please forward this email on to anyone else who you think might appreciate it.
Wednesday was this week's big day, with President Nyusi making his first State of the Nation speech to parliament - only to be upstaged by opposition leader Afonso Dhlakama, who dialled in to a room full of journalists and party dignitaries in Maputo from his historic base in Satunjira - or at least, so he claimed.
Neither man, however, offered anything new. Nyusi said the state of the nation is "not satisfactory"; he repeated his availability to meet with Dhlakama; and blamed the economic crisis on external factors. Dhlakama's first public pronouncement in two months was in itself newsworthy, and his claim to be in Satunjira eye-catching - but his threat to take power in March was merely a new deadline for a broken promise he's been making for almost a year.
In the economic sphere, however, it was an eventful week. Later today, the IMF is expected to approve Mozambique's $286 million emergency credit facility after an austerity budget was approved on Monday by parliament, followed by a sharp hike in interest rates by the central bank. Reduced government borrowing and tighter monetary policy are understood to have been two of three conditions for the IMF to approve the facility. The third condition was the ending of special exchange regimes for favoured companies - which the central bank denied ever existed, when asked by Zitamar.
The big question that remains is how the $100 million twice-yearly repayments on the EMATUM loan have been treated in the budget. Has the government assumed it can reach a more advantageous agreement with creditors, as one of the bond investors has suggested? If it has, then failure to see that through to completion could jeopardise the whole budget. The chances of successfully renegotiating will have been slightly improved by the appointment of a new permanent secretary to the Ministry of Finance, but minister Adriano Maleiane is still making do without a deputy.
Even if a 10-year bullet restructure is agreed, Mozambique's success in repaying the bond in 2025 depends in large part on getting the Rovuma Basin gas projects off the ground on schedule - a big assumption given the current state of global LNG markets. Development of Anadarko's onshore gas liquefaction project - which will be far more significant for government revenues than Eni's floating LNG project - could be further complicated if civil society groups follow through on threatened legal action to halt the resettlement process. Anadarko will be helped, however, by the fact some civil society groups gave a tacit endorsement to their consultations with local communities this week. One observer of the consultation told Zitamar that the communities' priority now is an end to the interminable uncertainty and negotiations.
Finally, news of another foreign investor coming in to the fuel storage space was overshadowed by a tragic accident at the Matola fuel terminal, when an attempted fuel theft caused an inferno which has claimed the lives of at least 16 people at the time of writing this newsletter. It also destroyed the neighbouring grain terminal - the last thing Mozambique needs as it battles spiralling food inflation over the festive period, and - more seriously - hunger in northern Gaza due to a drought which has been going on for months.
We'll be back in the New Year with daily breaking news and analysis at www.zitamar.com. Please do spread the word. In the meantime, we wish a peaceful and happy festive season to all our readers.