NEWS

Mozambique’s economy expected to increase growth in 2020

Economic growth in Mozambique is expected to accelerate to 4.2% in 2020, after it was limited to 1.0% in 2019 due to the impact of cyclones Idai and Kenneth, which caused significant human and material damage in the north and centre of the country, according to the latest report on the country by the Economist Intelligence Unit (EIU).

The growth expected to be recorded this year will, according to the EIU, be due to work for the reconstruction of the damage caused by the two cyclones and the start of the investment in the exploration of natural gas deposits in the Rovuma basin, in the north of the country.

“This investment will allow the economy to grow at an average rate of 7.8% per year in the2021/2024 period,” the report said. The economic growth rates expected in the period are 6.5% in 2021 and 2022, 8.1% in 2023 and 9.9% in 2024.

The same document mentioned that the inflation rate is forecast t increase in the same period. This year the EIU expects inflation of 3.1%, increasing to 5.5% and 5.8% in 2021 and 2022, respectively, and then rising to 7.0% in 2023 and finally to 7.8% in 2024.

The balance of the General State Budget is expected to be negative in all the years considered, ranging between a minimum of minus 2.5% in 2024 and minus 5.9% in 2021, after a forecast of minus 4.7% this year. The same is expected of the balance of current account transactions, with maximum and minimum values of minus 40.2% in 2023 and minus 34.7% in 2024.

The EIU analysts also said that Mozambique is expected to have improved access to capital markets, from which it stepped away in 2016 due to the disclosure of the scandal of so-called hidden debts contracted by two public companies with the backing of the State. The return to the markets is due to the fact that the holders of Euro-bonds of Mozambican tuna company Ematum have agreed on a second restructuring process.

“However, Mozambique’s international reputation will not fully recover while the loans contracted by the ProIndicus and Mozambique Asset Management,” said the EIU, adding that the debate is still ongoing in the country’s parliament on whether the loans were legal or not, and if their payment should be the responsibility of taxpayers.

The document said that the fact the country has large natural gas reserves has allowed it to attract a large amount of foreign direct investment, particularly from Russia, China and the United States. (macauhub)

Rains delay prospecting in the Búzi block in Mozambique

The delay in organising equipment and the rainfall in central Mozambique have led to a delay in drilling the first onshore oil and gas test well in the Búzi block, in Sofala province, said the president of the National Oil Institute.

Carlos Zacarias told daily newspaper Notícias that drilling of the first well was initially scheduled for the end of last year, in an operation led by Indonesian company Buzi Hydrocarbons Pte Ltd, in partnership with the Mozambican state oil company ENH.

He gave assurances, however, that most of the equipment is already in Búzi, despite difficult transport conditions from Beira to Buzi, and that it was possible for drilling work to begin in the next few days.

The Búzi block is located in the Mozambique sedimentary basin, which is so far one of the least explored regions of the country in terms of oil and gas potential.

The only commercial exploration of natural gas in that basin is carried out by South Africa’s Sasol, in Pande and Temane, Inhambane province, which exports most of the gas it produces to South Africa.

The Búzi block has already been the target of surveys in the past, that culminated with the discovery of natural gas reserves in the 1960s, but the amount found was considered insufficient for viable commercial exploration.

Buzi Hydrocarbons Pte Ltd. is a subsidiary of the Energi Mega Persada Tbk PT of Indonesia and has a 75% stake in the Búzi block’s rights.  (macauhub)

Mozambique’s financial sector receives support from the United Kingdom

Financial Sector Deepening Moçambique (FSDMoç) will receive approximately 15 million pounds from the United Kingdom to begin a new phase of development of the financial sector in the country, according to an announcement made by the Secretary of State for International Development of the United Kingdom, Alok Sharma, on the sidelines of the UK-Africa Investment Summit, held in London.

Sharma said that the money will be made available through UK Aid and is part of a package of 320 million pounds for the beginning of a new phase of development of the financial sector in Africa.

The package includes additional funding for the nine other FSDs in Africa and for the creation of new FSDs in priority markets such as Ethiopia, Ghana, Sierra Leone and the West African Monetary Union, according to Mozambican news agency, AIM.

The aim is to cover the entire financial system, including, among others, savings and capital market groups, creating a greater alignment between the financial sector and the key sectors of the economy, thus responding to the basic needs of the population.

Sharma acknowledged the strong investment potential in Africa, including the fact that many African countries have outperformed average global economic growth in recent decades, which led the United Kingdom to become the main financial partner for companies in Africa.

The chief executive of FSDMoç, Esselina Macome, said that “the financing from UK Aid will allow us to address important issues in financial inclusion, solving challenges that require urgent intervention, such as climate change and the increasing needs for housing, energy and water in Mozambique.” (macauhub)

The United Kingdom provides 64 million pounds to support projects in Mozambique

The government of the United Kingdom has pledged to provide 64 million pounds to finance projects in Mozambique to support the agricultural sector, to increase access to electricity and the economic empowerment of women, according to a statement from the British High Commission in Mozambique.

The UK’s commitment to Mozambique, made during the UK-Africa Investment Summit, includes part of the 200 million pounds earmarked for Southern Africa to reduce trade barriers and increase investment.

The statement issued in Maputo said that 2 million pounds will be applied to the “significant expansion of activities related to the economic empowerment of women,” and added that similar actions would be carried out in other African countries.

To increase access to domestic and commercial electricity, through innovation and investment from the private sector, the United Kingdom announced another new programme for Mozambique, budgeted at approximately 22 million pounds.

Another 40 million pounds will be provided to Mozambique “to expand support for the agricultural sector over the next five years.”

“The funding will improve the involvement of the private sector in selected areas of agriculture to promote greater climate resistance, in addition to stimulating growth in this sector and the transformation of the economy of Mozambique,” said the statement from the British High Commission.

The UK-Africa Investment Summit brought together more than 1,000 people, including Heads of State and Ministers of African governments, chief executives and representatives of African and British companies, institutional investors, international organisations, financial institutions and civil society. (macauhub)

Forum Macau analyses report on its 15 years of activity

Forum Macau has analysed the report prepared by the Chinese Academy of Social Sciences on the activities of the institution in its 15 years of existence, according to information from the Support Office of the Permanent Secretariat of Forum Macau.

Present at the meeting, which was held in Macau on 16 and 17 January, were the general secretary of the Permanent Secretariat of Forum, Xu Yingzhen and all the members of the Permanent Secretariat, the diplomatic corps of the Portuguese-speaking countries in Beijing, the assessment experts of the parties involved, as well as the evaluation team of the Chinese Academy of Social Sciences.

The external evaluation was intended to provide an objective assessment of the development process in the 15 years since the establishment of Forum Macau and to put forward proposals for its future development.

Xu Yingzhen said in her speech that the assessment team had completed its investigation and research and the preparation of the first version of the report and that two assessment sessions had been held. During those sessions experts from nine countries and 10 parts of Forum Macau had presented various opinions and relevant proposals, thus improving the assessment report.

The secretary-general said she expected the assessment report to allow more people to find out about how Forum Macau has evolved over the years and about economic and trade relations between China and the Portuguese-speaking countries, as well as providing more experience and suggestions for the future development of the organisation.

This assessment session included a visit to the Exhibition Centre of Food Products from Portuguese-speaking Countries and the Complex of the Services Platform for Trade Cooperation between China and the Portuguese-speaking countries, with the aim of finding out more about the progress of setting up the platform’s premises in Macau. (macauhub)

Case of Mozambique’s hidden debts due to be taken to court in 2020

The main case of the so-called hidden debt scandal in Mozambique is expected to be judged later this year, as one of the steps towards discovering the truth, accountability of the perpetrators and recovering the value involved in the fraud, Mozambican newspaper Notícias reported.

The newspaper reported that officials are waiting for a decision from the Higher Court of Appeal, to which the 20 defendants have appealed the indictment issued by a judge from the 6th Section of the Court of the City of Maputo.

The Higher Court of Appeal is expected to pronounce on whether it upholds the decision or dismisses the complaint. If the decision is upheld the case will go to trial and if the appeal is accepted this will make way for the decision to be amended.

In the case, registered as 130/11/2019/PGR, the 20 co-defendants are accused of crimes of criminal conspiracy, blackmail, passive corruption, embezzlement and abuse of office or function, violation of management rules, falsification of documents, use of false documents, possession of prohibited weapons and money laundering, with the modifications resulting from the evidence collected.

The State-backed hidden debts were taken on by public enterprises ProIndicus (US$622 million) and Mozambique Asset Management (US$535 million) during the term of office of President Armando Guebuza.

This case also involved a later issue of Eurobonds in the initial sum of US$850 million by Mozambican tuna company Ematum, whose second restructuring was agreed between the creditors and the Government of Mozambique at the end of 2019. (macauhub)

Portuguese fund supports SMEs in Mozambique affected by natural disasters

Investimoz, a Portuguese fund to support investment in Mozambique, has set up two credit lines in the amount of €15 million for small and medium-sized enterprises (SMEs) in Mozambique that have been affected by natural disasters, at a ceremony held last Thursday in Maputo.

The protocol was signed by the Sofid – Sociedade Financeira de Apoio ao Desenvolvimento, the Investimoz management entity, and two banks in Mozambique, including Banco Comercial e de Investimentos (BCI), represented by the coordinator of the Executive Committee, José Furtado.

The BCI, the Cooperation and Language Institute, the Institute for the Promotion of Small and Medium-sized Enterprises (Ipeme) and the AMB in 2015 signed a contract to provide financial support, which established the terms and conditions of the financial support to be provided by the Portuguese Cooperation Enterprise Fund (Fecop) and which planned to lend to micro, small and medium-sized enterprises, associations and cooperatives in various sectors. (macauhub)

CPLP announces new funding to support Mozambique

The Community of Portuguese Speaking Countries (CPLP) will help the reconstruction of areas of Mozambique affected by cyclones in 2019 with funding of €888,600, with funding totalling €1.26 million, said the organisation in a statement.

The act was signed by the CPLP Executive Secretary, Ambassador Francisco Ribeiro Telles, and by the executive director of the Office of Post-Cyclone Reconstruction, Francisco Pereira, who will be responsible for the implementation of resources, applying them in activities according to the objectives and priorities laid down by the Mozambican authorities.

“Raising this significant support for Mozambique is also a clear expression of the strong ties of solidarity linking the Member States of the CPLP and the citizens of our countries, which were, in fact, determining factors in the creation of the CPLP and have been the essence of the organisation throughout its 23 years of existence,” the statement said.

Following the destruction caused by cyclone Idai in central and northern Mozambique, in March 2019, the CPLP met and created a financial package to support the affected populations, said the organisation.

In the statement, the CPLP noted the memorandum signed on 8 April, a “document which lays down the conditions under which the support is provided, i.e., it created a specific heading in the Special Fund of the CPLP, to which the contributions of Member States, associate observers and advisory observers are assigned.”

“In June of 2019 we signed the first financing protocol through which we provided financial aid of €370,000 for the recovery and reconstruction of infrastructure,” the statement said. (macauhub)

NEWS

Economic growth in Mozambique is expected to accelerate to 4.2% in 2020, after it was limited to 1.0% in 2019 due to the impact of cyclones Idai and Kenneth, which caused significant human and material damage in the north and centre of the country, according to the latest report on the country by the Economist Intelligence Unit (EIU).

The growth expected to be recorded this year will, according to the EIU, be due to work for the reconstruction of the damage caused by the two cyclones and the start of the investment in the exploration of natural gas deposits in the Rovuma basin, in the north of the country.

“This investment will allow the economy to grow at an average rate of 7.8% per year in the2021/2024 period,” the report said. The economic growth rates expected in the period are 6.5% in 2021 and 2022, 8.1% in 2023 and 9.9% in 2024.

The same document mentioned that the inflation rate is forecast t increase in the same period. This year the EIU expects inflation of 3.1%, increasing to 5.5% and 5.8% in 2021 and 2022, respectively, and then rising to 7.0% in 2023 and finally to 7.8% in 2024.

The balance of the General State Budget is expected to be negative in all the years considered, ranging between a minimum of minus 2.5% in 2024 and minus 5.9% in 2021, after a forecast of minus 4.7% this year. The same is expected of the balance of current account transactions, with maximum and minimum values of minus 40.2% in 2023 and minus 34.7% in 2024.

The EIU analysts also said that Mozambique is expected to have improved access to capital markets, from which it stepped away in 2016 due to the disclosure of the scandal of so-called hidden debts contracted by two public companies with the backing of the State. The return to the markets is due to the fact that the holders of Euro-bonds of Mozambican tuna company Ematum have agreed on a second restructuring process.

“However, Mozambique’s international reputation will not fully recover while the loans contracted by the ProIndicus and Mozambique Asset Management,” said the EIU, adding that the debate is still ongoing in the country’s parliament on whether the loans were legal or not, and if their payment should be the responsibility of taxpayers.

The document said that the fact the country has large natural gas reserves has allowed it to attract a large amount of foreign direct investment, particularly from Russia, China and the United States. (macauhub)

The delay in organising equipment and the rainfall in central Mozambique have led to a delay in drilling the first onshore oil and gas test well in the Búzi block, in Sofala province, said the president of the National Oil Institute.

Carlos Zacarias told daily newspaper Notícias that drilling of the first well was initially scheduled for the end of last year, in an operation led by Indonesian company Buzi Hydrocarbons Pte Ltd, in partnership with the Mozambican state oil company ENH.

He gave assurances, however, that most of the equipment is already in Búzi, despite difficult transport conditions from Beira to Buzi, and that it was possible for drilling work to begin in the next few days.

The Búzi block is located in the Mozambique sedimentary basin, which is so far one of the least explored regions of the country in terms of oil and gas potential.

The only commercial exploration of natural gas in that basin is carried out by South Africa’s Sasol, in Pande and Temane, Inhambane province, which exports most of the gas it produces to South Africa.

The Búzi block has already been the target of surveys in the past, that culminated with the discovery of natural gas reserves in the 1960s, but the amount found was considered insufficient for viable commercial exploration.

Buzi Hydrocarbons Pte Ltd. is a subsidiary of the Energi Mega Persada Tbk PT of Indonesia and has a 75% stake in the Búzi block’s rights.  (macauhub)

Financial Sector Deepening Moçambique (FSDMoç) will receive approximately 15 million pounds from the United Kingdom to begin a new phase of development of the financial sector in the country, according to an announcement made by the Secretary of State for International Development of the United Kingdom, Alok Sharma, on the sidelines of the UK-Africa Investment Summit, held in London.

Sharma said that the money will be made available through UK Aid and is part of a package of 320 million pounds for the beginning of a new phase of development of the financial sector in Africa.

The package includes additional funding for the nine other FSDs in Africa and for the creation of new FSDs in priority markets such as Ethiopia, Ghana, Sierra Leone and the West African Monetary Union, according to Mozambican news agency, AIM.

The aim is to cover the entire financial system, including, among others, savings and capital market groups, creating a greater alignment between the financial sector and the key sectors of the economy, thus responding to the basic needs of the population.

Sharma acknowledged the strong investment potential in Africa, including the fact that many African countries have outperformed average global economic growth in recent decades, which led the United Kingdom to become the main financial partner for companies in Africa.

The chief executive of FSDMoç, Esselina Macome, said that “the financing from UK Aid will allow us to address important issues in financial inclusion, solving challenges that require urgent intervention, such as climate change and the increasing needs for housing, energy and water in Mozambique.” (macauhub)

The government of the United Kingdom has pledged to provide 64 million pounds to finance projects in Mozambique to support the agricultural sector, to increase access to electricity and the economic empowerment of women, according to a statement from the British High Commission in Mozambique.

The UK’s commitment to Mozambique, made during the UK-Africa Investment Summit, includes part of the 200 million pounds earmarked for Southern Africa to reduce trade barriers and increase investment.

The statement issued in Maputo said that 2 million pounds will be applied to the “significant expansion of activities related to the economic empowerment of women,” and added that similar actions would be carried out in other African countries.

To increase access to domestic and commercial electricity, through innovation and investment from the private sector, the United Kingdom announced another new programme for Mozambique, budgeted at approximately 22 million pounds.

Another 40 million pounds will be provided to Mozambique “to expand support for the agricultural sector over the next five years.”

“The funding will improve the involvement of the private sector in selected areas of agriculture to promote greater climate resistance, in addition to stimulating growth in this sector and the transformation of the economy of Mozambique,” said the statement from the British High Commission.

The UK-Africa Investment Summit brought together more than 1,000 people, including Heads of State and Ministers of African governments, chief executives and representatives of African and British companies, institutional investors, international organisations, financial institutions and civil society. (macauhub)

Forum Macau has analysed the report prepared by the Chinese Academy of Social Sciences on the activities of the institution in its 15 years of existence, according to information from the Support Office of the Permanent Secretariat of Forum Macau.

Present at the meeting, which was held in Macau on 16 and 17 January, were the general secretary of the Permanent Secretariat of Forum, Xu Yingzhen and all the members of the Permanent Secretariat, the diplomatic corps of the Portuguese-speaking countries in Beijing, the assessment experts of the parties involved, as well as the evaluation team of the Chinese Academy of Social Sciences.

The external evaluation was intended to provide an objective assessment of the development process in the 15 years since the establishment of Forum Macau and to put forward proposals for its future development.

Xu Yingzhen said in her speech that the assessment team had completed its investigation and research and the preparation of the first version of the report and that two assessment sessions had been held. During those sessions experts from nine countries and 10 parts of Forum Macau had presented various opinions and relevant proposals, thus improving the assessment report.

The secretary-general said she expected the assessment report to allow more people to find out about how Forum Macau has evolved over the years and about economic and trade relations between China and the Portuguese-speaking countries, as well as providing more experience and suggestions for the future development of the organisation.

This assessment session included a visit to the Exhibition Centre of Food Products from Portuguese-speaking Countries and the Complex of the Services Platform for Trade Cooperation between China and the Portuguese-speaking countries, with the aim of finding out more about the progress of setting up the platform’s premises in Macau. (macauhub)

The main case of the so-called hidden debt scandal in Mozambique is expected to be judged later this year, as one of the steps towards discovering the truth, accountability of the perpetrators and recovering the value involved in the fraud, Mozambican newspaper Notícias reported.

The newspaper reported that officials are waiting for a decision from the Higher Court of Appeal, to which the 20 defendants have appealed the indictment issued by a judge from the 6th Section of the Court of the City of Maputo.

The Higher Court of Appeal is expected to pronounce on whether it upholds the decision or dismisses the complaint. If the decision is upheld the case will go to trial and if the appeal is accepted this will make way for the decision to be amended.

In the case, registered as 130/11/2019/PGR, the 20 co-defendants are accused of crimes of criminal conspiracy, blackmail, passive corruption, embezzlement and abuse of office or function, violation of management rules, falsification of documents, use of false documents, possession of prohibited weapons and money laundering, with the modifications resulting from the evidence collected.

The State-backed hidden debts were taken on by public enterprises ProIndicus (US$622 million) and Mozambique Asset Management (US$535 million) during the term of office of President Armando Guebuza.

This case also involved a later issue of Eurobonds in the initial sum of US$850 million by Mozambican tuna company Ematum, whose second restructuring was agreed between the creditors and the Government of Mozambique at the end of 2019. (macauhub)

Investimoz, a Portuguese fund to support investment in Mozambique, has set up two credit lines in the amount of €15 million for small and medium-sized enterprises (SMEs) in Mozambique that have been affected by natural disasters, at a ceremony held last Thursday in Maputo.

The protocol was signed by the Sofid – Sociedade Financeira de Apoio ao Desenvolvimento, the Investimoz management entity, and two banks in Mozambique, including Banco Comercial e de Investimentos (BCI), represented by the coordinator of the Executive Committee, José Furtado.

The BCI, the Cooperation and Language Institute, the Institute for the Promotion of Small and Medium-sized Enterprises (Ipeme) and the AMB in 2015 signed a contract to provide financial support, which established the terms and conditions of the financial support to be provided by the Portuguese Cooperation Enterprise Fund (Fecop) and which planned to lend to micro, small and medium-sized enterprises, associations and cooperatives in various sectors. (macauhub)

The Community of Portuguese Speaking Countries (CPLP) will help the reconstruction of areas of Mozambique affected by cyclones in 2019 with funding of €888,600, with funding totalling €1.26 million, said the organisation in a statement.

The act was signed by the CPLP Executive Secretary, Ambassador Francisco Ribeiro Telles, and by the executive director of the Office of Post-Cyclone Reconstruction, Francisco Pereira, who will be responsible for the implementation of resources, applying them in activities according to the objectives and priorities laid down by the Mozambican authorities.

“Raising this significant support for Mozambique is also a clear expression of the strong ties of solidarity linking the Member States of the CPLP and the citizens of our countries, which were, in fact, determining factors in the creation of the CPLP and have been the essence of the organisation throughout its 23 years of existence,” the statement said.

Following the destruction caused by cyclone Idai in central and northern Mozambique, in March 2019, the CPLP met and created a financial package to support the affected populations, said the organisation.

In the statement, the CPLP noted the memorandum signed on 8 April, a “document which lays down the conditions under which the support is provided, i.e., it created a specific heading in the Special Fund of the CPLP, to which the contributions of Member States, associate observers and advisory observers are assigned.”

“In June of 2019 we signed the first financing protocol through which we provided financial aid of €370,000 for the recovery and reconstruction of infrastructure,” the statement said. (macauhub)

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