President sets off for China at a delicate point in time

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President sets off for China at a delicate point in time

1:20 CAT | 16 May 2016

Lusa (File photo) / President Filipe Nyusi

President Filipe Nyusi today begins his first official visit to China at a time when the undisclosed debt scandal and the falling raw materials continue to weaken Mozambique. The visit, which runs until May 21, will have “an essentially economic nature”, and it is expected that China will “strengthen the financial support granted” to the country, according to a note issued by Frelimo.

Mozambique’s reputation has been shaken by the recent revelation of undisclosed government-guaranteed loans worth US$1.4 billion dollars, causing severe reputational damage in financial markets and with international donors.

In addition, the decline in raw materials prices has led to a 35 percent depreciation of the local currency, with foreign exchange reserves falling by 25 percent in the last year.

During the visit, which runs until May 21, Nyusi will meet in Beijing with Chinese President Xi Jinping, and other Chinese officials. The Mozambican delegation also has visits to Shandong and Jiangsu provinces on the east coast of the country planned.

It is the second meeting between the two statesmen within six months, President Nyusi having met Xi in December 2015 at the Forum for China-Africa Cooperation in South Africa. The last official visit to Beijing by a Mozambican head of state was three years ago, when Armando Emilio Guebuza met a 62-year-old Xi Jinping who had ascended to power only a few months before.

China, which supported Frelimo in the fight against the Portuguese administration in Mozambique, was one of the first countries to establish diplomatic relations with the newly independent country in 1975.

Bilateral relations have gained momentum in recent years, particularly in the commercial and financial spheres, with China’s funding increasing by 160 percent since 2012, making it the country’s biggest bilateral creditor last year.

In mid-2015, a new loan of US$400 million for the construction of an electricity transmission line between the provinces of Zambezia and Nampula was announced, and although in 2015 bilateral trade decreased 33.95 percent year on year to US$2,393 million in the previous year it more than doubled, Chinese statistics indicate.

Last year, the official newspaper China Daily described Mozambique as “a diamond waiting to be polished with the help of its main Asian partner, China”, referring to the country as “a golden door to the south of the African continent” with “unlimited natural resources”, “an enviable location” and “new industries”.

Source: Lusa