Mozambique: Violence in the north is this year’s main political risk – Fitch Solutions

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Mozambique: Violence in the north is this year’s main political risk – Fitch Solutions

4:31 CAT | 13 Feb 2023

FILE - For illustration purposes only .[File photo: Lusa]

The consultancy Fitch Solutions considers Mozambique’s biggest political risk to be “continued insurgency activity” in the north of the country, which is postponing investment in the country’s huge gas reserves.

“At Fitch Solutions, we believe that the main political risk in Mozambique this year will come from continued insurgency activity, but we also believe that the recently approved legalization of local militias to fight insurgents could marginally increase counterinsurgency in the coming quarters,” analysts write.

In an analysis of Mozambique sent to investors, the consultancy, which is owned by financial rating agency Fitch Ratings, gives Mozambique a safety rating of 49.7 points out of 100, below the 57.7 average score for sub-Saharan Africa.

Despite the risk, Fitch Solutions considers that “the recent visit of the chairman and CEO of TotalEnergies, Patrick Pouyanné, to Cabo Delgado, together with the President of the Republic, Filipe Nyusi, will result in the restart of the project, after the suspension of operations in 2021”.

In support of this opinion, analysts point out that “the security situation has improved and the number of armed confrontations has decreased, following the involvement of troops from the Southern African Development Community (SADC) and Rwanda”, a country which supports Maputo and which has increased its contingent in the country from 1,000 in 2021 to 2,500 at the end of last year.

“Despite the improvements, attacks on civilians continue, and insurgent activity still persists in Palma, which will continue to threaten the development of Mozambique’s natural gas sector,” they add.

In the risk analysis, Fitch Solutions also notes that “the high number of internally displaced people (IDPs) in the north of the country will continue to be a risk to social stability in the coming quarters”, and recalls that the number of people in this precarious situation has risen from 622,000 in January 2021 to 870,000 in June last year.

The province of Cabo Delgado has been terrorized since 2017 by armed rebels, with some attacks claimed by the extremist group Islamic State.

The conflict has already caused more than 3,100 deaths, according to the ACLED conflict registration project, and more than 817,000 people have been displaced, according to the Mozambican authorities.

Since July, 2021, an offensive by government troops with the support of Rwanda, which was later joined by the Southern African Development Community (SADC), has made it possible to increase security, recovering several areas from rebel control, such as the town of Mocímboa da Praia, in rebel hands since August, 2020.

Source: Lusa