Mozambique: Central bank governor maintains economic forecast despite unrest

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Mozambique: Central bank governor maintains economic forecast despite unrest

4:16 CAT | 08 Nov 2024

Photo: O País

The governor of the Bank of Mozambique, Rogério Zandamela, said on Friday that the post-election turmoil in the country would not prompt it to alter its forecasts for economic growth, which he said already incorporated the possibility of such instability, as long as it “dissipates” before too long.

“For now, based on what we know today, how these risks are occurring and are materializing at this moment (…) in the understanding that this process, these risks, will dissipate in the short term, these prospects for our economy are positive. Today, for now. In the understanding that it will dissipate in a reasonable, short period of time”, said the governor, during the 49th consultative council of the central bank, which is taking place in Maputo.

“That is the message, because [the post-election risks] were already incorporated into our vision, into our perspectives. Today they are only just coming to fruition. They are not something new, and as such, we have to adjust our forecasts. It is a realization of what we were seeing,” said Zandamela.

The announcement by the National Electoral Commission (CNE) of Mozambique, on October 24, of the results of the October 9 elections, in which it attributed the victory to Daniel Chapo, supported by the Mozambique Liberation Front (Frelimo, the party in power since 1975) in the election for President of the Republic, with 70.67% of the votes, sparked popular protests, called by presidential candidate Venâncio Mondlane.

According to the CNE, Mondlane came in second place, with 20.32%, but he stated that he did not recognize the results, which still have to be validated and proclaimed by the Constitutional Council.

“Our projections have already incorporated these risks and uncertainties,” the governor of the Bank of Mozambique assured in today’s speech, at a time when economic activity has been heavily affected by post-election protests for over two weeks, with protests even spreading to the country’s main border crossing, Ressano Garcia, with South Africa, which has closed.

Following street protests that paralyzed the country on October 21, 24 and 25, Mondlane once again called on the population to hold a seven-day general strike, starting on October 31, with nationwide protests and a demonstration concentrated in Maputo previously called for Thursday, November 7, which degenerated into violent clashes in the center of the capital, with barricades and burning tires at various points.

Venâncio Mondlane, who does not recognize the announced results of the general elections of October 9 in Mozambique, announced on Thursday that the protests will continue until the electoral truth is reinstated.

In his speech this morning, the governor of the central bank stated that what is happening, including external risks such as the elections in the United States of America, represent “a materialization” of the institution’s forecasts: “This is not something new for us at the Bank of Mozambique”.

“We were supposed to prepare ourselves so that if things go wrong, we cannot be surprised. So we were conservative in our projections, in our perspectives, because we had in mind that things might not go [well], these risks are real. The signs were there and are now being realized”, stated Zandamela.

The governor also said that, in the Bank of Mozambique’s assessment, “economic activity is expected to continue to grow moderately, stimulated essentially by the normalization of the MIMO [interest rate], implementation of key projects” in the areas of energy, transport, and the extractive industry.

“In the same short and medium-term horizon, our perspectives continue to point to inflation remaining stable and low at around one digit”, Zandamela pointed out.

Source: Lusa