Diversification of European markets may benefit Mozambique and Angola, says Fitch Solutions

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Diversification of European markets may benefit Mozambique and Angola, says Fitch Solutions

12:27 CAT | 28 Feb 2022

FILE PHOTO - For illustration purposes only. Coral Sul FLNG Project. [File photo: INP]

Consultancy Fitch Solutions considers that the impact of the war in Ukraine on Angola and Mozambique will be small in the short term, but points out that it could be beneficial in terms of the diversification of European energy markets.

“It is unlikely that there will be a substantial direct impact on Angola and Mozambique due to reduced trade flows,” said the director of the risk analysis department for sub-Saharan African countries at consultancy Fitch Solutions.

Speaking to Lusa, Jane Morley observed that “Angola imported products worth less than US$39,000 from Ukraine in 2019 and Mozambique imported less than US$19,000 in 2020”, stressing that, although in the short term there should not be any major impact , in the medium term the two Portuguese-speaking countries could benefit from any new European strategy regarding more diversified energy sources.

“There could, of course, be an impact in terms of gas supplies if Russia decides to cut supplies to Europe, but it is doubtful that any country has a sufficiently deployed gas infrastructure to maximise short-term benefits,” Morley said.

For the African director of the consultancy, owned by company in charge of financial rating agency Fitch Ratings, the scenario could change in the medium term, especially taking into account expected investments in the exploitation of natural gas in Mozambique and the effort that Angola is making to boost gas exploitation to compensate for the drop in oil production in recent years.

“In the medium term, both countries can benefit from the efforts that Europe is making to diversify supply chains,” Morley told Lusa.

Source: Lusa