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File - Palma, cabo Delgado. [File photo: João Relvas / Lusa]
The armed attacks in northern Mozambique have caused losses of US$209 million (€174.4 million) and led to the closure of 1,110 companies, the president of the Confederation of Economic Associations (CTA) told Lusa in an interview on Thursday.
Agostinho Vuma said that of that amount, US$100 million (€83.4 million) corresponded to losses in agricultural production, US$95 million (€79.2 million) in physical capital and US$14 million (€11.7 million) in cash flow “in the various value chains.
Vuma noted that the figures cover losses caused to the business community in all districts directly affected by the actions of armed groups in Cabo Delgado province during three and a half years of armed violence in the region, but did not include the impact of the 24 March attack on the town of Palma, about six kilometres from the industrial complex of the natural gas projects, on the Afungi peninsula.
Although the assessment is still underway, the official said, “the suspension of LNG (liquefied natural gas) project activities in Afungi could significantly affect a large number of companies and their links in the value chains.
Of the total number of companies that have been forced to close due to armed violence in Cabo Delgado province, 410 are from the districts directly affected by the attacks, namely Macomia, Muidumbe, Nangade, Quissanga, Mocímboa da Praia and Palma.
“The other 750 companies suffered indirect impacts due to their exposure in the various value chains, whose flow [of activity] was interrupted following the recent attack on Palma district,” the CTA president said.
Agostinho Vuma pointed out that 198,000 jobs had been lost, of which 56,000 in business units in the districts affected by the violence and 143,000 in the family farming sector, during the more than three years of conflict.
Although the effects of the suspension of the natural gas project by French multinational Total are still being assessed, Vuma said that “several companies” ran the risk of seeing their supply contracts fall through, creating a situation of uncertainty about “some products in transit,” particularly perishable goods.
“We advocate the need for urgent intervention to minimise the impact” of the attacks on Palma, the CTA president said.
He advocated a stimulus package for the recovery of Cabo Delgado’s business sector through financial and tax measures and the introduction of more flexible labour legislation.
He said that companies in Cabo Delgado needed loans with “friendly interest rates” and a “flexible labour system,” with a regulatory framework to ensure the hiring and reduction of labour that does not put the survival of businesses at risk.
Vuma said that the sustainability of the business sector linked to the natural gas megaprojects in Cabo Delgado depends on the restoration of peace in the province, calling on the government to find solutions to end the violence.
The armed violence in Cabo Delgado has been going on for three and a half years but gained a new escalation on 24 March when armed groups first attacked the village of Palma, which is about six kilometres from the multi-million dollar natural gas projects.
The incursion caused dozens of deaths and forced thousands of Palma residents to flee, worsening a humanitarian crisis that has already left more than 2,500 people dead, according to Lusa, and has affected around 700,000 displaced persons since the beginning of the conflict, according to United Nations data.
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