Mozambique debt will not significantly affect growth – consultant

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Mozambique debt will not significantly affect growth – consultant

12:39 CAT | 12 Jul 2017

The Capital Economics consultancy says today that the sovereign debt crisis in Mozambique should neither halt foreign investment nor significantly affect the country’s economic growth, which should accelerate in the coming years.

“The economy of Mozambique is turning the page, and we expect that growth will accelerate in the coming years”, a report on African economies reads.

The Capital Economics investors’ document, which Lusa has access to, says: “Mozambique’s debts still need to be renegotiated, but we doubt that this will have a significant effect on the real economy”.

Recalling that, last year, growth “narrowed sharply” due to the effects of the hidden debt on the national currency and agricultural production, pushing inflation to 20 percent, analysts note that foreign investment, particularly by Italian oil company Eni, which has signed its final investment decision on a US$7 billion project, has held up.

Investments in the natural gas sector “will make economic growth accelerate in the coming years, with peak growth occurring as commercial production starts at the beginning of the next decade”.

Capital Economics predicts that Mozambique will grow 4.5 percent this year, five percent in 2018 and 5.5 percent in 2019, after the country last year registered its lowest growth for 15 years, at just 3.3 percent.

Source: Lusa