Political tension is affecting investment in Mozambique – analyst

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Political tension is affecting investment in Mozambique – analyst

12:47 CAT | 01 Mar 2016

Mozambique has recently been facing restrictions preventing its economy from growing at the pace of the last three or four years, one of which is the slowdown in foreign direct investment, which has been supporting this pace of growth substantially.

Mozambican analyst Tomás Rondinho says that this slowdown is due to the fact that investors have lost confidence in the country, “because the political-military scenario is not favourable, with fear and distrust are endemic in Mozambique”.

Rondinho says he knows of many projects that have not gone forward because of the conflict, while acknowledging that there are additional external factors such as falling international commodity prices.

According to Rondinho, the roll-out of US company Anadarko’s liquefied natural gas project in northern Mozambique is being affected by the adverse economic environment.

Some economists say that if the combination of political conflict and an adverse global economic environment continue for long, Mozambique may experience an economic downturn, but for Rondinho a recessionary scenario is already noticeable.

Economist Ragendra de Sousa has also warned that Mozambique should reduce its debt burden, and where borrowing is needed for infrastructure projects, the country should opt for “debt through concession” credit.

Source: Voa Portugues