Mozambique: Insecurity stops more investment – Standard Bank

FILE - For illustration purposes only. [File photo: Lusa]

The chairman of Standard Bank Mozambique, Luís Teles, told Lusa that insecurity in Mozambique is the biggest impediment to a greater flow of investment in the country, which has bet on regaining credibility to relaunch the economy.

“There is confidence in the country, in the potential that Mozambique has for the future, but there are some challenges, namely security, which is fundamental and has to be overcome to allow these large investments,” the banker said in an interview with Lusa, on the sidelines of the conference on investments in Angola and Mozambique, held this week in Lisbon.

“We have seen international appetite from investors to go to Mozambique and continue to invest in the country,” said Luís Teles, noting, however, that the insecurity situation acts as an obstacle to a more robust flow of investments, particularly in the north of the country, where an armed insurgency has led Total, leader of the consortium that will explore one of the world’s largest gas reserves, to suspend work on gas exploration.

After the hidden debts scandal, known in 2016, Mozambique bet on a path to recover the international credibility that was devastated at the time. That path is now bearing fruit, not only in new investments but also in the return of international financial institutions that suspended budget support to the government.

“They have invested in international credibility, in governance, in transparency, the relationship with multilateral development institutions is fundamental, that is what Mozambique has been doing and has had good results,” Teles said, recalling that less developed countries have more limited financing options.

“We must not forget that African countries do not have the same financing options as European Union countries. They are different realities, and the relations with multilateral development institutions are critical because when there are crises or external shocks, they are the only option they have to support the growth of economies,” said the banker responsible for Standard Bank’s operations in Angola and Mozambique.

Asked about the reason for not operating in Portugal, Teles said that the group had offices in Brazil, the United States, the United Kingdom, Dubai and China and “considered that these financial markets were large enough to have contact with large international investors in Africa.” Thus it was not necessary to be in Portugal.

“Our international presence allows us to get in touch with these investors in these financial markets to raise capital to invest in Africa, and we complement this with other initiatives in countries where we are not present to encourage this interest and to get to know African economies better,” he explained.

Mozambique has three development projects approved to exploit natural gas reserves in the Rovuma basin, ranked among the largest in the world, off the coast of Cabo Delgado. Still, the province has been terrorised since 2017 by armed rebels, with some attacks claimed by the extremist group Islamic State.

The conflict has led to more than 3,100 deaths, according to the ACLED conflict registration project, and more than 817,000 displaced people, according to Mozambican authorities.

Since July last year, an offensive by government troops with the support of Rwanda, which was later joined by the Southern African Development Community (SADC), allowed for increased security, recovering several areas where there was rebel presence, including the town of Mocímboa da Praia, which had been occupied since August 2020.

Source: Lusa

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