Mozambique insurgency: No need to panic just yet says economist

Investors need not panic about Mozambique’s insurgency problem just yet.

This is the view of an economist following a call by the nation’s government for South Africa to “make a difference” in Mozambique as part of its obligations heading the Southern African Development Community (SADC) and being its economic powerhouse.

Despite growing concerns that political violence could cost industries such as tourism, economics professor Bonke Dumisa argued it was too early and probably to the benefit of the insurgents to start sounding alarm bells just yet.

Officially known to have started around September 2017, the insurgency in northern Mozambique has mostly been characterised by foreign and local radicalised youths attacking state property and communities, killing many along the way and striking fear in the rural region.

The group also made the news for occupying key exploration sites owned by major multinationals in the natural gas industry.

In a two-day webinar held between South African and Mozambican trade ministers, the two governments discussing ways the two nations could optimise bilateral trade and other economic opportunities between them.

What seems to have been left off the table was the growing threat to economic endeavours in northern Mozambique posed by the insurgency in the region.

“The way in which political insurgency spreads is through fear and disorganising society in a country just by the mention of them [the insurgents]. They see that as propaganda to destabilise a country,” said Dumisa.

“I know people will say you cannot wish such things on a country and some things can’t be pushed under the carpet, but the reality is, where a country is able to contain and deal with this on its own, without increasing discussions it, is preferable.”

According to Dumisa, political and economic uncertainty affected investment in a country.

While it was possible to have a country with economic uncertainty with no political uncertainty, it is the latter that could do further damage to the former.

“Where you have political uncertainty, you will most certainly suffer economically.

“Remember Mozambique has been dealing with much political uncertainty ever since their independence, and which have far-reaching consequences that still affect them today,” Dumisa said.

South Africa is a major trading partner in Mozambique and in addition to being a major investor, counts Mozambique amongst its top five trading partners.

Mozambique’s newest trading opportunity, massive-scale Liquid Natural Gas (LNG) projects in Cabo Delgado province, has been the most at threat, according to reports in the country’s local media.

Insurgents have occupies several sites for these projects over the past year, although the government has maintained an argument that the insurgency was contained and the economy was not under threat as a result of it. Deputy Trade and Industry Minister Nomalungela Gina called for the two countries to work together to replicate the Mozambique Corridor model where the two countries can create development zones for the former Portuguese colony.

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