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Home Mozambique

Capital Economics forecast 3% growth in Mozambique, warns of investment risk

Capital Economics analysts note that "the desire to invest in Mozambique is in danger as insurgent attacks continue in the north of the country."

Rafael Carvalho by Rafael Carvalho
August 11, 2021
in Africa, Development, Economy, FA, FDI, Gas, Mozambique
Reading Time: 2 mins read
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Consultancy firm Capital Economics forecasts a 3% growth in the Mozambican economy this year, but warns of the investment risk due to the instability in the north of the country, in particular due to the suspension of the project to explore liquefied natural gas.

“In Mozambique, the ‘force majeure’ declaration on a large LNG project, following repeated attacks by insurgents, is adding new headwinds to an already slow recovery. Abandoning the project would seriously harm the country’s growth prospects and raise real concerns about public debt,” analysts write in a note.

In the document, analysts refer that “the desire to invest in Mozambique is in danger as insurgent attacks continue in the north of the country”.

In the document, Capital Economics also presents its forecasts, estimating for this year a 3.0% growth in Mozambique’s GDP, which should grow 4.0% in 2022 and 4.5% in 2023.

As for inflation, the consumer price index is expected to grow 5.5% this year, 5.8% the next and also 5.8% the next, according to forecasts by the London-based consultant.

Also read: Mozambique: Security in Cabo Delgado will dictate resumption of LNG developments

French oil company Total has a 26.5% share in the liquefied natural gas project under development in northern Mozambique, whose first production and export was scheduled for 2024, but which was delayed for at least a year following the declaration of ‘strength’ greater’ by the oil company.

On April 26, Total ended up making a declaration of ‘force majeure’, meaning that it was “unable to fulfill its obligations as a result of the severe deterioration of the security situation in Cabo Delgado, a matter that is completely beyond Total’s control”.

Out of the US$20B investment – the largest private investment in Africa – 12.5% ​​was expected to be channeled to local companies during the construction phase.

Related

Source: Lusa
Tags: Capital EconomicsCapital Economics forecast 3% growth in MozambiqueEconomic GrowthEconomyMozambiqueRafael Carvalhowarns of investment riskмозамбикموزمبيقモザンビーク莫桑比克
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Rafael Carvalho

Rafael Carvalho

Currently the Managing Editor of furtherafrica.com, I am passionate about writing, in its myriad forms. As I started writing and editing content about Africa, I came to the realisation that, just like our ancestors hailed from the motherland, so is the future, too, very much African-oriented. Join me then, as we learn more about a future that is welcoming, multicultural and full of promise. The future that is Africa.

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