The Confederation of Economic Associations of Mozambique (CTA), remarked yesterday that the retaking of areas occupied by armed groups in Cabo Delgado opens “positive prospects” for the country’s companies and economy, echoing the words of the executive director of Japanese multinational Mitsui, who also expressed “optimism” in relation to the Area 1 natural gas project in northern Mozambique, hailing the progress made thus far in restoring security in the region.
“The positive perspectives of the private sector are based, essentially, on the return of business activities and projects now suspended due to the terrorist attacks, with emphasis on the Total Energy project”, refers CTA, in a statement.
The organization assumes that the victory over the armed groups in the province of Cabo Delgado will result in the resumption of the gas project of the French multinational TotalEnergies – the largest private investment in Africa – and in the reactivation of contracts with Mozambican companies that provide goods and services to the enterprise.
In a similarly positive tone, Mitsui’s Motoyasu Nozaki, during a meeting with minister of Mineral Resources and Energy, Max Tonela, said he was “very encouraged by the latest developments in Cabo Delgado”.
Lasting and sustainable peace is fundamental to a favourable environment for investment and socio-economic development in the province, continued Mitsui’s executive director.
Motoyasu Nozaki stated that the restoration of security must also benefit the communities residing in the areas of implementation of natural gas projects and the populations of Cabo Delgado, in general.
The Japanese company is a strategic partner of TotalEnergies in the Area 1 LNG exploration project in the Rovuma basin.
From the private sectors’ perspective, CTA points out that the resumption of the project could be a relief for small and medium-sized companies that provided goods and services to the oil venture.
“In the same way, this situation may provide social stability resulting from the return of the population who are refugees, mitigating, in this way, the humanitarian drama that is going on,” reads part of CTA’s statement.
Due to the suspension of TotalEnergies activities, several companies were significantly affected, especially those that were directly or indirectly involved in this project.
According to CTA, who cites a recent study it carried out on the macroeconomic consequences of the latest force majeure which brought about the project’s suspension, around 288 companies had to forego their activities in the districts of Mocímboa da Praia and Palma, affecting a total of 23,000 jobs. The survey also found that the project’s shutdown resulted in the suspension of the supply of goods worth US$35 million.
The force majeure suspending Mozambique LNG operations was called when armed attacks took place in the town of Palma on March 24, near the development’s site, which is to this day the largest private investment in Africa.
The fight against armed groups in Cabo Delgado saw significant advances following the reconquest, on Sunday, of the village of Mocímboa da Praia, one of the largest ones in the province, in a joint operation between the government forces of Mozambique and Rwanda.
On Tuesday, the commander of the Mozambican army, Cristóvão Chume, said that the joint force Mozambique and Rwanda would be deployed in “cleaning missions” throughout the district of Mocímboa da Praia.
“Right now, defense missions are underway throughout the Mocímboa da Praia area,” Chume said, speaking to the media on Tuesday from the coastal district headquarters in northern Cabo Delgado.
The coastal village of Mocímboa da Praia, considered by many as the “base” of the insurgents and where the attacks began in October 2017, is located 70 kilometers south of the construction area of the natural gas exploration project conducted by several international oil companies – including Mitsui.
The village had been invaded and occupied by rebels on March 23 of last year, in an action later claimed by the `jihadi` group Islamic State, and was, on June 27 and 28 of that year, the scene of long clashes between government forces and insurgent groups, which led to the flight of a considerable part of the population.
The retaking of the village by the joint forces of Mozambique and Rwanda took place around 11:00 am on Sunday, after weeks of military operations, with Rwandan forces estimating casualties of at least 70 people among the insurgents from Kigali.