Good afternoon. The Mozambican government is preparing to introduce a new law which would regulate the use of “local content” in major projects in sectors like energy and mining. The aim is to increase the amount of contracts given to Mozambican companies by (typically) foreign investors running the projects. But what is the ultimate goal? Is it to boost the Mozambican economy and support local production and skilled jobs in Mozambique? Or is it to line the pockets of a few people with good connections to the ruling Frelimo party?
Locally content is an inflammatory political issue. Media commentators are quick to complain that Mozambicans are not getting enough benefits from these big projects, and that too often, the contracts are awarded to foreign companies. (Witness the controversy when it emerged that a Rwandan-controlled security company was in charge of security at TotalEnergies’ gas project in Cabo Delgado province.)
The full Daily Briefing continues below for Pro subscribers. Subscribers to the Zitamar News tier can read the top half, including the full leader article, here.
The Mozambican economy is dominated by elites in or connected to Frelimo. Many companies owe their existence and their success in getting public sector contracts to those connections. But when connections are your only valuable asset, there is no incentive to invest in skills or capacity. It is easier to outsource them and just add your commission fee on top.
