Good afternoon, and welcome back to Zitamar’s free Weekly newsletter, after a two-month hiatus.
Where to start?
The period has been characterised by two disastrous cyclones which hit central and then northern Mozambique. The immediate impact on Mozambicans living in Sofala and Cabo Delgado has been devastating, and the damage caused by the cyclones and subsequent flooding will be complex and enduring.
In both areas, harvests have been seriously damaged and will cause hunger over the coming year. In central Mozambique in particular, hundreds of thousands of people risk being disenfranchised in this October’s elections if logistical difficulties mean they can’t register to vote — increasing the possibility of subsequent complaints from opposition parties that their support base was unfairly repressed.
In Cabo Delgado, the cyclone and relief effort are inevitably coming into contact with the insurgency which has already been making people’s lives there a misery — and causing severe hunger — for over a year. How the insurgency and the fallout from Cyclone Kenneth might interact is the topic of this week’s Uncaught Tuna, our series analysing security challenges in Mozambique.
Anadarko restarted early works for its huge LNG project in Cabo Delgado this week, having frozen operations after one of its contractors was killed by insurgents in February. It also announced the date for its Final Investment Decision, when it and its partners will give a definitive green light to the project that will transform Mozambique’s economy — for better or worse.
But by the time the project comes on stream, Anadarko will almost certainly have been replaced by a new operator - French oil and gas giant Total, which has agreed to buy the project from Occidental Petroleum, which in turn has emerged victorious from a bidding war for Anadarko against the much bigger Chevron.
The cyclones and the fight for Anadarko have taken the headlines away from the ‘hidden debts’ saga, but attention will return to the $2 billion in dodgy loans in the coming weeks when a decision is made over the destination of imprisoned former finance minister Manuel Chang.
Decisions are also due on restructuring the sovereign Eurobond and the MAM loan — though Mozambique says it is disowning the government guarantee for the ProIndicus loan which it says was “criminally-obtained.” How it differs from the MAM guarantee, which the country says it will honour, is far from clear.
Mozambique’s fragile economy has taken a serious hit from cyclones Idai and Kenneth — not enough to push it into recession, but most observers see growth slowing to around 2% in 2019. Coal miner Vale’s Q1 results, which came out this week, show it took a hit from the extreme weather of the last few months. Airline Fastjet has also blamed the weather, in part, for its disappointing performance in Mozambique — but not everyone is convinced.
Before we go, a note to say that the Zitamar Live Blog - which has lately only been available on the Telegram app - is now back on our website, at https://zitamar.com/live-blog/. To get breaking news on your mobile device, though, we still recommend the Telegram channel.
Have a great weekend.