Consultancy Fitch Solutions on Sunday, February 12, considered that Mozambique’s biggest political risk is the “continued insurgency activity” in the north of the country, which is putting off oil companies’ investments in the huge gas reserves.
“At Fitch Solutions, we believe the main political risk in Mozambique this year will come from continued insurgency activity, but we also believe that the recently approved legalisation of local militias to fight insurgents could marginally increase counter-insurgency in the coming quarters, the analysts write.
In an analysis note on Mozambique, sent to investors and to which Lusa had access, the analysts of this consultancy owned by the same owners of the Fitch Ratings agency wrote that Mozambique has a score of 49.7 points out of 100, below the average for sub-Saharan Africa, with 57.7, and in which the lower the score, the higher the risk,
Still, Fitch Solutions believes that “the recent visit of TotalEnergies’ president, Patrick Pouyanné, to Cabo Delgado, along with the President of the Republic, Filipe Nyusi, will result in the resumption of the project, after the suspension of operations in 2021.”
To support this opinion, the analysts point out that “the security situation has improved and the number of armed confrontations has fallen, following the involvement of troops from the Southern African Countries Community (SDAC) and Rwanda”, a country that supports Maputo and which increased the contingent from 1000 in 2021 to 2500 at the end of last year.
“Despite improvements, attacks on civilians continue and insurgent activity still persists in Palma, which will continue to threaten the development of Mozambique’s natural gas sector,” they add.
In the risk analysis, Fitch Solutions also notes that “the high number of internally displaced people in the north of the country will continue to be a risk to social stability in the coming quarters” and recalls that the number of people in this precarious situation rose from 622,000 in January 2021, to 870,000 in June last year.
Cabo Delgado has been experiencing a conflict since 2017 that is terrorising the populations. Groups of armed rebels have looted and massacred villages and towns a little throughout the province and a variety of attacks have been claimed by the ‘arm’ of the self-proclaimed Islamic State in that region.
The conflict has already caused more than 4000 deaths (data from The Armed Conflict Location & Event Data Project) and at least one million displaced people, according to an assessment made by the Mozambican authorities.
Since July 2022, a military offensive by Maputo, with support from Rwanda and later SADC, allowed for a climate of greater security in the region that had not been felt for years, and recovered localities that were controlled by the rebels, such as the town of Mocímboa da Praia, which had been occupied since 2020.
