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IMF: “Marked Security Improvement” in Mozambique’s North

IMF: “Marked Security Improvement” in Mozambique’s North

There has been a “marked improvement” in the security situation in Mozambique’s gas-rich north recently, though the risk of a resurgence in violence by Islamist insurgents remains, the International Monetary Fund said on Tuesday.

“While there has been some marked improvement on the ground in recent months, there are still attacks, now more isolated, smaller,” IMF Mozambique mission chief Alvaro Piris Chavarri said in an online press conference.

“But they’re still there and there’s certainly scope for a resurgence,” he said.

The southern African state has been grappling with militants linked to Islamic State in Cabo Delgado province since 2017, delaying gas projects worth billions of dollars being developed by Western firms including France’s Total.

“In our baseline we have the Total project coming on stream in 2027 and the third project coming on stream in 2028,” Piris Chavarri said.

“We did run scenarios … with no LNG (liquefied natural gas production) and we concluded that while the situation was certainly less comfortable the debt would still be sustainable.”

Mozambique shipped its first gas exports from an offshore Eni and Exxon Mobil project earlier this month, the companies said.

The IMF also said on Tuesday that Mozambican authorities did not consent to the publication of a staff report that would have usually been released shortly after the IMF board approved a three-year $456 million Extended Credit Facility loan in May.

“The authorities requested to make some changes to that report … and the net result of that whole process was that the authorities did not consent to publication,” Piris Chavarri said, adding that he could not give the exact reason.

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“The authorities expressly don’t want something to be published in the way that it was put. I can say that I don’t think it’s an economically important issue. This is more an issue of internal process and differences of view.”

The IMF said on Monday it would disburse $59 million to Mozambique after its board finished the first review of the three-year loan. The staff report for this review will hopefully be published next week, Piris Chavarri said.

He added that Mozambique’s foreign exchange reserves have fallen in 2022 due to high oil prices pushing up imported fuel costs, but are expected to “recover a little towards the end of the year”.

Further Africa

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