Last week saw protests escalate to a worrying level for the national economy, directly affecting megaprojects, which have a significant weight in the Gross Domestic Product. To better explain the risk that the new phase of the protests represents for the country, economist Egas Daniel explained that mega-projects account for a significant part of exports even though they contribute little to domestic revenue.
For the economist, although megaprojects contribute little to the development of local communities, the attack on megaprojects could slow down GDP growth, which would be catastrophic for economic growth.
‘Exports are the positive part of the BIP. With GDP growing at a lower rate, poverty levels in Mozambique are more likely to increase. If it’s already difficult to convert the current GDP into development, imagine if it’s growing at lower levels?’ he explained.
He warns that exports are concentrated in mega-projects, which are the basis for obtaining the foreign currency needed to cover imports.
‘The day that Mozal, Vulcan, Eni, Kenmare, Sasol and so many other companies don’t export because of the adverse political context, we will certainly have pressure on our exchange rate, which at the moment is artificial,’ he emphasised.
Mega-projects are responsible for more than 70 per cent of Mozambique’s exports. Examples include the MOZAL aluminium smelter, the Sasol petrochemical company and Kenmare, which exploits heavy sands.
On Friday, a group of demonstrators, mostly from the town of Topuito, in the district of Larde, Nampula province, invaded the shipyard of the Irish mining company Kenmare, which exploits heavy sands in the district of Moma.
The demonstrators prevented a plane carrying the company’s workers and executives from landing at the local aerodrome.
Reports from the scene say that the main access routes to the mine and the company’s camp were blocked by protesters supporting the presidential candidate, Venâncio Mondlane.
The protesters’ actions culminated in the vandalisation of the police station, according to images circulating on the internet.
The demonstrators forced the local administrator and the managing director of Kenmare to initial a compromise agreement to speed up the construction of the bridge over the Larde River, an infrastructure considered crucial for the local population.
Kenmare is one of the multinationals making huge profits in Mozambique, with figures showing that the company made 27.5 billion meticals from its operations in 2023 alone.
On Wednesday, a group of residents in the municipality of Matola decided to completely close the road leading to the Beleluane Industrial Park, where MOZAL, the aluminium producer responsible for a significant part of Mozambique’s total exports, is located.
The protesters decided to put up barricades and burn tyres on the road that joins National Road number 4 (EN4), the main road used by MOZAL to transport aluminium from the factory to the Port of Maputo for export markets.
The residents acted in this way, allegedly to express their anger at the behaviour of a plainclothes police officer who fatally shot a 13-year-old minor, who was standing on the side of the road with the demonstrators, under the bridge.
As a result, the company temporarily suspended the circulation of its aluminium trucks on that road, an embarrassing situation for the foundry, which has unavoidable commitments to its customers.
The Industrial Park also experienced a turbulent day, with companies based in the park and their workers forced to use alternative routes to get out and workers subjected to long walks.
Mozal is an aluminium smelting joint venture in the Beluluane Industrial Park and is part of the ‘megaprojects’ in Mozambique.
The enterprise produces aluminium exclusively for export markets, 578,000 tonnes of aluminium, and has already accounted for more than 50% of exports.
Also during the week, young protesters in Inhassoro district, Inhambane province, set up roadblocks on National Road Number 1 (EN1), which links the country from north to south. In Mangungumeta, in the Inhassoro district, demonstrators set fire to public and private infrastructure, including the ruling FRELIMO Circle Committee, the local chief’s house and the local headquarters and a police station.
The fury reached the South African multinational SASOL, which exploits gas. At this company, the protesters complained about the lack of social responsibility on the part of the company, which doesn’t offer them work opportunities at the site.
Part of the dissatisfaction expressed by the protesters relates to allegations of social injustice on the part of the multinational Sasol, which exploits natural gas in Pande and Temane.
According to the protesters, the profits generated by the exploitation do little or nothing to benefit the local communities, which remain mired in poverty.
As a result, the company is operating at half capacity due to fears of attacks by the protesters.
AIM
