The Confederation of Economic Associations says that in the current geopolitical climate, there is an increased risk of technological fragmentation and indirect restrictions on external financing.
The Confederation of Economic Associations (CTA) of Mozambique predicts volatility in raw material prices, including strategic minerals and fuels, and uncertainty about the future of the African Growth and Opportunity Act (AGOA) as a result of external pressures exacerbated by the global trade war.
With regard to price volatility, according to a note, the Mozambican private sector is concerned that energy commodities move in unison, which means that if commodity prices become volatile, this will affect the price of gas and LNG, which Mozambique exports, as well as coal.
‘The global trade war is focused on the US and China, with tariffs of up to 145% imposed by the US and Chinese retaliation of up to 125%, which is contributing to a slowdown in world trade and pressure on import prices,’ reads the note accessed by Forbes África Lusófona.
According to the CTA, in the current geopolitical context, the risk of technological fragmentation and indirect restrictions on external financing has increased, with the closure of USAID and the Millennium Challenge Account programme by the administration of US President Donald Trump being particularly noteworthy.
‘The direct impacts on Mozambique there is the end of an average flow of US$600 million in aid through USAID programmes in the country, and the suspension of the Millennium Challenge Account-Mozambique (MCA), which provided for a US$500 million package for investments in rural infrastructure, agricultural value chains and institutional reforms, particularly in the province of Zambezia,’ says the CTA.
The agency believes that the failure to provide this support will directly affect the implementation of structural projects that would benefit thousands of small and medium-sized Mozambican enterprises, particularly in the areas of transport, irrigation and access to energy.
Forbes África Lusófona.
