Perhaps it has never been so difficult to write about a topic as it is at the moment. In a world that is fragmented by increasingly extreme opinions, it is now our turn to experience this phenomenon, which is echoed in various parts of the globe. When faced with this tension, there is always the risk of alienating opposing views or even sounding outdated.
The situation is delicate. We’re at the epicentre of this storm and, by the time it hits the newsstands, this publication may already have been overtaken by events. How can we project a discourse that is relevant, timeless and resilient to whatever events may occur in the coming weeks? Without a crystal ball, the challenge becomes almost Herculean, especially in a context where new precedents are set almost weekly.
So we can try to put aside the economic data that is still in waiting and focus on reflecting on what this moment could mean for the future, assuming from the outset that nothing will be the same as before. To do this, it is essential to use analytical tools such as VUCA – the acronym for Volatility, Uncertainty, Complexity and Ambiguity. It is with this framework that we can better orientate our analysis and take an objective look at the national panorama.
Volatility and Uncertainty: The Hallmarks of a Young Democracy
We were prepared, for the first time in our young democracy, to hold elections without the weight of armed parties, which offered a basis for stability and predictability. Proof of this was TotalEnergies CEO Patrick Pouyanne’s announcement on 2 October, a week before the elections, that he would visit Mozambican President at the end of the month to discuss the gas project’s plans with the newly elected president. However, just like for this multinational, the scenario quickly became unpredictable.
If even the 23rd largest company in the world in terms of revenue was caught off guard, what about the other companies that were looking forward to an optimistic 2025, fuelled by the expectation of a new government and the promise of structural reforms? All these forecasts, hitherto considered safe, will need to be recalibrated in order to adapt to the unexpected.
Complexity and Ambiguity: Growth as a Multisectoral Challenge
During the election campaign, the main candidates intensely addressed the complexity of Mozambique’s growth. This growth is conditioned by multiple factors, including infrastructure, the energy sector, robust agricultural policies, strategic external partnerships and a set of environmental challenges. These elements, far from being independent, are deeply interconnected and require assertive, multi-sectoral and, above all, collaborative solutions. We were already under pressure to improve in these respects; now this urgency is reinforced by the need for a more stable and cohesive path.
Short-term Impact: An Overemphasised Seasonality
For the short term, there is little hope of a particularly favourable summer and festive season for the retail, travel, hotel and tourism sectors. Even without concrete data at hand, the scenario already seems to foreshadow a wave of cancellations, and the losses accumulated so far could jeopardise annual bonuses and other benefits that are important for creating optimism among consumers.
The current instability, if not contained, could cause significant damage to the country’s reputation and competitiveness, tarnishing Mozambique’s image
Furthermore, it is to be expected that, just as Total will now opt for silence, strategic investments in sectors such as infrastructure, construction and energy will face pauses or postponements until the political landscape becomes clearer. In an even more pessimistic scenario, the fear of a possible devaluation of the metical could motivate a flight of capital, as investors choose to suspend new contributions or withdraw funds. This retraction, coupled with the logistical constraints that are already affecting the economy, could put even more pressure on inflation, making the scenario more difficult for companies and consumers.
The Medium Term: A delicate balance between ideals and pragmatism
In the medium term, the scenario becomes even more complex, because what we are facing is not just a clash of ideologies between left and right, between liberals and conservatives. Whatever solution is found to the current situation, it is almost certain that the initial election manifestos will have to be revised. Without a stable base, we can foresee a retraction of Foreign Direct Investment (FDI), especially towards neighbouring countries such as Namibia and Botswana, which are equally rich in resources, and have been able to attract capital due to their image of stability.
National investment could also suffer as our own entrepreneurs begin to lose confidence and optimism about the future. This scepticism could inevitably have an impact on domestic consumption, leading to a downturn in demand for goods and services and making growth forecasts even more difficult
A Long-Term View: The Risk of a Lost Decade
It’s hard to ignore the fact that the effects of this moment could resonate far beyond 2028 and 2029, the years of the next municipal and general elections. The current instability, if not contained, could cause significant damage to the country’s reputation and competitiveness, tarnishing Mozambique’s image as a safe investment destination. Furthermore, for neighbouring SADC countries, which depend on a prosperous and stable Mozambique, the current situation must be a source of growing concern.
An additional impact, which may be less visible but no less relevant, is the likely intensification of the ‘brain drain’. Moments of uncertainty tend to push talent out of borders in search of greater stability and better opportunities. Valuable human capital is thus lost, aggravating an economy that is already facing challenges in training its human resources and, in the long term, jeopardising the country’s potential for innovation and competitiveness.
The Demographic and Economic Reality: A Roadmap for 2034
The World Bank’s historical data is unequivocal on two fundamental points: firstly, there is a predictable drop in GDP growth in the first year of a new government; secondly, population growth continues to increase. Every year, there are a million more Mozambicans in need of food, education and employment. Projections suggest that by 2034 there will be around 46 million of us. With current growth, we run the risk of looking back on a lost decade. If we want to be bold and halve absolute poverty, we would need economic growth of close to 6 per cent a year. And even then, we would still have around 17 million people in poverty.
This is not just a problem for Mozambique. In the year 2024, incumbent leaders in various parts of the world were confronted by an increasingly demanding electorate: India, South Africa, Botswana, Japan, Portugal, France and, more recently, the USA, are just a few examples. The message is clear: there is nothing new in this world, and both at home and abroad, something needs to change. What is required is a system that is more austere, robust, predictable and attractive to investment, capable of creating the necessary conditions for the generation of development and collective wealth.
Final Reflection: A Call to Action
So what is left for us in the face of this challenging scenario? We have the responsibility not to allow history to define us by our difficulties, but by the way we respond to them. We urgently need to start a new cycle of confidence, in which predictability and stability become catalysts for a thriving and fairer economy. May we be able, with pragmatism and a long-term vision, to mould the foundations of a strong Mozambique, a country that, although marked by the uncertainty of this moment, finds in the diversity of its voices and the resilience of its people the key to a more promising future.
