Coronavirus exposes Mozambique economy’s reliance on Chinese trade

Mozambican importers and exporters alike are feeling the impact of the slump in global trade – and particularly trade with China – as a result of the Corona pandemic, leading to calls for the country to use the crisis as an opportunity to become more self-sufficient.

Construction materials, clothing, rice and other products imported from China may soon be in short supply in Mozambique, the president of the Industrial Association of Mozambique, Rogério Samo Gudo, told Zitamar News, as a result of the coronavirus.

The crisis has highlighted how dependent Mozambique is on imports, Samo Gudo said. “We have to look at the situation as an opportunity to rethink the national production. It doesn’t make sense for the Mozambican people to go hungry, while they have the capacity to produce… these are consequences of depending on one or two markets”.

Mozambican businesses that rely on Chinese customers are also struggling. In the northern province of Nampula, local loggers are making losses because many of their Chinese buyers have stopped operating, and those that are still working are forcing prices down.

“We used to cut the wood in the bush and transport it to the shipyard gate at the price of MZN 200,000 per truck,” Domingos Caetano, president of the Nampula Loggers Association, told Zitamar. “But now they pay MZN 185,000 or less,” he said, meaning “the business is not viable”.

Chinese-owned Hotel Sogecoa, in central Maputo, is empty, marketing manager Celsio Damisson told Zitamar News.

“Since the outbreak, the number of guests started to decrease” said Damisson. “In November, the hotel occupancy was at 80%, of the 100 rooms, but now we’re practically at zero.”

The hotel restaurant, which used to average 50 customers per day for lunch, now typically only has two covers.

The hotel, which caters mainly to visitors from China, or Chinese citizens living in Mozambique, has also started turning away guests from China, or from countries with confirmed coronavirus cases, Damisson said.

The hotel is now trying to diversify its client base, but is struggling as it has “already built an image around being Chinese,” Damisson told Zitamar — adding that if the situation continues, the hotel will have to fire “a good part” of its employees.

The Sri Lankan-owned slot machine arcade “Casino Marina” in Maputo is also empty, since it catered mainly to Chinese businessmen, a worker told Zitamar — adding that many Chinese citizens returned to their country for the New Year, which coincided with the start of the outbreak, and have not returned to Mozambique.

The situation is also affecting Mozambican state-owned airline LAM, which is starting to make flight cancellations and send passengers on partner airlines due to the significant reduction in traffic, the company said on Wednesday.