Good afternoon. President Filipe Nyusi is currently on what is likely to be his last visit to China as president, inviting Chinese businesses to invest in Mozambique (see below). Not untypically for a politician, some of the projects he lists as ready for investment do not make a lot of sense. The project to build a new port at Macuse has already been awarded to private investors, although that deal is currently facing some obstacles, and the rehabilitation of the N1 highway is the subject of a promise of $800m of funding from the World Bank. Another project he mentioned, for a new port at Techobanine near Maputo, has no investor or funding, but is highly controversial owing to its environmental impact, and would face strong opposition.
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Actually, Mozambique is constantly short of money to repair or add to its infrastructure, so more finance would be welcome. But it is difficult to structure such projects in such a way that they would make for an attractive investment, in a country as poor as Mozambique. Taxes and user charges would struggle to cover the cost. Hence the repairs to the N1, as well as some of the cost of building new electricity transmission lines, are being funded by grants, not loans. But grant money only goes so far. China’s state-owned banks have not extended new loans to projects in Mozambique for a while, having decided that the state is at its borrowing limit.
