Zitamar Daily Briefing, 1 May


Welcome to Zitamar’s daily Mozambique briefing for 30 April – 1 May, 2020

Zitamar Daily Briefing May 1

Due to a technical failure, yesterday’s Daily Briefing failed to deliver — so it is combined with today’s top stories here. We apologise for the lack of a Daily yesterday.


  • Today: Public holiday for International Labour Day

The latest from Zitamar News:

EU denies Mozambique’s claim of $54m budget support
The European Union has denied a claim made by Mozambique’s finance minister to the IMF that the country is in line for $54 million in budget support

Mozambique government: Xitaxi massacre was insurgents’ revenge for ‘heavy losses’
The government says insurgents carried out the Xitaxi massacre as revenge for ‘heavy losses’ inflicted by Mozambique’s state forces – although most of those losses happened after the massacre

Vale coal sales plunge in coronavirus crisis, leading it to Q1 loss of $158m
Vale’s coal business in Mozambique made a heavy loss in the first quarter of this year, as global demand for the commodity fell sharply

From the Zitamar Live Blog:

Follow on Telegram or on our website

Nyusi to meet Zimbabwean president
The two leaders are to discuss bilateral cooperation and security in the region

State of emergency extended by 30 days
President Nyusi said that compliance needed to improve and that testing would be increased at places where people gathered

Covid-19 cases steady for fourth day
The count remains at 76 cases, after 432 tests came back negative over the last four days

The best of the rest:

  • Military and mercenaries foil insurgent advance north of Pemba (Carta de Moçambique)
  • Supermarket magnate kidnapped in Matola (Notícias, DeshGujarat)
  • Ten houses burned in Nampula (TVM)
  • Mozambique debt remains unsustainable, but LNG should save it in longer term (IMF)
  • Farmers abandon cotton production in Manica (AIM)

Military and mercenaries foil insurgent advance north of Pemba (Carta de Moçambique)
The Mozambican Security and Defence Forces (FDS, a collective term for the police and military) fought off a terrorist offensive on Tuesday in the village of Nacoba, Metuge district, just 95km from Pemba. The attackers burned a Quirimbas National Park camp and slaughtered 15 livestock — cattle and goats — but the village had already been deserted due to rumours of an imminent attack. The terrorists got as far as Messanja and Ntessa, before FDS troops with DAG air support curtailed the operation at around 3pm.
Controlling Metuge would be a particularly ambitious goal for the insurgency, both because of its proximity to Pemba and the lack of nearby tree cover. Metuge is just 15 kilometers from Pemba airport by helicopter, making quick air response quite easy for DAG gunships so long as they remain on the government’s payroll. Once the helicopters arrive, there is relatively little room for insurgents to hide in the flatter, more open environs of Metuge, compared to the more rugged areas of Quissanga and points north.

Supermarket magnate kidnapped in Matola (Notícias, DeshGujarat)
Businessman Rizwan Adatia, chairman of Mozambique-based conglomerate Cogef Group and founder of the Rizwan Adatia Foundation (RAF), was kidnapped yesterday leaving his Recheio supermarket in Matola at around 4pm. His car was found abandoned, and it is believed he was stopped in his car by his attackers. DeshGujarat reported that Adatia was driving his own car, as opposed to being driven, for the purposes of social distancing.

Ten houses burned in Nampula (TVM)
Ten houses were set on fire around dawn yesterday in the Caripira region in Monapo district, Nampula province. Several people were injured. The local population said they had no idea of the perpetrators and even less of the motivations, and the police have not yet commented.
The modus operandi is the same as that of the insurgents in Cabo Delgado province at the beginning of the insurgency, which has fed speculation on social networks associating them with the fire. It has also been suggested that the fire started by accident and spread to other houses.

Mozambique debt remains unsustainable, but LNG should save it in longer term (IMF)
The $309 million Rapid Credit Facility (RCF) that Mozambique is receiving from the IMF is 100% of its  quota with the Fund, supporting documents published last night reveal. The IMF says Mozambique’s indebtedness remains unsustainable, in an updated but mostly unchanged Debt Sustainability Assessment (DSA), which concludes that the country’s capacity to repay the RCF — after a grace period that should bridge the period between now and the start of LNG revenues coming to government — is adequate “but subject to significant uncertainties and downside risks,” including delays to the LNG projects, in particular Total’s. The IMF does not expect ExxonMobil’s Rovuma LNG project to start producing until 2026 in the light of the company’s decision to delay a final investment decision (FID). Talks on an Extended Credit Facility (ECF) are expected to take place later in the year, the IMF said, when the current crisis has stabilized — saying: “The authorities have reiterated their strong interest in such discussions.”
The IMF essentially admits that it is not sure that Mozambique will be able to repay the RCF, given uncertainty over the LNG projects — but it is prepared to lend it the money all the same.

Farmers abandon cotton production in Manica (AIM)
At least 1,000 producers have abandoned cotton production in Macossa district of Manica province in the 2019-20 agricultural year, due to factors such as seeds with low germination power, a lack of technical assistance and the low market price of cotton. The China Africa Cotton company had provided seeds and technical assistance for many years, but has recently stopped cooperating, leading producers to reject cotton in favour of sesame, another, more profitable, cash crop, according to a district official.
Cotton in Cabo Delgado is also in serious trouble, as Plexus Cotton is having financial difficulties — and failed to pay producers for last season’s harvest, leading many of them to quit growing cotton.Pigeon peas, which are mainly exported to India where they are a staple food, are also an alternative to cotton, which farmers have in the past found profitabled. However, the boom and bust cycle of the crop has also led to losses for farmers

Company Announcements

  • Lithium Consolidated published its quarterly cash flow report, reporting negative net cash from operations of A$311m ($203m) and total cash and cash equivalents of A$465m. In its separate quarterly report, the company said it had handed back several mining tenements in Mozambique after a “reconnaissance and confirmation mapping” exercise
  • Woodbois published its annual results for 2019, reporting gross profits of $2.8m and negative EBITDA of $1.9m for the year, up year-on-year from $2.1m and -$3.8m. Revenue rose 45% to $19.5m

© 2020, Alexandre Nhampossa. All rights reserved.


Leave A Reply