Zitamar Daily Briefing, 27 July 2018

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Welcome to Zitamar’s daily Mozambique briefing for 27 July, 2018.

Agenda

  • Today: President Nyusi participates in the 10th BRICS Summit in Johannesburg, South Africa
  • Today: Workshop about new perspectives on the business environment, organized by the Ministry of Industry and Commerce
  • Today: Renamo names its candidates for mayor of Matola, Boane, Manhiça, and Namaacha
  • Today: A total lunar eclipse can be seen across Mozambique from 19:00 on Friday to 02:13 on Saturday

The latest from Zitamar News:

EU agrees to redirect €290m frozen budget support to Mozambique sectors
The EU will redirect around €290m that it froze following the ‘hidden debt’ revelations towards specific sector support

The best of the rest:

  • Mozal paid no income tax on $90 million profit in 2017
  • Mozambique to receive $474 million from the World Bank this year
  • Ncondezi submits updated tariff for coal-fired power project
  • MDM accuses Renamo of buying off its members
  • Nyusi at BRICS summit to lobby South Africa over gas

Mozal paid no income tax on $90 million profit in 2017 (@Verdade)
South African aluminum manufacturer Mozal once again paid zero corporate income tax in Mozambique in 2017, despite bringing in $90 million in profits. Mozal is exempt from the VAT, and, because its Mozambique facilities are in an area designed to encourage industrial development, it is also exempt from the industrial tax, the urban property tax, among others.
Mozal, like Sasol, frequently attracts flak for the attractive terms it achieved as being one of Mozambique’s first major investment projects after the peace accord in 1992. But a deal is a deal, and the company can’t be blamed for taking advantage of the tax breaks it negotiated.

Mozambique to receive $474 million from the World Bank this year (O País)
The World Bank Group’s International Bank for Reconstruction and Development has pledged to disburse $474 million to in project aid to Mozambique this year. The 2018 package is four times the size of the 2017 disbursement.
Though the World Bank funds are for project support, rather than direct budget support, the large increase in aid when the Mozambican government has made no moves to answer questions about the hidden debts must have the IMF—the international body most committed to holding a strong line against financial malfeasance—pulling its hair out. The increase in World Bank funding plus the European Union’s recent unfreezing of its budget support (now converted to project support) suggests that the Nyusi government’s waiting game over action on the debts has paid off.

Ncondezi submits updated tariff for coal-fired power project (Mining Weekly)
The coal-mine-to-power project has, as promised, submitted a new, lower tariff to Mozambique’s electricity company EDM, in the hope of securing a long-term power purchase agreement.
As noted recently by Zitamar News, coal-fired power in Mozambique faces a number of challenges – and building a coal mine specifically to fuel a power plant would seem to make very little sense indeed.

MDM accuses Renamo of buying off its members (DW)
The Movimento Democrático de Moçambique (MDM) organization in Inhambane province accused Renamo of “dating under the table”, enticing MDM members to change allegiances in exchange for money and high position in the party. MDM’s local spokesman, José Siniquinha, says that Renamo is weak because of a lack of quality staff, which is why it is going to MDM to strengthen the party.
Renamo MP António Muchanga responded to the comments by saying that those leaving MDM for Renamo are only returning home after being deceived by MDM.

Nyusi at BRICS summit to lobby South Africa over gas (Marcelo Mosse)
President Filipe Nyusi arrived in South Africa yesterday to attend the 10th BRICS summit. No details were released regarding his agenda, but investigative journalist Marcelo Mosse says on Facebook that Nyusi will speak with South African energy minister Jeff Radebe about Mozambique’s disillusionment with Sasol, in the hope that he will intervene – taking into account South Africa’s long-term interest in Mozambique’s Rovuma Basin gas.

© 2018, Alexandre Nhampossa. All rights reserved.

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