Zitamar Daily Briefing, 5 September 2018


Welcome to Zitamar’s daily Mozambique briefing for 5 September, 2018.


  • Today: Start of a two-day national gem fair, organised by the Ministry of Mineral Resources and Energy (MIREME) and the National Geology Museum, taking place at the AFECC Gloria Hotel
  • Today: Laying of the first stone of Agility’s new warehouse facility on the Maputo Ring Road

The latest from Zitamar News:

Renamo candidate barred from Maputo mayoral race could appeal again
Renamo says there’s no further room for appeal, and will confirm a replacement candidate after Venancio Mondlane is ruled out by the Constitutional Council

Moza Banco to buy Banco Terra as Arise consolidates its Mozambican banks
The deal will see Arise take a roughly 30% stake in an enlarged Moza Banco which remains controlled by the Bank of Mozambique’s pension fund

The best of the rest:

  • China writes off more Mozambican debt (AIM)
  • Mozambique creditors should brace for a ‘sizable’ loss (Moody’s)
  • Government tourism stats are ‘conning investors’, industry says (@Verdade)
  • Agility lays first stone of new warehouse park in Marracuene (Press Release)
  • Send me some sugar – I am your neighbour (Notícias)

China writes off more Mozambican debt (AIM)
President Nyusi said in Beijing yesterday that the FOCAC conference had been “pretty positive” for Mozambique – with China agreeing to write off some of Mozambique’s interest-free debts, and promising around $20.4m worth of grants and rice.
Many voices have criticised FOCAC as being a forum for China to create client states in Africa – and Mozambique seems to be becoming a prime example of that. Exactly what China will require in return for its largesse remains to be seen, but its plans to build transport infrastructure from the interior of Gaza to the coast to export minerals being mined by a Chinese company, is surely a sign of things to come.

Mozambique creditors should brace for a ‘sizable’ loss (Moody’s)
“Whether the government reaches an agreement with private creditors on its debt restructuring or continues to default on its debt, the likely loss for private creditors under our definition remains sizable,” says Moody’s analyst Lucie Villa in the credit ratings agency’s latest report on the country. The country’s fiscal strength is “very low” due to high public debt and exposure to currency weakness, the report says, with public sector debt amounting to 112% of GDP at the end of 2017. The debts of state-owned enterprises (SOEs) remain largely unknown. Attempts to restructure the debt could extend beyond 2018, Moody’s said, warning that “a record of defaults also indicates the government’s low willingness to prioritise debt payments.”
Zitamar understands that some creditors are planning legal action against Credit Suisse and VTB, the original arrangers of the ProIndicus, EMATUM, and MAM loans, if a restructure is not agreed quickly. It remains somewhat puzzling why Mozambique’s leadership are so determined to save those banks’ skin – unless it’s because they also fear repercussions for the Mozambicans who also helped cook up the deals, which include not only the country’s last President but the current one too.

Government tourism stats are ‘conning investors’, industry says (@Verdade)
Government statistics wildly overestimate the number of tourists visiting Mozambique as the statistics institute counts every foreign arrival in the country as a tourist, an industry representative has said. João das Neves, head of tourism at private business association the CTA, told @Verdade that only around half a million tourists came in 2017, less than a third of the official figure, and that hotel occupancy rates were below 20%. He also questioned whether it was “opportune to continue to attract more investors to open more hotels”, saying: “We’re conning investors, we’re saying there’s a fertile market here when we know that there isn’t, and we’re increasing confusion here inside [the country].”
Neves is surely right, even if it’s in his and his colleagues’ interest to discourage foreign investors from adding to the sector’s over-capacity. Maputo is now seriously over-served with luxury hotels, as are cities like Nacala and Pemba which were expected to boom, and still haven’t. Mozambique remains a difficult destination for tourists, due to poor internal transport links, ongoing confusion over the availability of visas, and the language barrier.
There are also growing suspicions that the build-up of hotels in Maputo, Nacala and Nampula are used for money laundering, by declaring full occupancy and paying the respective fees and taxes.

Agility lays first stone of new warehouse park in Marracuene (Press Release)
Global logistics company Agility will today lay the foundation stone for a new warehouse park on a 29-hectare site on the Maputo Ring Road in Marracuene, Maputo Province. The park will provide 175,000m2 of “world class, efficient, warehousing” to local and international companies, with 32,000m2 to be made available in the first phase which will go operational in the second quarter of 2019.

Send me some sugar – I am your neighbour (Notícias)
Mozambique’s customs authorities in Cuchamano, Tete, seized 1.26 tonnes of brown sugar last month, being smuggled across the border from Zimbabwe. Along with the sugar, they seized two light vehicles, alcoholic drinks, nitric and sulfuric acid, bags of caustic soda, and other grocery items.
Local produced sugar has its price fixed by the industry which sometimes means sugar produced in neighbouring countries is cheaper. To discourage imports, the government created a surcharge on formal imports – leading Coca Cola and brewery company CDM to complain that they are forced pay the levy on imported refined sugar, while Mozambique doesn’t have the capacity to produce enough locally. That should change by the end of this month when a new refinery in Xinavane comes online.

Company announcements:

  • Syrah Resources announces the successful placement of 42.2 million new shares for around AUD94 million, 12.4% of the company’s undiluted share capital. The company’s interim half-year report shows losses of $8.3m, with their new Balama graphite operation producing 32k tonnes of graphite
  • Battery Minerals releases its half-yearly financial statements, with an operating loss of over $3m as they continue construction at their Montepuez Graphite Project

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