Welcome to Zitamar’s daily Mozambique briefing for 6 August, 2018.
- Today: The process of formally submitting candidates for 10 October municipal elections begins
The latest from Zitamar News:
Zitamar News is back from holiday and will resume publishing as normal today.
The best of the rest:
- Mozambique bondholders eye gas revenues in restructure offer
- Frelimo turns to Comiche for Maputo mayor race
- Captured South African businessman located in Cabo Delgado
- IMF expects Mozambique to grow between 3.5% and 4% this year
Mozambique bondholders eye gas revenues in restructure offer (Bloomberg, Reuters, Wall Street Journal)
The so-called Global Group of Mozambique’s Bondholders has proposed that they get a proportion of the government’s gas revenues as part of a restructure of the $2 billion debts taken out by the Armando Guebuza administration in 2013-14. According to reports, the proposal would guarantee that the government keeps at least 97% of its revenues from gas. The government’s financial advisers, Lazard Frères told Bloomberg that “the ministry is currently analyzing the proposal with the support of its financial and legal advisers.”
What we know so far about this offer is in line with expectations of a gas-linked instrument – perhaps similar to the ‘GDP warrants’ used in a 2015 restructure of Ukraine’s sovereign debt. It means the creditors could see some upside if Mozambique’s gas developments go well – though the downside for Mozambique is that the total bill in 20 years’ time could be far more than the already scandalous $2bn. If Mozambique has a functioning political opposition by that time, they will have a big stick to hit Frelimo with.
The ruling party has selected former Maputo mayor Eneas Comiche to head its Maputo list in 10 October municipal elections – aiming to return him to the post which he held from 2004 to 2009. To run for Beira mayor, the party selected Augusta Maita, Frelimo’s current permanent secretary for Sofala Province. In Matola the party renominated current mayor Calisto Cossa. In Nampula, Amisse Cololo will get a second chance to win the mayorship that he lost to Mahamudo Amurane, who was assassinated in October 2017. O País has a list of more nominees here.
The choice of 79-year-old Comiche smacks of desperation – and will go down very poorly among the party’s younger generation which feels snubbed. In particular, Samora Machel Jr – the son of Mozambique’s first president – has been left in the cold, with suggestions of a personal vendetta by Filipe Nyusi to shut him out.
It is also an admission that the party was wrong to deselect Comiche in 2008 in favour of David Simango, whose mismanagement of the capital has left Frelimo vulnerable to Venancio Mondlane’s challenge as the Renamo candidate.
Captured South African businessman located in Cabo Delgado (Lusa)
Andre Hanekom, a South African businessman based in Palma who was shot and snatched from a Palma hotel by masked, armed men last week, was located last Thursday and is receiving hospital treatment, his wife said.
It is still unclear who took Hanekom and why, but there are persistent rumors that the attack was an arrest by authorities – and that the men weren’t masked, but in uniform – on suspicion that Hanekom has been supporting insurgents in Cabo Delgado. Sources, however, say Hanekom had some strained business relationships in Palma, which may have been the motivation for the violence.
IMF expects Mozambique to grow between 3.5% and 4% this year (MediaFax, Jornal Domingo)
The International Monetary Fund (IMF) said Friday that Mozambique’s GDP will likely grow between 3.5% and 4% this year, accelerating to between 4% and 4.5% in 2019. The announcement came at IMF Africa Division Chief Ricardo Velloso’s press conference in Maputo on Friday, following his working visit to Mozambique. The Fund recommended slowing salary hikes for high earners in government to 2% and reducing the VAT from 17% to 16% to enlarge the tax base.
© 2018, Alexandre Nhampossa. All rights reserved.