In early 2017, Mozambique defaulted on its international debt obligations following revelations of public sector hidden loans, causing a fiscal crisis for the government. Consumers, meanwhile, have suffered from double digit inflation, a drought in rural areas, and a civil conflict in the country’s center. Multinationals have faced opaque regulations, skills shortages, high borrowing costs and difficulties accessing foreign currency. Furthermore, production at large new gas fields have been repeatedly delayed, which has meant economic growth has disappointed companies hoping for an increase in demand. However, positive signs have started emerging in recent months: the government has begun reforming indebted state-owned enterprises and it has made progress toward ending the country’s military conflict. There are also signs that it will begin reengaging with international creditors.
Matthew Kindinger, Sub-Saharan Africa Analyst at FSG, just returned from a research trip to Mozambique. Watch this video below for his insights on the outlook for the country in 2018.
Interested in staying on top of developments in SSA markets?