Impact will lead Mozambique

Mozambican philosopher and rector of the University of Mozambique (UDM) Severino Ngoenha predicts that the impact of Covid-19 will weaken the country’s economy to the point that the government focuses only on defence and the payment of foreign debt.“The essential parts of our economy will be external debt and the military effort,” Severino Ngoenha says in an interview with Lusa.  The Covid-19 pandemic finds Mozambique facing high public debt service payments and two theatres of armed violence, one in the central region and another in the north, says Ngoenha. The postponement of the final investment decision of one of the two gas exploration consortia in the Rovuma basin, northern Mozambique, following the impact of the pandemic, overshadows the country’s economic prospects, he adds.

North American oil company ExxonMobil officially announced at the beginning of the month the delay, until further notice, of the final investment decision for its natural gas mega-project in Area 4 in Northern Mozambique, where Portuguese company Galp is one of the partners The mega-project is expected to produce 15 million tonnes per year (mtpy) of LNG, along with 12.88 mtpy from the Area 1 project led by Total, planned to start in 2024, a deadline Total aims to keep to, despite the pandemic. “We are an economy that lives on what others give. If the world’s economies panic or are in great difficulty, we will be more weakened,” Ngoenha says. The deterioration of the economic situation may accentuate the country’s indebtedness to institutions such as the International Monetary Fund (IMF) and the World Bank (BM), making debt service more burdensome. The dean of UDM, a private education institution, points out that poor families will tend to become even more impoverished and social services still leaner as a result of Covid-19.

 

Ngoenha says that Mozambique will not escape the negative impact of the pandemic in Africa, taking into account that most countries on the continent are dependent on the export of primary products and foreign investment. “The weakening of African economies by Covid-19 should lead us to a period of introspection, and perhaps help us prioritise domestic production,” Ngoenha says. But the Covid-19 pandemic should challenge humanity to produce some universal solidarity, because the scale of the disease shows that there are threats that know no borders. “We are part of a single humanity. We must think of ourselves as beings that inhabit a single world,” the UDM rector asserts.