Russia-Ukraine crisis affect supply of fuels

Fuel merchants in Mozambique are already feeling the effect of the military crisis in Ukraine and Russia. The Mozambican Association of Fuel Companies (Amepetrol) said on Saturday (26-02) that there may be difficulties in replenishing fuel stocks in the near future. The price of a barrel of oil continues to rise, having now reached US$105. The rise has been precipitated by the Russian invasion of Ukraine. Ricardo Cumbe, secretary general of the Mozambican Association of Fuel Companies, says the situation is already worrying fuel suppliers in Mozambique.

“The conflict between Russia and Ukraine is already being felt in the country. We are talking principally about fuels, but there are other commodities that Mozambique depends on for imports,” Cumbe says.

The association fears that the situation will interfere with the replenishment of fuel stock in the national market and complicate the fulfilment of contract between fuel suppliers and the government.

“A good part of the operators did not manage to import in the light of the contract, which provided for bringing 215,000 tons of fuel to the country. This order may not come in the magnitude that is desired, given the inability of operators to issue collateral to sustain the merchandise,” he explained.The Mozambican Association of Fuel Companies foresees an increase in the price of fuel and, consequently, of other products, but offers some solutions.

 “The rise in prices is not a projection, but a reality, since prices in the market are already increasing significantly. What is not happening yet is the situation making itself felt in the consumer’s pocket, as the fuel companies are bearing the costs,” Cumbe said.

“One of the measures that we learned during the pandemic is the deferment of tax payments, which we, as a sector, feel that we are already having some difficulties in making, as our cash-flow, that is, revenues, are already in the red,” he explains. Amepetrol says it will continue to supply fuel into the country as long as possible, despite the concerns.

$1.2bn for Afreximbank in boost to African

 

·         Peter Blenkinsop, CEO of FNB Mozambique, said “This transaction demonstrates the international and African market capability and expertise that FNB Mozambique is able to call on through its association with the FirstRand Group, and this is fully available to Mozambican entities.”

RMB acted as global coordinator, bookrunner and mandated lead arranger for African Export Import Bank, or Afreximbank, in securing a USD1.2 billion (R18bn), 3-year Syndicated Term Loan Facility. Rand Merchant Bank (RMB) is the corporate and investment banking arm of FirstRand Bank Limited – of which FNB Mozambique is also a division. Afreximbank is a Pan-African multilateral financial institution that finances and promotes intra-and extra-African trade. The proceeds from the Term Loan Facility will be used mainly to refinance existing facilities and general corporate purposes. Suresh Chaytoo- Sector Head Banks and DFI’s at RMB said: “We are really pleased to be part of a significant effort by Afreximbank to boost its mandate across Africa with this transaction. It is encouraging the support that this fund raise received internationally, which is a testament to the credit quality and sound risk management at Afreximbank.”

RMB was the only African bank appointed as global coordinator which underlines its commitment to supporting and sustaining the Africa loan market. RMB has a long-standing relationship with Afreximbank spanning ten years. RMB also worked with First Abu Dhabi Bank PJSC and Standard Chartered Bank as joint global coordinators, bookrunners and mandated lead arrangers on the facility. Launched to a limited group of relationship banks at a launch amount of US$600 million equivalent, the Facility was more than 2.3x oversubscribed allowing for Afreximbank to subsequently upsize the amount to US$1.2 billion while also scaling back the banks on the deal. 

This successful transaction, launched against the backdrop of volatility that resulted from the announcement of the Omicron variant of COVID-19, is testament to the strength of Afreximbank’s investor relationships and the high regard and confidence that the market has for the Bank’s financial strength, and its importance to the continent. Peter Blenkinsop, CEO of FNB Mozambique, said “This transaction demonstrates the international and African market capability and expertise that FNB Mozambique is able to call on through its association with the FirstRand Group, and this is fully available to Mozambican entities.” Afreximbank has a rich history of intervening in support of African countries in times of crisis. Through the Pandemic Trade Impact Mitigation Facility (PATIMFA) launched in April 2020, the Bank has disbursed more than US$7.5 billion to help member countries manage the adverse impact of financial, economic, and health shocks caused by the COVID-19 pandemic.

“Credit to the economy will grow this year”

Credit to the economy is expected to grow this year, prompted by an improvement in economic activity compared to last year, increasing Covid-19 immunization both globally and nationally, and the reopening of various economic sectors.

Government forecasts based on data provided by the Bank of Mozambique and cited by ‘Notícias’ indicate that, last year, credit to the economy reached 288,841 million meticais, an increase of 8.80% compared to the previous year. This year, the amount could reach 331,301 million meticais, representing a 14.70% growth. The government also says that, with a view to contributing to the country’s macroeconomic stability, reflected by the achievement of the single-digit inflation target, the Bank of Mozambique will this year continue to prioritise the implementation of a prudent monetary policy, based on the calibration of its monetary policy, with the emphasis on the alignment of its benchmark MIMO interest rate with macroeconomic fundamentals.

In the foreign exchange market, the monetary authority will take into account the need to ensure an adequate level of gross international reserves (GRI) to cover approximately six months of imports of goods and services, as well as to limit excessive exchange rate volatility against the main and commercial currencies of the country, especially when this is not due to macroeconomic fundamentals.  With regard to the balance of payments, government forecasts point to a possible deterioration of the current account deficit, resulting from the worsening of the goods account balance.

The increase in the goods account deficit is the result of the notable increase in imports, especially large projects, reflecting the implementation of the Coral Sul-FLNG project, in the Rovuma Basin.

With regard to exports, growth of around US$1,024 million is expected, essentially reflecting the increase in large projects (US$979 million), thanks to the gradual recovery of external demand and the prices of goods on the international market. As for foreign direct investment (FDI), the government anticipates a net inflow of US$3,189 million this year, a reduction of US$535 million compared to last year’s projection. The drop in FDI this year is largely explained by changes in the course of projects in the northern part of the country.

Ukraine voted by Africa

 

Some 17 African countries abstained from the vote at the UN General Assembly to deplore the Russian invasion of Ukraine while some other 28 countries in the continent voted in favour.   Among those abstaining from vote were  South Africa, Algeria, Uganda, Burundi, Senegal, South Sudan, Mali and Mozambique. Others were Sudan, Namibia, Angola, Zimbabwe, Equatorial Guinea, Central Africa Republic, Madagascar, Tanzania and Congo.

Eritrea was the only African country that voted against the resolution. Egypt, Tunisia, Nigeria, Kenya, Chad, Ghana, Gambia, Gabon, Rwanda, Cote d’Ivoire, Libya, Liberia, Djibouti, Mauritania, Somalia, Niger, Benim, Lesotho, Botswana, Zambia, Malawi, Mauritius, Comoros, Seychelles ,Cape Verde, Sao Tome and Principe, Sierra Leone and the Democratic Republic of Congo, among others, voted yes. Burkina Faso, Cameroon, Guinea Bissau, Ethiopia, Eswatini were not in the room.

Uganda said it abstained from the vote to uphold “neutrality” as the incoming chair of the Non-Aligned Movement (Nam). Nam is a forum made up of 120 developing countries to assert their independence from the competing claims of the two superpowers. In a tweet, Uganda’s Permanent Representative to the United Nations, Adonia Ayebare, said the country will “continue to play a constructive role in the maintenance of peace and security both regionally and globally”. Uganda Abstained on the UN General Assembly vote on the Ukraine Crisis. As incoming Chair of the Non- aligned Movement(NAM) NEUTRALITY is key. Uganda will continue to play a constructive role in the maintenance of peace and security both regionally and globally. 

Stirred in the heart

The President of the Republic, Filipe Nyusi, today dismissed Carlos Agostinho do Rosário from the post of Prime Minister and Lídia de Fátima da Graça Cardoso from the post of Deputy Minister of Health, a press release sent to the newspaper ‘O País’ by the Presidency of the Republic announces.

Yesterday, Nyusi dismissed six ministers: Adriano Maleiane, dismissed from the post of Minister of Economy and Finance; Max Tonela, Minister of Mineral Resources and Energy; Carlos Mesquita, Minister of Industry and Commerce; João Machatine, Minister of Public Works, Housing and Water Resources; Augusta Maíta who leaves the position of Minister of the Sea, Inland Waters and Fisheries; and Carlos Siliya, dismissed as Minister of Combatants.

The document does not reveal the reasons for the two ministers’ dismissal.

Sugar workers strike to impact production

The strike by workers at the Xinavane plantation and mill, about 90 kilometres north of Maputo, is likely to affect Mozambique’s sugar production levels, according to a report in Friday’s issue of the Maputo daily “Noticias”. In order to avert the situation, the Minister of Agriculture, Celso Correia, on Thursday stressed the need for urgent consensus between the workers and the employer, after the meeting he held with the subsector’s stakeholders at the Maragra sugar company, also located in Manhiça district. The strike, Correia added, will have a great impact on the country’s sugar production levels, so there is a strong need for the establishment of permanent dialogue, to avoid situations that cause huge financial losses to the companies.

“Now conditions have been put in place for workers and employers to return to the negotiating table and, consequently, for the workers to return as soon as possible to their jobs, so that the mill resumes production,” Correia said, pledging that the government will keep a close eye so that such scenarios are once and for all overcome.

The General Secretary of Mozambique’s main trade union federation, the OTM (Organisation of Mozambican Workers), Alexandre Munguambe, deplored the low wages paid by the sugar industry in Mozambique, unlike the other countries, where the same companies operate. Munguambe pointed out that the companies pay the equivalent of 2.6 US dollars a day, far below the workers’ expectations. “We urge dialogue between the two sides, not only when there is a strike, but at every moment of the production process. Today it is Chinavane, but tomorrow it might be another mill”, said Munguambe.

A report in the independent daily “O Pais” indicates that sugar production levels fell by 12 per cent, as a result of the rains, cyclones and the restrictions caused by the Covid-19 pandemic between the 2020-2021 seasons. Production was reduced from 306,000 to 271,000 tonnes. The installed production capacity in the four operational mills is 530,000 tonnes – but the highest production ever reached in recent years was 425,000 tonnes in 2014. Correia, however, believed it is possible to raise production to 500,000 tonnes a years by 2030. Mozambique employs about 34,000 workers, permanent and seasonal, in the mills and sugar cane plantations which cover nearly 47,000 hectares. The average annual value of sugar exports between 2019 and 2021 was 86 million dollars, which was 14 per cent of all agricultural exports.

Meanwhile heads have rolled in the police force, apparently because of the violent scenes in Xinavane on Wednesday, when houses, cars and 50,000 hectares of sugar cane were set on fire. The General Commander of the police, Bernadino Rafael, ordered the removal of the Maputo provincial police commander, Inacio Dina, the Manhica district commander, Jose Jofrice, and two other officers. The official police line is that these changes in command had nothing to do with the Xinavane events. In fact, Rafael was angered that the police had taken no preventive measures although it had been known well in advance that the Xinavane workers were planning to go on strike. So poorly prepared were the police that the rioters were able to burn down much of the Xinavane police station.

 

The certified diamond

Mozambique’s integration into the Kimberley process certification system opens up good opportunities for the diamond industry and for strengthening the national economy, especially as regards creating job opportunities for young Mozambicans and supporting communities. So said Castro Elias, executive secretary of the Kimberley Process Management Unit (Precious Metals and Gems) in Vila da Praia do Bilene, on Monday, February 21.  Elias stressed that, in order to avoid future conflicts, ongoing policies in the diamond sub-sector must take into account the social situation of people residing in mining areas.  Elias noted that the social impact of the extractive industry on those living near mining concessions was still negligible, given the glaring paucity of essential basic services.

“Companies must comply with the law of social responsibility regarding populations on the ground,” he said. “

One of the measures taken by the government to reduce conflicts was adherence to the Kimberley process. From then on, no rough diamond can leave the country without the Kimberley certification of its origin, destination and bearer,” Elias told Notícias. This measure, he added, applies also to other precious metals and gemstones, which are now certified of Mozambican origin. Considering the strategy of prioritising precious metals and implementing new prospecting and production projects, an increase in direct labour is expected in the coming years, and a greater commitment to social responsibility must accompany it, Elias said.

“We are waiting for the rainy season to end for companies to deliver their business plans, and then to select those prepared to continue their diamond exploration and exploitation activities. From there on, we will have an idea of how many jobs will be created for young people,” he explained.

 

Starlink

Mozambique’s National Institute of Communications (INCM) yesterday announced the granting of a licence to the US-based Internet service provider Starlink, a SpaceX project. “The granting of this licence will bring enormous benefits to the information and communication technology ecosystem in Mozambique,” a note from the INCM reads. For the regulatory authority, the entry of Starlink, whose licence was scheduled  to be officially handed over in a symbolic ceremony in Maputo this Wednesday (23-02), will improve connectivity and reinforce the expansion of broadband in Mozambique.

 “The data transmission service being provided by Starlink will complement others available on the market, without replacing existing technologies,” the INCM note adds. SpaceX intends to create a constellation of satellites to provide low-cost broadband Internet services and global coverage.

Elon Musk’s SpaceX, Starlink’s parent company, has explained that, while most satellite internet services rely on satellites in orbit about 35,000 kilometres above the Earth, the Starlink constellation is much closer, at about 550 kilometres, which reduces data travel time between users and the satellites. SpaceX’s satellite internet pilot is currently available in 16 countries: United States, Canada, United Kingdom, Germany, France, Austria, Netherlands, Ireland, Belgium, Switzerland, Denmark, Australia, New Zealand, Chile, Poland and Portugal.

On February 4 this year, SpaceX sent into space a new group of 49 Starlink network satellites, to join the constellation of 2,000 broadband internet satellites built by the private company and already in orbit. However, of this set, 40 were affected by a geomagnetic storm.

SpaceX previously indicated that, in face of the geomagnetic storm, its team had instructed the satellites to enter safe flight mode, minimising the force of the drag and protecting them from the phenomenon. Based on a preliminary analysis, the company made it known that the increase in atmospheric drag at low altitude prevented the satellites from exiting safe flight mode. The affected satellites are expected to re-enter the Earth’s atmosphere, disintegrating in the process.

Agree on joint initiatives to produce

Eni and the Ministry of Agriculture and Rural Development of the Republic of Mozambique (MADER) signed today an agreement for the cooperation and development of agricultural projects in Mozambique, aimed at producing oil seeds and vegetable oils to be used as agro-feedstock for the production of biofuels. Under the agreement, Eni and MADER will assess potential sites and the most appropriate crops for the production of oil seeds and vegetable oils, focusing on areas that would not compete with food production and taking into consideration the preservation of forests and natural ecosystems. Other initiatives include the collection and valorisation of agricultural and agro-processing residues, by-products and co-products, for production of biofeedstock and Natural Climate Solutions (NCS).

The agreement builds on the Memorandum of Understanding signed in 2019 by Eni and the Government of Mozambique for the joint definition of sustainable development and decarbonisation projects to support the country’s National and Local Economic and Social Development Agenda. Also, it is in line with Eni´s commitments to accelerate the energy transition in fossil fuel producing countries, promoting the integration of the African continent into the biofuel value chain through agribusiness and industrial development initiatives aimed at the production of advanced biofuels, helping the decarbonisation of the transport sector and promoting development opportunities.

“Is a warzone, but profiteers are doing a roaring trade”

The South African Press Council announced on 14 February 2022 via its website the decision in the case of Gemfields Ltd and Montepuez Ruby Mining Limitada (“MRM”) vs The Continent and Mail & Guardian. The Press Council’s finding was published on its website.

The case involved an article written by Luis Nhachote of Mozambique’s Centre for Investigative Journalism. One article, entitled “Cabo Delgado is a warzone, but profiteers are doing a roaring trade” appeared in the [Mail & Guardian newspaper]. The other, entitled “Cabo Delgado is a warzone, but profiteers strike it rich” appeared in [The Continent], which is affiliated with the Mail & Guardian.

The Press Council found Mr Nhachote’s article to be in breach of provisions 1.1, 1.2, 1.7, 1.8. and 10 of the Press Code. The breaches were classed as Tier 2 (serious) infringements. The breaches included the use of misleading headlines, wrongly implying impropriety in respect of payments, inaccurately reporting monetary amounts, wrongly suggesting opaque ownership and not affording Gemfields and MRM fair opportunity to comment.

The Press Council has ordered The Continent and Mail & Guardian to publish an apology, to effect corrections and to provide a right of reply to Gemfields and MRM.

This is the second time that the Press Council has sanctioned the publication of work by journalists working for Mozambique’s Centre for Investigative Journalism. In May 2016, the Press Council found that an article authored by journalist Estacio Valoi and published in the Mail & Guardian entitled “Villagers digging for rubies ‘shot and left to die” did, inter alia, without sufficient justification create the impression that MRM and by association also Gemfields were in some way or another involved in the killing of people in the area and that given the total lack of supporting evidence, the newspaper’s creation of such an impression was not justified.

For 17 months

 Mozambique’s Electricity Company (EDM) has signed a new contract to supply power to the Kingdom of Eswatini, indicates an official statement issued Monday by EDM.  The contract has a duration of 17 months and provides for EDM to supply 20 megawatts of power, a quantity that can be revised depending on the needs of Eswatini Electricity Company (EEC), the note indicates.

“The bilateral relationship between EDM and EEC is over a decade old, with Mozambique and South Africa being the main suppliers of energy that that country imports to meet over 70 percent of its domestic consumption needs,” the note said.

The meeting at which the agreement was signed also served to analyse future projects between the two companies, particularly the Temane Thermal Power Plant, which is being built in southern Mozambique.

“The Temane Thermal Power Plant project includes a transmission line between Vilanculos [Inhambane province] and Maputo, which will interconnect to the Motraco system, the same one that makes the interconnection between Mozambique and the Eswatini Kingdom,” said the chairman of EDM, Marcelino Alberto, cited in the statement. In December,  Globeleq  company, the main shareholder of the Temane Thermal Power Plant announced it had secured full funding for the project, worth US$652 million (576.4 million euros), and expected to start producing electricity in 2024.

 

 

 

Diplomats unite in condemning aggression

Western heads of diplomatic missions in Maputo on Monday jointly condemned the Russian invasion of Ukraine and demanded the immediate withdrawal of Russian troops. The European Union ambassador, Antonio Gaspar, said the invasion was “an unjustified and unprovoked attack” which “violates the basic principles of international law and of the United Nations Charter”.

It had led the EU to respond with the most sweeping package of sanctions it had ever imposed. Mozambique, he added, “knows well the sufferings of war, and has bitter memories”

Gaspar told AIM he regarded as “very serious” the threats made by Russian President Vladimir Putin against Sweden and Finland, warning them of dire consequences if they should opt to join NATO. He was also alarmed by the declared intention of the President of Belarus, Alexander Lukashenko, to station nuclear weapons on his territory. “They are threatening a cataclysm”, said Gaspar, “but the only thing we can do is stay firm”.

The French ambassador, David Izzo, said the EU and its partners “are responding to this act of war with determination and unity”. He promised “we shall not be weak” and warned that the sanctions imposed will wreck the Russian economy and destroy the power of Russian oligarchs. The invasion is not only an attack against Ukraine, said Canadian High Commissioner Caroline Delaney, “but also an attack against the UN charter and its principles”. The United States Deputy Chief of Mission, Abigail Dressel, declared that ”Russia’s premeditated, unprovoked and unjustified attack on Ukraine is a threat to international peace and security, a blatant violation of international law, and an assault on the very principles that uphold global peace”. Acknowledging “the bravery and heroism of the Ukrainian people and government”, Dressel declared “We must hold Russia accountable for its war of choice”.