Since late October, Mozambique has been in the throes of widespread protests that have severely disrupted trade and created operational hurdles for a vital aluminum smelter.
With the nation bracing for possible escalations in unrest next week, the Constitutional Council is set to announce the results of the disputed election by December 23.
Opposition leader Venâncio Mondlane has signaled that further demonstrations may be on the horizon, depending on the council’s ruling.
The impact of the unrest has already been felt in shipping, with terminal operator Grindrod Ltd. reporting delays affecting 24 vessels and six cancellations at Maputo, the country’s busiest port.
Industrial Turmoil
At the center of the industrial turmoil, South32 Ltd., which oversees the leading aluminum smelting facility close to Maputo, has announced plans to reduce electricity supply to its operations.
This move aims to conserve raw materials and maintain production stability amid the ongoing challenges.
Impact on Economy and Investors
The protests have tragically resulted in at least 130 fatalities, according to local watchdog Decide Platform, which attributes the majority of the violence to police actions.
This period of unrest represents one of the most serious political crises Mozambique has faced in years, heightening anxiety among investors and putting additional strain on an already fragile economy.
In the financial markets, Mozambique’s $900 million eurobond has been on a downward spiral, experiencing its longest decline since July 2022, falling to below 81 cents on the dollar over the past nine consecutive days.
Additionally, the local division of Standard Bank Group Ltd. has downgraded its growth forecast for 2024 to 2.5%, a noticeable drop from last year’s estimate of 5.4%.
Current Situation and Future Outlook
While protests have subsided this week—thanks, in part, to Mondlane’s calls for a pause in demonstrations due to the effects of a tropical cyclone that struck the northern coast on Sunday—the overall situation remains precarious.
Reports indicate that the cyclone has claimed at least 73 lives since making landfall.
Mondlane, who has reportedly left the country, recently suggested during a livestream that the forthcoming ruling by the Constitutional Council will be pivotal in shaping the nation’s stability.
This uncertain landscape emphasizes the potential repercussions of the council’s decision and the challenges that lie ahead for Mozambique.
Source: Insurancejournal.com
