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Investors shouldn’t panic about the Mozambique insurgency problem just yet.
This is the view of an economist who follows a call from the nation’s government for South Africa to “make a difference” in Mozambique as part of its obligations to lead the Southern African Development Community (SADC) and be its economic powerhouse.
Despite growing concerns that political violence could cost industries like tourism, economics professor Bonke Dumisa argued that it was too early and likely to the insurgents’ benefit to start sounding the alarms yet.
It is officially known to have started around September 2017, but the insurgency in northern Mozambique has been characterized mainly by young foreign and local radicals attacking state properties and communities, killing many along the way and generating fear in the rural region.
The group also made headlines for occupying key exploration sites owned by major multinationals in the natural gas industry.
In a two-day webinar held between the trade ministers of South Africa and Mozambique, the two governments discussed ways in which the two nations could optimize bilateral trade and other economic opportunities between them.
What appears to have been left off the table was the growing threat to economic efforts in northern Mozambique posed by the insurgency in the region.
“The way political insurgency spreads is through fear and the disorganization of society in a country just by mentioning them [the insurgents]. They see it as propaganda to destabilize a country, ”Dumisa said.
“I know that people will say that such things cannot be desired from a country and some things cannot be hidden under the rug, but the reality is that a country is capable of containing and dealing with this on its own, without increasing discussions. . , It is preferable.”
According to Dumisa, political and economic uncertainty affected investment in one country.
While it was possible to have a country with economic uncertainty without political uncertainty, it is the latter that could harm the former the most.
“Where there is political uncertainty, it will surely suffer economically.
“Remember that Mozambique has been grappling with a lot of political uncertainty since its independence, and that it has far-reaching consequences that still affect them today,” said Dumisa.
South Africa is a major trading partner in Mozambique and, in addition to being a major investor, it counts Mozambique among its top five trading partners.
Mozambique’s new business opportunity, large-scale liquefied natural gas (LNG) projects in the Cabo Delgado province, has been the most threatened, according to local media reports in the country.
Insurgents have occupied various sites for these projects over the past year, although the government has maintained the argument that the insurgency was contained and the economy was not threatened as a result. Vice Minister of Commerce and Industry, Nomalungela Gina, called for the two countries to work together to replicate the Mozambique corridor model, where the two countries can create development zones for the former Portuguese colony.
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