Mozambique Roundup: Border development, Islamist attacks, economic recovery

Decentralisation Law enacted

President Filipe Nyusi has recently promulgated and ordered the publication of the Punctual Revision Law of Law number 4/2019, which pertains to decentralised governance in Mozambique's provinces. This law, approved by the Assembly of the Republic, aims to establish principles, organisational rules, competencies, and the functioning of executive bodies at the provincial level. President Nyusi's endorsement signifies the law's alignment with the country's Fundamental Law, setting the stage for further decentralisation efforts, Journal Noticias reports.

Border Efficiency Initiative with South Africa

Mozambique is embarking on a transformative project to establish a one-stop border post with South Africa, slated to be operational by January 2027. The initiative, estimated to cost up to $290 million, aims to streamline border crossings, enhancing efficiency and trade facilitation between the two countries, Zitamar reports. “The feasibility study is expected to be completed by August. It’s expected that by October the concession memorandum will be signed, and by December construction will begin on the infrastructure, which will last 24 months. One of the big challenges has to do with what we call coordinated border management on the Mozambican side. It’s necessary to be effective, to have various agents at the border in the areas of customs, migration, health security, with coordinated management so that, with their South African counterpart, we can have a more expeditious activity,” Ambrósio Sitoe, the permanent secretary of the Ministry of Transport and Communications, said while unveiling plans during the 8th Maputo Port Conference, highlighting the project's timeline and objectives. 

Islamist attacks

Mozambique's security forces are intensifying efforts to combat Islamist insurgents following a major attack on the northern town of Macomia. President Nyusi addressed the nation, acknowledging ongoing clashes and reaffirming the government's commitment to quell the insurgency. "Macomia is under attack since this morning. Fire exchange still continues," Nyusi said is quoted by Journal Noticias. Adding that the militants initially withdrew after about 45 minutes of fighting, but then regrouped and came back. The attack exposes persistent security challenges in Cabo Delgado province, where militants aligned with Islamic State have been active since 2017, Journal Noticias reports.

Reduced demand for external financing

Mozambique's economy has shown signs of recovery, with a significant reduction in demand for external financing recorded in 2023. Official data indicates a 72.3% decrease in the need for external reserves to finance consumption and investment, reflecting a strengthening economic position, Club of Mozambique reports. “The contraction of the current account deficit by 67.7 % contributed essentially to this result, standing at US$2.224 billion (€2.066 billion), equivalent to 10.8 % of GDP,” the report indicated. Adding that the reduction in the current account deficit “fundamentally reflects the 82.1 % decrease in the negative balance of the goods account, justified by the 76% decrease in imports of goods by companies belonging to the large projects category compared to 2022,” standing at US$1.307.2 billion (€1.214 billion).

UK returns illicit funds

Mozambique and the United Kingdom have signed an agreement facilitating the return of assets obtained through illicit means. The memorandum, signed in the Bailiado of Jersey, signifies a collaborative effort to repatriate funds totaling 829,500 pounds to Mozambique. The agreement follows a plea by the Attorney General of Jersey to seize funds stashed in a Jersey trust by Mozambican national Carlos Fragoso, purportedly sourced from illicit payments during his tenure in Mozambique, Journal Noticias reports. Fragoso allegedly entrusted funds to the Tolvex Trust in 1996, under the guise of a civil engineer aiming to secure his family's future with past earnings.