12 December 2008
Maputo — Mozambican President Armando Guebuza on Thursday expressed his concern at the effects the international financial crisis may have on the Mozambican economy.
He was speaking at a ceremony where the consultancy company KPMG announced the results of its annual research into the "100 Top Companies of Mozambique".
Guebuza pointed out that several of the developed countries who are important trading partners of Mozambique are now in recession. The world market price of several of the key commodities that Mozambique exports (such as aluminium) has fallen sharply.
Guebuza feared the impact such changes might have on the balance of payments, and on other key macro-economic indicators.
"As well as remaining attentive to the current unfavourable international conjuncture, we have been managing our fiscal and monetary policies in a cautious and prudent manner, so as to minimize the impact of external shocks, and conserve the gains we have achieved in terms of inflation and the exchange rate", said Guebuza.
He thus made it clear that low inflation and a stable currency remain central aims of government policy.
Guebuza also stressed that the three year Food Production Action Plan approved by the government in July could mitigate the impact of the financial crisis. If the goals of this plan are met, it will sharply reduce Mozambique's dependence on grain imports. In particular, Mozambique hopes to become self-sufficient in rice within three years.
Guebuza stressed that the government's proposed budget for 2009 "was designed taking into account the need to support financially the entire value chain that the production, distribution, storage and sale of agricultural and livestock produce involves".
Despite the crisis, several of Mozambique's partners have hastened to assure the government that their foreign aid policies have not changed, and that there is no threat to either their direct support to the Mozambican state budget, or to sector programmes in areas such as health, education and agriculture.
But it is a different picture when it comes to private investment. The steel giant Arcelor-Mittal, for example, has announced that it is suspending its investment in Mozambique. With the sharp downturn in the world demand for steel, it is likely that the demand for coking coal will also fall - which raises questions about the various coal mining projects in the Zambezi Valley.
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