Country Report Mozambique September 2009

Summary

Mozambique's ruling party, Frente de Libertacao de Mocambique (Frelimo), is expected to remain in power under the president, Armando Guebuza, as Mozambique prepares for three elections that will be held on October 28th.
Although no changes to the donor-led economic programme are expected under Mr? Guebuza, progress on reform could slow, given opposition to some of the proposed changes within the cabinet and from Frelimo hardliners.
Foreign investment in the mining sector is expected to continue as foreign companies step up their exploration activities, but the pace of investment will be slower than in previous years, owing to the global downturn.
Despite the global economic downturn, real GDP growth is forecast to remain strong at 4.8% in 2009 and 5.2% in 2010, supported by strong agricultural growth, donor support and continuing inflows of foreign direct investment.
Inflation is expected to fall to an average of 3.5% in 2009, in response to changes in international food and energy prices and rising agricultural output, before climbing to 6.4% in 2010.
The current-account deficit is forecast to narrow from an estimated 11.1% of GDP in 2008 to 10.2% of GDP in 2009 and 10.3% of GDP in 2010, mainly because of a fall in the services and income deficits.

Mozambique's most notorious fugitive from justice, Anibal dos Santos Junior, known as Anibalzinho, has been rearrested, eight months after his third successful escape from a Maputo prison.
The IMF has called on the government to step up implementation of its "second wave" of structural reforms in order to maintain the momentum of real GDP growth, which averaged a robust 7.6% a year in 2005-08.
An IMF working paper has warned that the metical is seriously overvalued, threatening the sustainability of the country's external account.
A Canadian oil company, Artumas, has announced that it will sell its oil exploration rights in Mozambique, including 34% of its 49.3% interest in the Rovuma Onshore concession, and its entire 8.5% interest in Offshore Area 1.
The bridge across the Zambezi River at Caia has finally opened following an ???81m (US$113m) investment by the EU, Italy, Sweden, Japan and the Mozambican government.
The government has issued a new policy that will liberalise the management of the country's airports, including Mavalane International Airport in Maputo and several smaller airports across the country.

Source: Country Report

This report covers the following industry codes:
SIC Code: 70;1;60;49;47;15
NAICS Code: 72;11;52;22;48;23