Armed attacks in northern Mozambique have caused losses of US$209 million and led to the closure of 1,110 companies, the president of the Confederation of Economic Associations (CTA) said Thursday in an interview with Lusa.
Agostinho Vuma said that of that figure there was US$100 million that corresponded to losses in agricultural production, US$95 million in physical capital and US$14 million in cash flow, “in the various value chains.
Vuma said that the figures covered losses caused to the business community in all districts directly affected by the actions of armed groups in Cabo Delgado province over three and a half years of armed violence in the region, but did not include the impact of the 24 March attack on the town of Palma, about six kilometres from the industrial complex of the natural gas projects, on the Afungi peninsula, because an assessment is still underway.
Although the assessment is still underway, the official said, “the suspension of LNG (liquid natural gas) project activities in Afungi could significantly affect a large number of companies and their links in the value chains.
Of the total number of companies that have been forced to close due to armed violence in Cabo Delgado province, 410 are from the districts directly affected by the attacks, namely Macomia, Muidumbe, Nangade, Quissanga, Mocímboa da Praia and Palma.
“The other 750 companies suffered indirect impacts due to their exposure in the various value chains, whose flow [of activity] was interrupted following the recent attack on Palma district,” the CTA president stressed.
Agostinho Vuma pointed out that 198,000 jobs had been lost, of which 56,000 in business units in the districts affected by the violence and 143,000 in the family farming sector, during the more than three years of conflict.
Although the effects of the suspension of the natural gas project by French multinational Total are still being assessed, Vuma said that “several companies” ran the risk of seeing their supply contracts fall through, creating a situation of uncertainty about “some products in transit,” particularly perishable goods.
“We advocate the need for urgent intervention to minimise the impact” of the attacks on Palma town, the CTA president said.
He advocated a stimulus package for the recovery of Cabo Delgado’s business sector, through financial and tax measures, as well as the introduction of more flexible labour legislation.
Companies in Cabo Delgado, he said, needed loans with “friendly interest rates,” and a “flexible labour system,” with a regulatory framework to ensure the hiring and reduction of labour that does not put the survival of businesses at risk.
Agostinho Vuma said that the sustainability of the business sector linked to the natural gas megaprojects in Cabo Delgado depends on the restoration of peace in the province, calling on the government to find solutions to end the violence.
Armed violence in Cabo Delgado has been going on for three and a half years, but escalated again on 24 March when armed groups attacked for the first time the town of Palma, which is about six kilometres from the multimillion-dollar natural gas projects.
