Via FrontierView, a report on Mozambique:

After a mild contraction of 1.4% YOY in 2020, the economy is forecast to grow by 3.2% YOY in 2021 on sharply stronger export revenues—especially coal—vis-à-vis 2020, and looser COVID-19 commercial restrictions. However, this rate reflects a recent deterioration in the growth outlook for 2021 as foreign direct investment into the liquid natural gas (LNG) industry slows.

• The Islamist insurgency in the far northeastern, gas-rich Cabo Delgado region has escalated to such an extent that FrontierView has also revised down its GDP growth forecasts beyond 2021. In April, the French energy firm Total declared force majeure and indefinitely halted construction on its US$ 20 billion gas processing facility following a surge of violence in the region. Total had previously suspended construction activity in January on similar grounds. The completion of the facility—which hitherto was expected to spur a rapid economic boom led by LNG exports—is now likely to be delayed well beyond the original target date of 2024.

• Most MNCs and their customers located in Maputo, Beira, and Tete will be unaffected by the insurgency. Additionally, the coal industry is expected to perform well on strong export demand, and agriculture will see improvements as part of a post-cyclone recovery. However, fragile demand conditions will persist among most other industries and customer segments owing to weak private sector sentiment, limited foreign investor appetite in non-LNG industries, and severely constrained public finances. MNCs should also take into account the country’s weaker economic growth prospects over the coming years when setting targets and seeking out LNG-related opportunities.