1. What’s at stake?
As much as $120 billion in investment, according to Standard Bank Group Ltd., Africa’s largest lender. It’s unlikely all that money will materialize, especially if the violence continues to ratchet up. But the completion of even some of the projects would be a game-changer for the southern African country and its 32 million people, almost two-thirds of whom live on less than $1.90 a day, the World Bank’s definition of extreme poverty.
2. How much money could this generate?
The government expects to pocket $96 billion over the next quarter-century from three liquefied natural gas plants that would turn Mozambique into a leading exporter. The money could go a long way toward improving woefully inadequate transport links and access to health and education. Besides creating several thousand construction jobs, gas production could galvanize local output of electricity, fuel and fertilizer. The authorities plan to establish a sovereign wealth fund to manage its LNG income and allocate a fixed portion of it to fund infrastructure and poverty reduction.
3. What is the status of the projects?
Some are on hold. Total has established an onshore project site on the Afungi peninsula in the northern Cabo Delgado province, part of a planned $20 billion development that’s expected to begin producing gas from 2024. It’s suspended work and evacuated staff twice this year due to security concerns and it’s unclear when construction will resume. In March, Exxon delayed formal approval of its planned $30 billion Rovuma project for a third straight year and the government doesn’t expect a final decision before the end of 2022.
4. Is anything moving forward?
Yes. ENI is forging ahead with a $7 billion development that it approved in 2017 and is expected to begin producing LNG in 2022. That’s because its infrastructure is 80 kilometers (50 miles) offshore, on a floating plant above the gas fields, sparing it from the turmoil on land.
5. Could the projects be abandoned?
There’s growing risk some investors will pull the plug. While oil majors are attuned to operating in conflict zones and have already made substantial investments, the violence is adding to costs and their financiers are becoming increasingly skittish. Prolonged delays would also be problematic because other big LNG projects in Australia, Qatar and Russia are due to come on stream from about 2025 and could create a market glut. Fitch Ratings has warned that Mozambique’s gas and the infrastructure needed to export it could become stranded assets unless it speedily tackles its security issues.
6. Who is behind the attacks?
Most of the insurgents are poor, disenfranchised local youths, although some have come from Tanzania and other nearby states. They started out as an Islamic sect in 2007 and refer to themselves as al-Shabaab, as do locals, but they don’t have any known links to the Somali group that goes by that name and is allied to al-Qaeda. In 2018, they aligned themselves to Islamic State, which has claimed responsibility for dozens of the attacks.
7. How did the insurgency start?
It began with an assault on the port town of Mocimboa da Praia in 2017 and has since ramped up significantly, with Mozambique experiencing the sharpest rise in Islamist attacks globally in 2019. The sophistication, scale and frequency of incursions continued to escalate in 2020, with the attackers using rocket-propelled grenades and other weapons seized from the military. Violence abated during the rainy season at the start of 2021, but hopes the insurgency had been quelled were shattered in March when at least 100 militants attacked the town of Palma, less than 8 kilometers from Total’s site, and killed dozens of people.
8. How is Mozambique managing the threat?
The army has struggled to contain the violence as the insurgents’ ranks swelled and they gained access to better weaponry. Advocacy groups Human Rights Watch and Amnesty International accuse the security forces of resorting to extra-judicial killings and other heavy-handed tactics against suspects. The government hired Russian and South African mercenaries to quell the attacks, but they too have had limited success. More recently, the state has started social programs targeting vulnerable youths in Cabo Delgado in a bid to address widespread discontent over a lack of jobs and other economic opportunities in the predominantly Muslim area.
9. How have other countries responded?
The 16-nation Southern African Development Community, a trading bloc, has condemned the terrorist attacks, saying they require “a proportionate regional response.” President Filipe Nyusi said foreign troops on Mozambican soil would compromise its sovereignty and international forces should only play a supporting role. Defense Minister Jaime Neto has urged neighboring countries to strengthen border controls to prevent fighters from entering Cabo Delgado. The U.S. agreed to provide training to Mozambican soldiers, while France and Portugal have also offered assistance. Islamic State has warned it would be “delusional” to think that Mozambique’s government could protect the investments and threatened to stage attacks in South Africa if it intervenes.
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