AFRICAN BUZZ •
by 4.0%, nine percentage points below the previous forecast.
São Tomé and Príncipe is expected to see a recession of 6.0% of
GDP, the most marked among the countries with Portuguese
as an official language and the economy of Guinea-Bissau is
expected to contract by around 1.5%.
Mozambique is expected to grow by 2.2% this year, the same
as last year, according to the IMF, but this forecast is not shared
by the Economist Intelligence Unit (EIU), which estimates that
Mozambique’s economy will post a decline of 2.4% this year.
Source: macauhub
Leon Louw
Highly indebted countries like Mozambique are expected to be badly
affected by the aftermath of Covid-19.
“While developed countries have injected billions of dollars in
the health sector, the social security network and economic
stimulus measures, Africa has a serious lack of budgetary
room to react in the same way,” says the UNECA document.
Africa’s financial situation, added the UN Commission, is affected
by “four critical challenges,” particularly high levels of debt in
relation to Gross Domestic Product, high fiscal deficits, high
borrowing costs and depreciation of many African currencies
against the euro and the dollar.
More than 50% of African countries had budget deficits above
3.0% in 2019 and around 22 African countries presented debt
ratios as a percentage of GDP above the African average of 61%,
according to UNECA.
Among these countries are Mozambique, which recorded debt
of 108.8% of GDP and a budget deficit of 6.1% last year, and
Angola, whose debt reached 95% of GDP – despite a budget
surplus of 0.7%.
Vera Songwe, UN Under-Secretary-General and executive
secretary of UNECA, projected that USD100 billion is needed
urgently to create budgetary room for manoeuvre for all
countries, so they can “meet the immediate needs of the safety
net for populations”.
“The economic costs of the pandemic have been more severe
than the direct impact of Covid-19. Across the continent, all
economies are suffering from the shock, as the physical distance
necessary to manage the pandemic is stifling and drowning
economic activity,” said Songwe at the launch of the report.
According to the document, small and medium-sized
enterprises in Africa are particularly threatened, if there is no
immediate support. The price of oil, which represents 40% of
exports from Africa, fell by half in value, and the main African
exports also fell, including tourism and aviation.
Last week, in its Global Economic Outlook, the International
Monetary Fund projected a recession in sub-Saharan Africa, of
1.6% in 2020, 5.2 percentage points below the forecast made in
October.
All Portuguese-speaking African countries, with the exception of
Mozambique, are expected to post an economic downturn, with
Angola, dependent on oil exports, falling 1.4% and Cabo Verde
MOZAMBIQUE:
VIRUS INTERRUPTS AIRPORT
CONSTRUCTION
Chongoene airport, to be built in Gaza province, southern
Mozambique, by China Aviation International Construction,
will be completed six months later than initially planned due
to constraints imposed by the coronavirus pandemic. This
is according to Alberto Matusse, the provincial director of
Transport and Communications in Gaza.
Matusse told the daily newspaper, Notícias, that
construction work for the airport was happening at a slow
pace, mainly because most Chinese workers have not
returned from their home country since Lunar New Year
celebrations.
Of the three companies subcontracted for this venture, the
one responsible for the construction of the terminals, the
access road to the airport and all the landscaping of the
outer part of the passenger terminal such as the car park
and gardens, employs 42 Chinese workers, including those
from the inspection company, which has 146 Mozambican
workers.
Of these, 12 Mozambicans are from outside of Gaza and the
measure that was taken, due to the declaration of a state of
emergency, was to lay them off.
These constraints have led to a drop in the pace of work, on
the terminals, the runway, and as far as the fence, because
the companies involved are not receiving the equipment
and other materials that should have come from China.
The deadline for construction of the airport stipulated in
the specifications was 36 months from October 2018 to 30
March 2021, the date on which the contractor was due to
deliver the work to the government of China which, in turn,
would hand it over to its counterpart in Mozambique.
The first flight for the calibration of instruments was due to
happen in April 2021, and the airport was then expected to
be fully functional in May.
The foundation stone for the construction of this airport
was laid at the beginning of October of 2018, at a ceremony
attended by the President of Mozambique Filipe Nyusi and
the ambassador of China in Mozambique, Cui Aimin.
Source: macauhub
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African Mining • May 2020 • 7