Terrorist attacks on oil and gas installations in Mozambique began on March 24, 2021, when Insurgents attacked Palma, a town 10 km from the $20 billion gas development by Total in Mozambique, the biggest of its kind in Africa. The attacks have led to the death of several people forcing Total to suspend work for a second time this year. EBII CEO, Adjoa Adjei Twum was invited by the BBC world News-day to offer her expert reflections on the economic impacts of these attacks.
According to her, investors may be unwilling to invest in the short term due to the current instability caused by terrorist activities. However, the country’s natural resource endowments might still encourage long-term investments but this will depend on the efforts being made to promote good governance and to strengthen institutions.
For companies with significant investments in the country that may have concerns about the security of their workers and facilities, they need to conduct risk and impact assessments as well as implement security measures to protect their staff. They also need to consider the increased costs of doing their business such as transaction costs, security costs and compliance costs and how this impacts their profits.
Adjoa also discussed the potential offered by the Africa Continental Free Trade Agreement (AfCFTA) and argued that while the situation in Mozambique is critical, it is only short-term and does not undermine the nation’s long-term contributions to the success of the AfCFTA.
You can listen to her interview here from the 27th-minute mark.