Mozambique Roundup: Elections, money laundering, cashew factory

Combating money laundering

The Financial Action Task Force (FATF) has commended Mozambique for its unwavering commitment towards combating money laundering and terrorist financing, as efforts are underway for the nation to be removed from the FATF's 'grey list'. The latest progress report indicates substantial advancements, showcasing updates on six specific action items, the implementation of improved risk-based supervision, and the allocation of enhanced resources to the Financial Intelligence Unit (FIU). According to COB, despite these improvements, Mozambique still faces the challenge of fulfilling six remaining actions before the upcoming report due on November 24, a timeline dictated by its inclusion in the grey list on October 22, 2022.

Elections amid insurgencies

As Mozambique approaches critical elections this week, it is doing so under the shadow of persistent jihadist violence and severe drought-induced hunger affecting its populace. Approximately 17 million voters are set to cast their ballots to elect a new president, alongside members of parliament and provincial assemblies, marking an end to President Filipe Nyusi's extended two-term rule. Candidates are notably prioritising the cessation of the insurgency in Cabo Delgado, an area that has witnessed violence leading to the displacement of 1.3 million individuals. Despite facing corruption scandals and allegations of electoral fraud, the ruling Frelimo party is anticipated to win once more, reports KSAT.

History of Mozambique

Tracing the historical context of Mozambique reveals a series of significant events since gaining independence from Portugal on June 25, 1975. The country was established after a liberation struggle led by the Frelimo party, which later transitioned into a one-party Marxist state by 1977 under President Samora Machel. Following a tragic civil war lasting from 1977 to 1992, which claimed approximately one million lives and devastated the economy, a peace accord was signed, leading to the first democratic elections in 1994, maintained by Frelimo's continued dominance in elections ever since. As reported by Barron's, from 2017 to 2024, Mozambique has faced violent attacks connected to the Islamic State group, particularly in Cabo Delgado, resulting in military interventions from foreign nations and ongoing efforts aimed at peace and reintegration of combatants into civilian sectors.

Things to know about Mozambique

Despite boasting considerable natural gas reserves, Mozambique remains one of the poorest nations globally, with over 33 million inhabitants. The legacy of a destructive civil war and ongoing challenges, such as rampant poverty (afflicting around 74.5% of its population), underscore the urgency for economic stability. The Cabo Delgado province, rich in gas, has been the site of jihadist violence that has claimed nearly 5,800 lives since 2017. Barron's reports that support from regional forces like Rwanda and South Africa have been mobilised to address this crisis, and a recent promise of substantial gas revenue—potentially exceeding $6 billion annually—brings cautious optimism for future economic growth. However, further development efforts have faced hindrances from ongoing violence. Furthermore, Mozambique's vulnerability to climate-related disasters has been starkly illustrated through the damage inflicted by cyclones Idai and Kenneth in 2019.

First cashew factory

To stimulate economic diversification and bolster local agriculture, a new cashew nut processing factory has been inaugurated in Palma, Cabo Delgado, amidst improved security conditions. Funded by The Sunshine Approach Foundation with an investment of 30 million meticais (approximately US$1.3 million), this facility boasts a processing capacity of 1,500 tons of cashew nuts per year and is projected to create employment opportunities for around 100 individuals. This project is part of broader initiatives aimed at stabilizing and industrializing the region, reflecting renewed confidence from investors in Cabo Delgado, reports COB.