Mozambique gas dividend may offer some fiscal relief

Subject

Mozambique economic update.

Significance

The cabinet recently announced that three new exploration contracts would be signed in September for gas blocks. This is welcome news for President Filipe Nyusi's administration after terrorist attacks in the northern Cabo Delgado province delayed several final investment decisions, while the government's long-running fiscal and debt troubles continue.

Impacts

• FRELIMO may triumph in the forthcoming local polls but will struggle to retain power in the 2019 general election.
• A new media law, which includes vastly increased accreditation fees for journalists, will raise fears of a growing clampdown on dissent.
• The government and gas companies will struggle to complete projects in Nampula and Zambezia provinces amid sizable local opposition.
• Youth resentment of the authorities could worsen.