Debt, violence risk instability for Mozambique

Mozambican President Filipe Nyusi holds up the flag of his party, Frelimo
President Filipe Nyusi will have to exert control over his party and the military in order to work out a power sharing agreement with the Renamo opposition party (source: dpa)
  • A debt scandal has put the government under huge financial and political pressure
  • More foreign investment, especially in natural gas, could ease the fiscal burden
  • Attracting investors will require cleaning up the government’s accounts and a peace agreement between rival political parties
Facing two crises, Mozambique’s outlook is dire. Its first crisis is financial: shady government-backed loans have ratcheted up the country’s debt by as much as $2 billion, a hefty bill for a country whose gross domestic product in 2014 was only about $16 billion. The second crisis is political: violence has flared up once again between the governing Mozambique Liberation Front (Frelimo) party and the Mozambican National Resistance (Renamo) opposition. Mastering this volatile situation will require some fancy footwork from President Filipe Nyusi.

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