Mozambican economy faces double whammy with COVID-19, ISIS insurgency

Mozambique, a country in Southern Africa, is facing a double whammy of economic challenges with the COVID-19 pandemic and the ISIS insurgency threatening its stability. In a recent interview with CNBC Africa, Rui Olivera, the CEO of BFA Asset Management, highlighted the critical issues plaguing the Mozambican economy. The impact of the COVID-19 pandemic has been severe, with services being shut down and the economy expected to contract by 1.3%. This marks a significant downturn from previous predictions and is exacerbated by the aftermath of a heavy storm that devastated parts of the country. The rise in inflation, currently at 23%, further adds to the economic woes faced by Mozambique. Olivera noted that the country is teetering on the edge of recession, with the situation made more precarious by the insurgency of ISIS in the region. The presence of ISIS poses a serious threat to the country's security and stability, especially in the midst of economic turmoil. Despite efforts by the government to reinforce security measures, the risk of the situation spiraling out of control remains a major concern. The unemployment rate in Mozambique has also been on the rise, compounding the challenges faced by the population. Olivera drew comparisons with Angola, another Lusophone country, which is also grappling with economic contraction and rising unemployment. He highlighted the need for both countries to address these pressing issues to prevent further deterioration of their economies. While Angola may not be in as dire a situation as Mozambique, both countries are experiencing significant economic strain that demands urgent attention and intervention. The interview underscored the fragile state of the Mozambican economy and the urgent need for coordinated efforts to mitigate the impact of the dual crises of COVID-19 and the ISIS insurgency. The coming months will be crucial in determining the country's ability to navigate these challenges and chart a path towards sustainable growth and development.