Oxford Economics believes that stability in Cabo Delgado province and the implementation of the anti-corruption strategy will be fundamental for Mozambique to improve its rating on the credibility of sovereign credit issues..

Analysts from the Africa department of British consultancy Oxford Economics said today that "for Mozambique to substantially reduce the risks to its sovereign issuance credibility and improve its rating, it is critical that the government increases efforts to finalize its anti-corruption strategy, while at the same time ensuring stability in Cabo Delgado province through better provision of humanitarian aid and effective military interventions".

Commenting on the maintenance of Mozambique's rating by Fitch Ratings last week at CCC+ and the withdrawal of a rating due to the lack of credibility of information on local issues, Oxford Economics says that "these actions are necessary for the country to maintain fiscal consolidation and economic growth".

Cited by Lusa, Fitch Ratings decided on August 12 to keep Mozambique's rating at CCC+, having stopped evaluating sovereign issues in local currency due to the "absence of credible information" on late payments.

In their note to clients, the consultants point out that natural gas exports and increased economic growth, which is expected to rise from around 4% in 2022 to over 6% this year, "are not enough to improve the country's rating".

"We now anticipate, as does Fitch, that the development of TotalEnergies' work near Palma, in Cabo Delgado, which has been halted since April 2021, will not resume until the first quarter of 2024," reads the analysis, which concludes that "the project is facing disagreements between contractors over costs and insurgents are still active in the districts near Palma."

The province of Cabo Delgado has been facing an armed insurgency for almost six years, with some attacks claimed by the extremist group Islamic State.