Portuguese financial crisis will not stop cooperation

Mozambican President Armando Guebuza has said that the serious financial crisis affected Portugal is just a challenge that will not prevent this country from cooperating with Mozambique.

Armando Guebuza
Armando Guebuza

Speaking in an interview with the Portuguese paper “Diario Economico” shortly before the start, on Monday of a bilateral summit between Portugal and Mozambique, Guebuza, asked how it would be possible for cooperation between the two countries to continue as in the past, replied “this summit is proof that we are more than determined to continue with our cooperation”.

Guebuza stressed that he regarded the current financial crisis in the euro zone as a challenge or new obstacle to be overcome, and which will require more daring solutions in order to continue the interchange between the two countries.

Mozambique and Portugal hold bilateral summits every year, to survey the state of their relations and to plan for the future.

Guebuza said that he is not pessimistic – instead, he is convinced that Portugal, and the rest of the euro zone, will find a solution to the current crisis. “We Mozambicans remain as optimistic as ever, now that we have more resources than before”, he added – referring to the booming coal industry in Tete province, and the recent discoveries of huge reserves of natural gas off the northern Mozambican coast.

He thought there would be advantages for Mozambique and for Portugal, if the two countries worked together to solve their problems. For instance, Mozambican mineral resources offered job opportunities for Portuguese specialists who risk unemployment in their own country.

Recruiting Portuguese technical staff would be advantageous, Guebuza added, because they face no language barrier in working in Mozambique.

The coal and gas discoveries are so enormous that, within a few years, Mozambique could become one of the greatest producers and exporters of these fuels. Since Mozambique does not have enough geologists or mining engineers of its own, the country will have to seek specialists in these areas from abroad.

The idea that Portuguese specialists could play a valuable role has been raised by other figures who have spoken to Guebuza in Lisbon, included Manuel Ferreira de Oliveira, chairperson of Galp-Energia. This is one of the partners of the Italian energy company ENI, which has made the largest gas discoveries in the Rovuma Basin, off the coast of Cabo Delgado province.

There is a long list of Portuguese companies which, despite the current crisis, want to invest in Mozambique. Apart from Galp, which has promised to invest a billion euros (1.3 billion US dollars), there is Portucel, which wants to build a paper factory, the Pestana group, which plans to invest a further 47.5 million euros in Mozambican tourism, Visabeira, which will put 1.46 million euros in tourist facilities n the Gorongosa National Park, and the Portuguese airline TAP, which intends to increase the number of its Lisbon-Maputo flights.

Portuguese exports to Mozambique increased by over 41 per cent in the last four years. According to the chairperson of the Portugal-Mozambique Chamber of Commerce, Joao Navega, the number of Portuguese companies exporting to Mozambique rose from 1,151 in 2006 to 1,520 in 2010.

During his interview with “Diario Economico”, Guebuza said he assured Portuguese Prime Minister Pedro Passos Coelho, when they met in New York, in September, that a final deal would be reached on how to dispose of the remaining 15 per cent of shares in Hidroelectrica de Cahora Bassa (HCB), which the Portuguese state still holds.

In 2007, the Mozambican state became the major shareholder in HCB, the company that operates the Cahora Bassa dam on the Zambezi river. Prior to the 2007 share purchase, Portugal owned 82 per cent of HCB, and Mozambique only 18 per cent. A bank loan was arranged which enabled the Mozambican government to buy most of the Portuguese shares. Currently the Mozambican state owns 85 per cent of HCB.

In principle, the remaining 15 per cent will be divided equally between the Mozambican company CEZA (Zambezi Electricity Company), which is a wholly owned subsidiary of EDM, the state electricity distribution company, and the Portuguese state electricity company REN.

It has been known for over 18 months that these companies would acquire the 15 per cent – it seems that the delay has been over the price of these shares.

If this sale does indeed materialize, REN will become a partner of the Mozambican state in the ambitious project to build new electricity transmission lines from the Zambezi Valley to Maputo.

Post published in: Africa News

Leave a Reply

Your email address will not be published. Required fields are marked *