Economic activity will continue to grow despite demonstrations

Maputo, 11 Nov (AIM) – The governor of the Bank of Mozambique, Rogério Zandamela, claims that the country’s economic activity will continue to grow, over the next two years, despite risks and uncertainties as a result of last week’s demonstrations against the alleged fraudulent results of the 9 October general elections.

The demonstrations weres called by the independent presidential candidate Venancio Mondlane, backed by the Optimistic Party for the Development of Mozambique (Podemos). Mondlane, believed to be somewhere in South Africa, decided to abandon Mozambique after his lawyer, Elvino Dias, and Paulo Guambe, an election agent for Podemos were murdered on 19 October.

According to Zandamela, who was speaking on Friday, in Maputo, at the Consultative Council of the Bank of Mozambique, even with the islamist terrorism in the northern province of Cabo Delgado as well as the impact of the rainy season and external conflicts in the Middle East and the war between Russia and Ukraine, the country’s economy will continue to grow.

“In the second quarter of 2024, the Gross Domestic Product (GDP) grew by 4.5 per cent, influenced by the performance of the extractive industry. Economic activity is expected to continue to grow moderately, stimulated essentially by the normalization of the reference interest rate (known as the MIMO rate), and the implementation of projects in key sectors such as energy, transport and the extractive industry”, he said.

Zandamela also believes that inflation will remain stable at around one digit over the short and medium term.

“The institution also expects the country’s net international reserves to remain at comfortable levels to cover imports. Annual inflation has continued to decelerate, standing at 2.5 per cent last September after five per cent in December 2023. This year, the central bank began the cycle of normalizing the monetary policy reference rate, which in the first nine months of the year alone was reduced by 375 base points to 13.5 per cent”, he said.

He also said that this year the central bank adopted the new series of Metical notes and coins, with the aim of making the notes and coins more secure and resistant, as well as improving identification for the visually impaired. The change is aimed at making the financial system more secure, modern and inclusive.

“Through the introduction of new technologies and the modernization of payment infrastructures, we have ensured interoperability between e-money institutions and banks, resulting in a significant increase in financial inclusion, which has led to 99 per cent of the adult population having accounts with e-money institutions by September 2024, compared with 69 per cent in December 2022”, he said.
(AIM)
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