MAPUTO: An unprecedented wave of militant attacks in northern Mozambique has raised fears the country will fail to fully cash in on a gas bonanza.
After 180 trillion cubic feet (5.1 trillion cubic meters) of natural gas were discovered off the country’s northeastern shore, Mozambique entertained dreams of following Qatar down the path toward wealth. The government even predicted that by 2035, the country’s GDP per head could increase sevenfold.
But the southeast African country’s golden vision has been thrown into doubt by an explosion of bloodthirsty assaults by a shadowy militant group in the region where the industry plans to base its hub.
Since October, more than 30 people have been killed in brazen assaults on unarmed villagers.
Security forces have rushed reinforcements to be area yet seem powerless to stem the attacks. Terrorized, many civilians have fled their homes and a cloud hangs over the great expansion plans.
US oil and gas giant Anadarko, the largest exploration company in the region, has invested $4 billion (3.4 billion euros) so far — it plans to put in $20 billion over the lifetime of the gasfields.
But following a US embassy alert on June 8 that warned of an imminent attack on the regional gas hub Palma, Anadarko temporary suspended some activities and moved affected workers and contractors to a secure site.
Canada’s Wentworth Resources has already suffered delays to its projects as a result of the insecurity, forcing it to seek a year-long extension for its initial exploration.
In its successful application to the authorities, Wentworth said the attacks had “prevented safe access to the area for Wentworth staff and contractors.”
There have been more than 10 attacks on villages since October, featuring beheadings and arson. None has targeted gas operations.
“Due to the attacks, we took additional measures to protect not only the oil and gas companies operating in that area, but also to protect the communities,” said Joaquim Sive, the police commander in Cabo Delgado.
Eric Morier-Genoud, a researcher at Queen’s University Belfast, said any attack against the gas “majors” would be an “escalation from which the militants would come out the losers.”
“At this point... based on the information we have, we classify the attacks as an insignificant risk to the economy,” Rogerio Zandamela, the governor of Mozambique’s central bank, told AFP.
In contrast to this, the central bank did consider a spate of attacks carried out by a militia loyal to the main opposition Renamo party in the country’s center in 2015 and 2016 as an economic risk.
“There was much more clarity about the conflict in central Mozambique... We cannot equate the north with the south,” Zandamela said. “The information available on the conflict in Cabo Delgado is very limited.”
Police have stepped up security around gas projects — particularly those close to areas that have come under attack, national police spokesman Inacio Dina told AFP.
An official at Anadarko, who declined to be named, said “There have been no threats specific to our project. However, it is a cause for concern, and therefore, as operations continue, we have undertaken appropriate measures.”
The company has a gas operations camp in a forest on the Afungi Peninsula.
Police and army units have established a command post in the forest following the attacks.
But a source at Anadarko told AFP that the firm has also stepped up its own security efforts, increasing its private protection force by two-thirds — a move that will have an impact on costs.
Despite such problems, foreign investors for now still have a big appetite for a share of Mozambique’s gas treasures.
Japan’s Tokyo Gas and Britain’s Centrica inked supply deals with Anadarko on June 15 — just a day after a machete attack on the village of Ibu.
Even so, experts say the instability in the northeast could still prove costly. It could cut into the dividend that Mozambique expects from the huge find.
“(The gas projects) are at risk in their early stages, as attacks can adversely affect logistics. Materials must reach Palma by land,” said Maputo-based political science researcher Joao Pereira.
“The insurgency is most likely to delay rather than derail development of the sector,” said Ed Hobey-Hamsher, an analyst at global risk consultancy Verisk Maplecroft.
“Attacks will certainly make the investment more expensive because of security needs reducing revenues for the state.”
Mozambique’s gas-fueled future threatened by militants
Mozambique’s gas-fueled future threatened by militants
- An unprecedented wave of militant attacks in northern Mozambique has raised fears the country will fail to fully cash in on a gas bonanza
- Since October, more than 30 people have been killed in brazen assaults on unarmed villagers
IMF raises its growth forecast for Saudi economy to 6 percent in 2025
RIYADH: The International Monetary Fund has raised its expectations for Saudi Arabia’s economic growth in 2025 to 6 percent – up from 5.5 percent predicted earlier this year.
In its latest report, the IMF also noted that the Kingdom’s output will grow by 2.6 percent in 2024, down 0.1 percent compared to the previous projection.
The financial institution added that the overall economic growth in the Middle East and Central Asian region is projected at 2.8 percent and 4.2 percent in 2024 and 2025, respectively.
Earlier in April, the World Bank also raised the growth prospects of the Kingdom’s economy to 5.9 percent in 2025, up from an earlier projection of 4.2 percent.
Taming inflation should be a priority
According to the IMF, global economic growth, which is estimated at 3.2 percent in 2023, is projected to continue at the same pace in 2024 and 2025.
The report further pointed out that global headline inflation is expected to drop 5.9 percent this year after 2023’s 6.8 percent average.
However, the IMF warned that it is still too early to declare victory in the fight against inflation.
“Bringing inflation back to target should remain the priority. While inflation trends are encouraging, we are not there yet. Somewhat worryingly, progress toward inflation targets has somewhat stalled since the beginning of the year. This could be a temporary setback, but there are reasons to remain vigilant,” said IMF Economic Counsellor Pierre-Olivier Gourinchas.
He added: “Most of the good news on inflation came from the decline in energy prices and in goods inflation. The latter has been helped by easing supply-chain frictions, as well as by the decline in Chinese export prices. But oil prices have been rising recently in part due to geopolitical tensions and services inflation remains stubbornly high.”
Global economic recovery differs by region
According to the report, the global economy was resilient in 2023, but these gains were felt differently as low-income countries continued to experience the after-effects of the pandemic.
“We now estimate that there will be more scarring for low-income developing countries, many of which are still struggling to turn the page from the pandemic and cost-of-living crises,” said Gourinchas.
The IMF also called on countries to rebuild their fiscal buffers to help protect their sovereign debt levels, which will help them reverse the decline in medium-term growth prospects.
“Going forward, policymakers should prioritize measures that help preserve or even enhance the resilience of the global economy. The first such priority is to rebuild fiscal buffers. Even as inflation recedes, real interest rates remain high and sovereign debt dynamics have become less favorable,” he added.
Pakistan pushes to forge strategic, economic partnership as Saudi FM visits Islamabad
ISLAMABAD: Pakistani top leaders, including the prime minister, president and foreign minister, said on Tuesday the ongoing visit of Saudi Foreign Minister Prince Faisal bin Farhan to Islamabad would help transform a longstanding friendship between the two nations into a strategic and commercial partnership.
Prince Faisal arrived in Pakistan on Monday on a two-day visit aimed at enhancing bilateral economic cooperation and pushing forward previously agreed investment deals. His trip comes a little over a week after Crown Prince Mohammed bin Salman met Prime Minister Shehbaz Sharif in Makkah and reaffirmed the Kingdom’s commitment to expedite investments worth $5 billion.
Pakistan and Saudi Arabia enjoy strong trade, defense and cultural ties. The Kingdom is home to over 2.7 million Pakistani expatriates and the top source of remittances to the cash-strapped South Asian country.
“We aim to transform our traditionally fraternal ties into a strategic and economic partnership,” Foreign Minister Ishaq Dar said as he addressed a Pakistan-Saudi Arabia Investment Conference in Islamabad, held under the umbrella of Pakistan’s Special Investment Facilitation Council, set up last year to oversee all foreign investments.
“Your investments are not just financial commitments but are crucial in nurturing a deeply valued partnership,” Dar told the visiting dignitary.
“It is through the SIFC platform that we intend to streamline investment processes while ensuring rapid decision making and efficient handling of investments … The SIFC has a central role in augmenting our infrastructure and streamlining our regulatory frameworks to set the stage for a flourishing investment friendly economic environment.”
Dar said SIFC would ensure that investments were “swift and mutually beneficial, embodying our commitment to facilitating foreign direct investment in Pakistan.”
Pakistan was blessed with fertile agricultural lands, minerals and a large and dynamic population, complemented by a flourishing IT sector and abundant prospects for renewable energy creation, the foreign minister added.
He said Pakistan’s fertile lands and a vast network of water resources presented numerous investment opportunities in agri-tech and food processing, with the South Asian nation having the potential to become the region’s food basket.
“Our mining sector is marked by untapped potential especially in the expansive Tethyan belt known for its abundant deposits of copper, gold and other valuable minerals,” Dar said. “The strategic advancements in these areas are highlighted by projects such as Riko Diq copper [and gold] project which exemplifies our commitment to leveraging our natural resources for mutual benefit.”
On Sunday, Pakistani state media reported Saudi Arabia was likely to invest $1 billion in the mine project in Pakistan’s southwestern Balochistan province, one of the world’s largest underdeveloped copper-gold areas.
The foreign minister said Pakistan’s goal was to transform the country into a hub of economic activity, and innovation and create an attractive environment for global investors like Saudi Arabia.
“Investing in Pakistan is not merely a placement of capital. It would actually be instrumental toward forging a partnership that promises mutual prosperity and progress,” he concluded.
“Your engagement and investment in Pakistan will be handled with utmost respect and institutionalized commitment from our side, ensuring that together we achieve remarkable success.”
MEETINGS WITH PM AND PRESIDENT
Prince Faisal also met Pakistani PM Sharif on Tuesday who said the Saudi official’s visit would herald a new era of strategic and commercial partnerships between the two long-time allies.
“The visit is the beginning of a new era of strategic and commercial partnership between Pakistan and Saudi Arabia,” Sharif was quoted as saying in a statement from his office after he met Prince Faisal. “Pakistan wants to further promote cooperation in the fields of trade and investment between the two countries.”
The PM said Pakistan was taking steps to promote foreign investment and make partnerships “mutually beneficial” for allies, adding that Islamabad was grateful to the Saudi leadership for increasing investment.
Informing the Saudi delegation about the wide potential of investment in Pakistan, Sharif briefed them about the Special Investment Facilitation Council and measures the body was taking to promote investment.
Sharif also invited the Saudi crown prince to Islamabad.
“The people of Pakistan are looking forward to the visit of His Highness the Crown Prince Muhammad Bin Salman to Pakistan,” the PM’s office said.
President Asif Ali Zardari and Prince Faisal also met on Tuesday and reiterated the two nations’ resolve to build a strong partnership and promote mutually beneficial economic cooperation.
Zardari said Pakistan was working to transform its long-standing and decades-old relationship with Riyadh into a “long-term strategic and economic partnership.”
The two sides also discussed regional dynamics and recent developments in the Middle East and called for an immediate and unconditional ceasefire in Gaza and an end to Israeli air and ground offensives there.
INVESTMENT PUSH
In a statement shared with media on Monday, the Pakistan information ministry said the Saudi delegation would consult with Pakistani officials “on the next stages of investment and implementation issues.”
Saudi Arabia’s planned investment in the Reko Diq gold and copper mining project would be discussed during the visit, the ministry said, adding that Riyadh was also interested in investing in agriculture, trade, energy, minerals, IT, transport and other sectors in Pakistan:
“As a result of this visit, Pakistan’s export capacity will increase, joint ventures will be launched and new opportunities will be paved.”
Cash-strapped Pakistan desperately needs to shore up its foreign reserves and signal to the International Monetary Fund (IMF) that it can continue to meet requirements for foreign financing that has been a key demand in previous bailout packages. Pakistan’s finance minister, Muhammad Aurangzeb, is currently in Washington to participate in spring meetings of the International Monetary Fund and World Bank and discuss a new bailout program. The last loan deal expires this month.
Saudi Arabia has often come to cash-strapped Pakistan’s aid in the past, regularly providing it oil on deferred payments and offering direct financial support to help stabilize its economy and shore up its forex reserves.
Last year, however, Saudi Arabia’s finance minister said the Kingdom was changing the way it provides assistance to allies, shifting from previously giving direct grants and deposits unconditionally and moving toward mutually beneficial investment deals backed by internal economic reforms.
The PM said Pakistan was taking steps to promote foreign investment and make partnerships “mutually beneficial” for allies, adding that Islamabad was grateful to the Saudi leadership for increasing investment.
Informing the Saudi delegation about the wide potential of investment in Pakistan, Sharif briefed them about the Special Investment Facilitation Council and measures the body was taking to promote investment. The body was set up last year to oversee all foreign funding.
Sharif also invited the Saudi crown prince to Islamabad.
“The people of Pakistan are looking forward to the visit of His Highness the Crown Prince Muhammad Bin Salman to Pakistan,” the PM’s office said.
Diriyah Co. CEO appointed UN Tourism ambassador
RIYADH: Saudi historical destination developer Diriyah Co.’s CEO, Jerry Inzerillo, has been appointed as a UN Tourism ambassador, joining an elite group including Lionel Messi, Georgio Armani, and Placido Domingo.
The appointment was made during the global body’s first-ever sustainability week, being held in New York from April 15 to 19, according to a press statement.
Inzerillo has been honored for his “lifelong commitment” to employing “innovative design and development strategies” that bolster local communities and cultivate new and undiscovered tourism destinations, it added.
“The UN Tourism is enormously proud to welcome Inzerillo as our newest tourism ambassador. In this new role, he will help to amplify the UN Tourism’s key messages of the ability of tourism to drive change and achieve sustainable growth,” said Secretary-General Zurab Pololikashvili.
Diriyah is located on the outskirts of the Kingdom’s capital city, Riyadh. At its core is the UNESCO World Heritage Site of At-Turaif, the historic capital of the First Saudi State.
Upon completion, the Diriyah project will host 100,000 residents, workers, students, and visitors, offering a diverse range of cultural, entertainment, retail, hospitality, educational, and residential spaces.
Developing tourist destinations like Diriyah is crucial for Saudi Arabia, as the Kingdom pursues economic diversification, in line with the goals outlined in Vision 2030.
“In the area of tourism, we have the privilege to work in one of the world’s fastest growing sectors that employ 320 million people today and will add a further 100 million within the next decade. But with that privilege comes enormous responsibility to ensure that our developments are innovative, actionable and have real and enduring impact,” said Inzerillo.
Spearheaded by Inzerillo, Diriyah Co.’s development strategies adhere to the highest international sustainability, preservation, and conservation standards. They aim to support the mobility, health, and well-being of the local community.
“A key part of our master planning strategy is that our commitment to sustainable practices must also extend beyond the day-to-day operations of Diriyah Co.,” he added.
In January, Inzerillo told Arab News that Riyadh will be undergoing consistent transformative change “every year” that will allow visitors and residents to feel a palpable difference.
He added that visitors to the Kingdom’s capital do not need to look forward to 2030 to begin to witness the changes that the tourism sector is undergoing.
Formerly known as the World Tourism Organization, UN Tourism is a global agency responsible for promoting responsible, sustainable, and universally accessible tourism.
As a leading international organization, it advocates for tourism as a catalyst for economic growth, inclusive development, and environmental sustainability.
Closing Bell: Saudi benchmark index edges down 1.64% to 12,500
RIYADH: Saudi Arabia’s Tadawul All Share Index shed 207.91 points or 1.64 percent on Tuesday to close at 12,500.43.
The total trading turnover of the benchmark index was SR10.22 billion ($2.72 billion), with 42 stocks advancing and 186 declining.
Nomu, Saudi Arabia’s parallel market, also lost 239.21 points to close at 26,309.38. The MSCI Tadawul Index shed 31.821 points to 1,578.42.
The best-performing stock was Red Sea International Co. The firm’s share price soared by 10 percent to SR33.
Other top performers were Etihad Atheeb Telecommunication Co. and Saudi Steel Pipe Co., whose share prices surged by 6.57 percent and 4.59 percent respectively.
Meanwhile, ACWA Power’s share price hit SR427 on Tuesday, an all-time high since the company’s listing on the main market. However, the company closed its trading at SR417.
The worst performer of the day was Advanced Petrochemical Co., as its share price dipped by 5.30 percent to SR42.90.
On the announcements front, United Electronics Co. revealed that its net profit for the first quarter of this year climbed 11 percent to SR93.9 million.
In a Tadawul statement, the company, also known as eXtra said that the rise in net profit was driven by a 10 percent year on year rise in total revenues.
Meanwhile, Al-Moammar Information Systems announced that its board of directors has recommended the payment of a cash dividend at 8 percent of capital, or SR0.8 a share for the first quarter of 2024.
Moreover, the company’s board also recommended a three-year dividend policy until 2026.
“The policy will be submitted for approval at the upcoming general assembly meeting, the date of which will be announced later. The policy aims to maintain a minimum dividend per share of 50 percent of net profits annually,” said Al-Moammar Information Systems in a statement.
Saudi companies to attend energy conference in Dubai
RIYADH: Comprehensive knowledge sharing is set to unravel at Dubai’s Middle East Energy conference, with over 17 Saudi companies participating in the event.
The gathering, hosted at the Dubai World Trade Centre starting April 17, highlights the Middle East and Africa’s most extensive energy event, now in its 49th edition.
A rescheduling to include an additional day on April 19 follows unexpected adverse weather conditions that led to pushing the event’s opening day from April 16 to April 17.
This year, the Middle East Energy conference will expand across 14 halls, covering 28,500 sq. meters and will welcome more than 1,500 exhibitors and feature 14 national pavilions, showcasing the breadth of the global energy sector.
Saudi Arabia is well-represented, with companies like Bahra Advanced Cable Manufacture Co. Ltd., Jeddah Cables Co., and Riyadh Cables Group Co. leading the contingent.
Other participants include MEMF Electrical Industries Co., Electrical Industries Co., and International Tube & Conduit Co. Ltd.
The conference will also feature Middle East Specialized Cables Co., Red Sea Cable Co., and United Transformers Electric Co., alongside Al-Haitam for Industries & Economic Development and Asharqiyah Cables Co. for Industry.
With more than 250 speakers and three high-level strategic conferences, including the leadership summit, technical seminars, and the Intersolar and Electrical Energy Storage Middle East conference, the event promises crucial insights into energy transition, real-world solutions, and emerging challenges in sustainability and cybersecurity.
These dialogues are key as the sector seeks to transform rapidly to meet global energy demands responsibly.
Industry experts believe the region plays a significant role in the road to net-zero.
