Mozambique has made great progress since the end of the 16-year civil war in 1992 and peace has generally been restored. However tensions between former enemies FRELIMO (Mozambique Liberation Front), the current leading government party, and RENAMO (Mozambique National Resistance), the opposition-turned rebel group, still characterise the political sphere. As of April 2013, tensions have been spilling over into violent clashes between RENAMO and government troops, together with strategic attacks by RENAMO on cargo, road and rail traffic, and commercial assets. These recent attacks resulted in cancellations of tourist reservations, a temporary suspension of Rio Tinto’s coal mining operation along the targeted Sena railway line and interruptions across a key north-south highway. Since May 2013 the two parties have been engaged in negotiations concerning RENAMO’s demands, including the revision of electoral law. Yet, its main objective is being fully integrated into the government and opening-up access to lucrative commercial sectors (mining, LNG, timber). In response to FRELIMO’s rejection, RENAMO will boycott the November 2013 municipal election and general elections in 2014. On October 21, RENAMO raised concerns over a revival of civil war by unilaterally annulling the 1992 peace agreement which ended the civil war two decades ago, as a last attempt to force concessions from the government.

Impact on country risk

RENAMO does not have the capacity to reignite civil war as it lacks resources, external support and organisational structure, while there is no popular appetite for a conflict. It has moreover steadily lost its political support and weight as major opposition party. Henceforth, even if RENAMO would not boycott the elections, it would probably be replaced as largest opposition party by MDM (Democratic Movement of Mozambique), founded in 2009 by dissatisfied RENAMO breakaway elements. Consequently, it is possible for RENAMO to cease to exist as a political party after the coming elections and to take its final turn towards guerrilla violence. The boycott is expected to prompt a stepping-up of RENAMO’s armed wing offensive through increased hit-and-run attacks on government assets, while the superior army and police forces will try to prevent damage to cargo and the Sena railway line. Sporadic attacks will mainly affect the Sofala Province as the military deployment across this region poses a barrier against geographic spill-overs. Even though a return to civil war is not to be expected, ONDD will most likely downgrade Mozambique’s war risk classification from 3/7 to 4/7, because of the growing frequency of violent attacks. The stakes are high for Mozambique’s booming economy, particularly with upcoming investments required by foreign companies in the enormous gas and coal reserves.

Analyst: Louise Van Cauwenbergh, l.vancauwenbergh@credendogroup.com