Here’s how much growing Islamist insurgency could cost the Mozambican economy

The growing Islamist insurgency in Mozambique's Cabo Delgado province has raised concerns about the country's stability and economic growth. Menzi Ndhlovu, Senior Analyst at Signal Risk, and Ridle Markus, Africa Strategist at Absa Corporate & Investment Banking, recently discussed the situation on CNBC Africa, shedding light on the escalating violence and its potential impact on the Mozambican economy. Menzi Ndhlovu highlighted the recent attack in Palmer, where a significant number of militants targeted the town from multiple directions. The insurgents, disguised as civilians, caught the army off guard and managed to infiltrate the town before launching the assault. Despite the army's counteroffensive operations, some militants remain at large, posing a continued threat to the region. The lack of a coordinated response from the Mozambican government has highlighted the challenges in tackling the insurgency effectively. Ridle Markus emphasized the economic repercussions of the ongoing violence, particularly on major projects such as those led by Total, A&I, and ExxonMobil. Total's decision to evacuate staff and suspend operations underscores the immediate risk to project timelines and investment. The suspension of these projects not only hampers Mozambique's short-term growth prospects but also raises doubts among investors about the country's ability to ensure security for large-scale initiatives. The discussion further delved into the regional security implications of the insurgency, with Menzi Ndhlovu addressing the role of neighboring countries in supporting Mozambique. While there have been calls for international assistance, Mozambique's reluctance to accept external intervention has hindered efforts to contain the violence. The heightened global attention on the insurgency, coupled with rising pressure from international partners, may compel Mozambique to reconsider its stance and seek support from regional and international allies. In light of the economic uncertainty brought about by the insurgency, the analysts emphasized the need for swift and decisive action to safeguard investment interests in Mozambique. The country's attractiveness as an investment destination hinges on its ability to address security concerns and create a conducive environment for business growth. With billions of dollars in potential investments at stake, ensuring stability in Cabo Delgado province is crucial for unlocking Mozambique's economic potential. Despite the challenges posed by the insurgency, there remains hope that Mozambique can overcome the security threats and create a resilient environment for sustainable development. By engaging with regional partners, accepting international support, and implementing effective counterinsurgency measures, Mozambique can mitigate the risks posed by the escalating violence and pave the way for long-term economic prosperity.