Indian Prime Minister Visits Mozambique

July 7, 2016Mozambiqueby EW News Desk Team

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Prime Minister Narendra Modi will begin a four-day tour throughout Africa, with his first stop in Mozambique, according to The Tribune. The prime minister has agreed to a Memorandum of Understanding with the southern African country to double the amount of legume imports by 2021. Mozambique’s economy has struggled due to such factors as corruption and decreased donor aid from the international community.

The deal with India will provide an economic cushion that Mozambique desperately needs while giving Maputo access to a vital emerging market. In return for increased legume imports, India will provide Mozambique with seeds as well as any support the country may need. Agriculture is an important sector in Mozambique, and the deal will enhance the sector as a devastating drought may lead to food shortages in the region.

Modi aims to counter China’s growing influence in Africa, and India strives to increase investment throughout the continent. India, however, has some competition.  China has a firm business presence in Mozambique, and Maputo authorities rely on the Chinese now more than ever.

Mozambique has drawn the ire of the world community in wake of several high-profile scandals. For instance, Mozambique diverted bond funds designed to finance a fishing fleet and used it to fund the defense budget. Moreover, Mozambique admitted to accepting loans without disclosing them to the IMF.

Mozambique’s tainted history has caused donors and investors to withdraw financial support, hampering development. As a result, policymakers have pivoted to Beijing for help, but the Chinese have taken advantage of the African country’s vulnerability.

The Chinese have mostly rendered aid in the form of infrastructure projects, but Mozambique’s relationship with China is of little help as Chinese companies contract workers and materials from within instead of utilizing local talent.

Mozambican companies and workers have been left behind in the process, and the ultimate goal of China is to gain access to the nation’s precious natural resources. Maputo has substantial offshore natural gas reserves and intends to enhance its energy sector in the coming years.

India has a chance to gain a larger foothold in Mozambique, but it will take some time, as India has failed to maintain ties with the country throughout the decades. Modi’s visit will be the first time an Indian prime minister has visited Mozambique in 34 years.

With that, New Delhi can counter China’s policy by offering enticing deals that African officials can ill afford to refuse. The legume deal is a first step, but the prime minister will also address potential investments outside of agriculture, including possible development assistance within Mozambique’s energy sector, notes Business Standard.

The West shunned Mozambique temporarily, but the government is finding support among powerful emerging markets that could carry the nation forward. Transparency remains an issue, however, and it remains to be seen if leaders will commence reforms that would clean up corruption and foster truthfulness.

Mozambique not only contends with state corruption, but also corruption within the business sector, which could potentially prevent further development efforts with India. It will take some time for Mozambique to regain trust with Western powers, and it is incumbent upon authorities to learn from past mistakes and clean up their act to avoid further isolation from the world community.