Posted: January 25th, 2016

Would it be an exaggeration to say that Mozambique is in danger of becoming a colony of South Africa, in economic terms at least?

Is the project really going to be advantageous for Mozambique? The project will be largely owned by two large South African entities. The key resources, bauxite and electrical power, will be supplied by South Africa. Some of the financing will come from South Africa. The project will certainly create jobs during the construction period – but not very many once the smelters are actually running. Also, the project sponsors will probably want to keep the project’s reported profits low through tax-reducing transfer payment policies, and any dividends will go mostly to investors resident elsewhere.

Would it be an exaggeration to say that Mozambique is in danger of becoming a colony of South Africa, in economic terms at least?