IMF pressure may force out investors

Investors in Mozambique’s sugar industry might withdraw if the government yields to pressure from the International Monetary Fund (IMF) to cut protection for domestically produced sugar, media reports said on Thursday.

One of the sugar factories to be affected would be Marromeu sugar mill on the south bank of the Zambezi River. The mill has been rehabilitated by the Sena Company, in which a Mauritian consortium holds majority shares. Sena’s manager, Anton de Wal, whose consortium is the largest investor in the sugar sector, said: “We will close our doors in Mozambique.”

He said investors were reluctant to put any more money into Marromeu, since they did not know the government’s position on IMF demands. The investors “want to finance the industry within a normalised situation,” he said.

The Sena Company had envisaged a total investment of over US $100 million in Marromeu. So far it has spent US $26 million dollars on repairs to the factory and rehabilitation of 2,000 hectares out of the 13,000 hectare plantation. But if the IMF has its way, De Wal said Mozambique would not see the rest of the money.