The cotton industry, a significant source of income for locals, is under peril, putting thousands of farmers’ ability to sell their crops at risk. As a result, the insurgency in Mozambique’s Cabo Delgado province may be beginning a new, catastrophic spiral.
The cotton industry in Cabo Delgado has been unstable for a while. The largest concession holder in the province, the British company Plexus Cotton, required a $2 million government bailout in 2020 in order to pay farmers and its striking employees.
But now the company says the insurgency in the region, inspired by Islamist fundamentalists as well as by poverty and inequality, is making conditions too dangerous to work, and banks will no longer lend to businesses in the province.
“We have a farming base in Cabo Delgado of about 165 000 farmers, all of whom have about seven dependants,” said Nick Earlam, Plexus’s chief executive, in London late in June.
Pointing out the company services about 900 villages in the province, he lamented that banks in Maputo, at the opposite end of the country, do not want “to fund agriculture in Cabo Delgado, or the security capability to protect the crop”.
“In a few days we are going to close down,” Earlam warned.
A former agricultural banker in Mozambique confirmed, as far as he was aware, “Mozambican banks do not provide any loans or overdraft to companies in Cabo Delgado”.
Three of the areas where Plexus operates, Ancuabe, Meluco and Chiure, have seen “frightful insurgent attacks,” Earlam said. “Our staff are reluctant to go out without proper security,” he said, adding that their intelligence suggested that the problem will continue to get worse.
But if Plexus can’t buy this year’s harvest, that will create “50 000 angry farmers and their families to add to the discontent”.
Earlam’s statement has been seen as an attempt to hold the government hostage. “It smells of blackmail,” wrote Marcelo Mosse, editor of the online news site Carta de Moçambique. The state news agency AIM described Earlam’s comments as “less than honest”, pointing out that most of the cotton in Cabo Delgado is in the province’s southern districts, which have been the least affected by Islamist militants.
“Plexus is in serious financial difficulties, which have nothing to do with security,” AIM wrote.
Wherever the blame lies, farmers in the province are worried. Artimiza Fernando has always farmed the land, selling cotton as part of an association in Cabo Delgado “It was worth getting paid late, but now that they are going, as I heard, will they pay what they still owe us?” she asked. “What will become of our children? The government has to help us otherwise we will starve to death.”
While farmers will still have their subsistence crops, the loss of income from Plexus might be felt even more keenly in other parts of the province.
“The shop owners that sprang up in production areas will not have a market,” said one farm owner. “Wholesalers in town will lose [a] substantial part of their sales. We already see a drastic decline in buying power all over the north.”
Badru Selemangy is also desperate at the news of the company’s departure: “Cabo Delgado is cursed.”
Plexus might pay what it owes, even after delays, but if the company leaves, he said, “all that’s left is for al-Shabaab to come and cut our necks”.
Or they might be compelled to join the insurgency — which could now spiral further out of control.