Mozambique News Agency

No.131, 6th April 1998


Positive outlook for economy in 1997

Prime Minister Pascoal Mocumbi announced on 27 March the lowest rate of inflation since the introduction of IMF and World Bank sponsored structural adjustment measures a decade earlier. The rate of inflation for 1997 of 5.8 per cent beat the inflation target of 14 per cent, due in large measure to tight monetary policy by the Bank of Mozambique. The growth rate is estimated at eight per cent.

The balance of trade had improved. "We exported more and imported less than in 1996", said Mocumbi. This comes as a surprise to many given the decline in cashew nut exports (due largely to climatic factors) in 1997, and the postponement into 1998 of the resumption of electricity exports to South Africa. It had been expected that exports would decline by three or four per cent.

Turning to the major failings of 1997, Mocumbi criticised a certain slowness in reforming the public administration, and the continued tendency to rely on bureaucratic measures rather than genuine and effective means of control.

Deep rooted bureaucratic habits impeded efficient communications between the provinces and the central government he added. Officials stuck to the traditional method of sending documents by post, even in the days of electronic mail. Mocumbi advised bureaucrats to buy a modem.

Asked what measures the government was taking to protect consumers, given the invasion of the Mozambican market (particularly the informal sector) by goods that are past their sell-by date, Mocumbi said this was largely a matter of education, since laws banning the sale of goods that are out-of-date or otherwise harmful to human health are already in place.

The Prime Minister praised the work of newly formed consumer defence associations in raising public awareness, and promised that the government would improve its inspection mechanisms.

Prime Minister criticises Cahora Bassa

The government wants power from the Cahora Bassa dam to flow to the south of the country, regardless of any deal over tariffs between the dam operating company, Hidroelectrica de Cahora Bassa (HCB) and South Africa, said the Prime Minister.

The government is incensed that, despite the complete repair of the power lines, no electricity is flowing from Cahora Bassa to the south of the country, because of a dispute between HCB and the South African electricity company, ESKOM, over the price that South Africa should pay.

The last tariff adjustment was in 1988, and set a price of two South African cents (less than half a US cent) per watt. The price was purely theoretical, since no power at all was flowing to South Africa at the time, due to massive sabotage of the transmission lines by Renamo.

ESKOM wants to stick to the 1988 price, while HCB wants a substantial increase in the tariff, arguing that at the old price it will be impossible to pay off HCB's debt of about $2.6 billion, mostly to the Portuguese state. The debt was run up largely because, during the years in which Cahora Bassa was virtually paralysed, the Portuguese state bailed out what was still an overwhelmingly Portuguese company - 82 per cent of HCB is owned by Portugal.

Mocumbi saw no reason why what is essentially a dispute between Portugal and South Africa should prejudice Mozambique. The power lines exist and are fully functional, and there is thus no technical reason why electricity cannot flow to Maputo via the Apollo substation in South Africa. No new investment is needed: Cahora Bassa power could flow to South Africa, and then re-enter Mozambique along the existing Komatipoort-Maputo line.

Mocumbi wanted to reactivate the old arrangement whereby the power supplied by ESKOM to southern Mozambique is treated as Cahora Bassa power, for which the Mozambican electricity company, EDM, pays HCB in Mozambican currency. The only hard currency involved would be a rental for the use of ESKOM lines.

Currently, the electricity for southern Mozambique is ESKOM's own power, rather than recycled Cahora Bassa power, and is paid for entirely in hard currency, at a price of about $1.2 million a month.

The tariff to be paid by ESKOM was a matter for discussion in the tripartite Cahora Bassa Joint Commission, between Portugal, Mozambique and South Africa, in which Mozambique had always taken a "flexible" position, Mocumbi said.

Mocumbi also revealed that Mozambique had been "very offended" by unilateral HCB attempts to increase the tariff paid by EDM for the Cahora Bassa power used in the centre and north of the country. After negotiation, the HCB management retreated on this.

Municipal Elections

Dhlakama says Renamo wants to participate in elections

Despite threats to boycott the municipal elections scheduled for 30 June, Renamo leader Afonso Dhlakama said on 31 March that Renamo wants to take part.

Dhlakama said the "problems" which led the three Renamo-appointed members of the National Elections Commission (CNE) to boycott CNE meetings have not yet been overcome, but he believed that between them Renamo and the CNE would find a solution.

As for Renamo's threatened boycott of the elections, Dhlakama now made participation dependent on effective opposition monitoring of the electoral procedures. "The CNE has said publicly that it authorised supervision of the process by the opposition, but there is no clear definition about how this supervision should take place", he claimed.

Dhlakama praised President Joaquim Chissano, saying "he has personally tried to make things flexible, and how shown a will to find solutions to the problems".

These fairly mild statements contrast strikingly with threats by Renamo general secretary Joao Alexandre that unless Renamo can appoint staff to the electoral branch of the civil service, the Electoral Administration Technical Secretariat (STAE) at all levels, Renamo will not stand in the elections.

A strident Renamo letter to the CNE last week also demanded criminal proceedings against officials allegedly responsible for the disappearance of a small number of the 1994 electoral registers.

STAE began reconstituting the missing registers on 29 March, an exercise which should last until 13 April.

Voters whose names were on the missing registers can be identified through their voting card numbers. They are being asked to come forward and effectively re-register.

CNE warns against intimidation

The CNE has warned that any attempts to intimidate people into non-participation in the process of correcting the electoral registers may lead to court action.

The warning, contained in a CNE communique on 6 April, follows reports that some individuals, who claim to be acting in the name of what the CNE refers to coyly as "certain political parties", are inciting citizens not to cooperate in the process of correcting the registers.

The CNE also called on all political parties to take part in supervising the work of the brigades dealing with the registers.

Opinion poll in Beira

An opinion poll published on 25 March by Mediafax shows that, if municipal elections were held now, independent candidate Francisco Masquil would easily win in Mozambique's second largest city, Beira.

Masquil was governor of Sofala province from 1985 to 1994. He was a member of the Central Committee of Frelimo until he resigned on 23 March.

The polling company Gestinform asked 2,000 Beira voters who they would choose amongst the three candidates who have declared themselves in the race.

51.7 per cent said they would vote for Masquil, while only 15.6 per cent opted for the Frelimo candidate, Chivavisse Muchangage. The third candidate, Gimo Guindila, of the minuscule Mozambique Democratic Party (PADEMO) got just 0.15 per cent.

But 32.55 per cent refused to reply. Gestinform says that its margin of error was three per cent.

The problem with the poll is that it omitted the major opposition party, Renamo, altogether. If Renamo stands, it will divide the anti-Frelimo forces in Beira, and probably force a second round. Under local authority legislation, if no candidate for mayor receives more than 50 per cent of the vote, there must be a run-off between the two most successful candidates.

Frelimo condemns Archbishop

Frelimo has deplored statements by the Roman Catholic Archbishop of Beira, Jaime Goncalves, in which he clearly aligned himself with the former rebel movement Renamo in the dispute over last year's voter registration.

On Radio Mozambique on 1 April Goncalves claimed that the updating of the electoral registers in November and December was "fraudulent" and that the municipal elections "will not be free, fair or honest".

Goncalves declared he would not be voting "for those who have done nothing for Beira in 20 years".

Interviewed in Noticias on 2 April, Frelimo General Secretary Manuel Tome accused the Archbishop of waging a political campaign against Frelimo and against the government.

He noted that the Archbishop was echoing Renamo claims, but was doing so rather late, at a time when Renamo itself had largely dropped this accusation.

He found it hard to believe that Goncalves did not know the difference between fraud and irregularities.

His prediction that the elections would not be free and fair was "very serious", said Tome. "This is a statement made on an entirely speculative basis".

He added that Goncalves "should act to facilitate political processes and not as someone who is just creating another obstacle, someone who is creating another factor to disturb psychologically the electorate".

Inhambane forest under threat

The governor of the southern province of Inhambane, Francisco Pateguana, has said that the forest resources of his province are under threat of extinction from illegal loggers.

"Some tree species are being wiped out", Pateguana told AIM on 25 March, during a meeting of provincial governors, that is taking place in Maputo.

Inhambane is a supplier of various kinds of internationally appreciated hardwoods. Pateguana explained that the few licensed timber businessmen would not be a danger to the forests: the menace comes from unlicensed loggers, hacking down trees in the search for easy profit. He said that the price of some of the hardwoods is over $190 a cubic meter.

Under normal conditions, anyone who wishes to fell trees and sell the logs or make timber products, must have a license issued by the provincial or district agriculture authorities. But in the central and northern regions of Inhambane, most of the operators in the timber business are illegal, a situation that has become a thorn in the provincial government's side.

According to Pateguana, the main problem in controlling logging activities lies in the government's meagre capacity for inspection because of its shortage of human and material resources. The few existing inspectors, just one for each of Inhambane's 13 districts, are poorly trained, and do not even know the legislation concerning wild life and forestry.

Crisis in Democratic Union resolved

The crisis in the Democratic Union (UD), a coalition of three small opposition parties that holds nine out of the 250 seats in the country's parliament, the Assembly of the Republic, seems to be at an end.

Despite threats by his colleagues to sack him, the head of the UD parliamentary group, Antonio Palange, has kept his job. The upshot of a meeting of the UD deputies on 3 April was that Palange would continue to lead the group for the rest of this legislature, which should end in October 1999.

"It was a frank and open debate", Palange told AIM. "My colleagues understood that it is only human to make mistakes". Palange thus seemed to accept that the crisis was, at least in part, due to his behaviour.

The UD crisis erupted over electoral strategy. Last year the coalition expanded from three to eight members, with the inclusion of five small extra-parliamentary parties.

But the chairmen of the three original US parties - Marcos Juma of PANAMO (Mozambican National Party), Jose Massinga of PANADE (National Democratic Party), and Martins Bilal of PALMO (Liberal and Democratic Party) - had second thoughts and decided to contest the municipal elections without the other five.

Palange disagreed, and as a result two coalitions, both under the name UD, registered for the local elections.

Harsh words were spoken on both sides. Palange claimed there were "infiltrators" at work seeking to destroy the UD. Marcos Juma called on his colleagues to sack Palange as head of the parliamentary group.

But the crisis has now passed, perhaps because there is no longer any question of an eight-party UD. The five extra-parliamentary groups, tired of the UD internal dispute, have decided to form a coalition of their own, the Mozambican Multiparty Convergence (CMM), to fight the elections

The group consists of the Mozambican Independent Party (PIMO), the Democratic Renewal Party (PRD), the Patriotic Action Front (FAP), the Democratic Congress Party (PACODE) and the Mozambique National Union (UNAMO). The new coalition elected the President of the PRD, Manecas Daniel as its leader.

Singapore offers investment

The government of Singapore has about $100 million available to lend to Singapore companies interested in investing in countries of the Southern African Development Community (SADC), particularly Mozambique, South Africa, Namibia and Zimbabwe.

The funds are a way for the Singapore government to share in the investment risks, and inspire the confidence of investors.

According to Mozambican Foreign Minister Leonardo Simao, accompanying President Joaquim Chissano on his official visit to Singapore, it is now up to Mozambican businesses to propose viable projects in which Singapore companies can invest.

Currently, the volume of business between Mozambique and Singapore is not significant. Mozambican exports to Singapore amounted to $681,000 last year (cashew nuts and fishery produce), while imports of electronic equipment and a variety of other goods from Singapore stood at $7.6 million.

Canadian help for demining

Canada is to grant $7 million to help finance Mozambique's land mine clearance programme.

The money will be used in three specific areas, namely the improvement of conditions in the search for land mines, the creation of a database, and in technical assistance. The project is scheduled to take 24 months, and negotiations to set a date for its start are at an advanced stage.

The United States and Japan have also announced that they will grant $2 million for mine clearance around the Massingir dam, in the southern province of Gaza. This is estimated to cost about $3 million and it is expected that other donors willing to support the project will disburse the remaining amount.

The Massingir dam is an essential undertaking for the supply of water to the Chokwe irrigation scheme, the largest in the country.

New career structure planned for civil service

Minister of State Administration, Alfredo Gamito, said on 25 March that the government plans to introduce an entirely new career and salary structure in the civil service as from April 1999.

Gamito said that the new career structure is part of the overall reform of the public administration, and seeks to attract skilled staff into state employment, and to retain those who are already in the civil service.

But before this wholesale change in the structure, the government plans to widen wage differentials in the public administration. Staff with mid-level or higher education can expect substantial wage rises as from next month.

Gamito said that the current wage scale is very compressed. The gap between the bottom and top of the wage scale is "very small" (about 2.5 million meticais - slightly more than $200 - a month).

He admitted that the current career structure puts too high a stress on academic qualifications, and not enough on professional experience. The new system would correct this imbalance, he pledged.

Tax breaks for Aluminium smelter

The MOZAL aluminium smelter, to be built in Boane district, just outside Maputo, has been granted a package of fiscal incentives by the government. A government decree signed in December establishes the "MOZAL Industrial Free Zone", with a wide range of tax benefits.

The decree states that all materials for the building and operation of the smelter are free of customs duties, and are exempt from the pre-shipment inspection normally demanded. The imports also pay no stamp tax, handling fees, consumption tax or sales tax, "or any tax that may replace these" - a reference to the Value Added Tax (VAT) that the government plans to introduce later this year. These exemptions also extend to "support infrastructures".

MOZAL's profits will be free of corporation tax, and its workers will enjoy a 40 per cent reduction in their income tax. The MOZAL premises will also be exempt from all property taxes.

What MOZAL will pay the government is a royalty of one per cent of the gross income from sales, as from the second year of operation.

100 per cent of MOZAL's export earnings can be retained in hard currency, and the foreign investors in MOZAL can remit abroad 100 per cent of their dividends.

As for the workforce, the government imposes limitations on the number of foreigners who may be employed - a maximum of 50 per cent during the construction phase, and 15 per cent during the first five years of operation.

Agreement reached on Libombos Development Initiative

The Interior Ministers of Mozambique, Swaziland and South Africa, respectively Almerinho Manhenje, Mangosuthu Buthelezi and Prince Guduza, signed an agreement on 1 April to improve aspects related to immigration and security, in the context of the Libombos Development Initiative (IDEL), which covers the border area between the three countries.

The ministers acknowledged the need, at the level of the Southern African Development Community (SADC), to standardise border procedures, to grant exemption of visa requirements to certain categories of people, and to ease the requirements for obtaining visas.

Concerning security, the participants of the meeting committed themselves to exchange points of view on the implementation of IDEL, and agreed to include in the Initiative's implementing committee, elements of the three countries' police and security forces.

Mosagrius developing

More than 450 peasants are now working with South African farmers in the districts of Majune and Sanga, in the northern province of Niassa, under the Mosagrius agricultural programme between the two countries, according to Niassa governor Aires Aly.

Aly denied claims that the people of Niassa were hostile towards the South Africans and did not want to work with them. He described the relations between the South African farmers and the local peasantry as "excellent".

Aly said that the Mosagrius farms were currently cultivating 1,500 hectares. The crops being grown are tobacco, maize, sunflower, soya, groundnuts and beans.

Cholera reaches Tete

The first case of cholera has been reported in the western province of Tete, seventh out of the country's ten provinces to be affected by the epidemic.

Besides Tete, the disease is now affecting the provinces of Maputo, Gaza and Inhambane (in the south of the country), and Sofala, Manica and Zambezia, in the centre.

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