Mozambique News Agency

No.144, 8th October 1998


Consultative group meets 1999 financing needs

The World Bank's Consultative Group on Mozambique, which brings together the main donors and funding agencies that support the economy, has met for the first time in Maputo rather than in the World Bank's Paris offices. The meeting ended on 25 September with a statement announcing confidence that the economy's external financing needs for 1999 will be met in full, estimated at $570 million, excluding debt relief.

The World Bank statement expressed support for the government's request that foreign aid move away from isolated projects, and focus instead on "multi-year sector programmes".

Prime Minister warns of structural poverty

The major challenge facing Mozambique is the struggle against "structural poverty", Prime Minister Pascoal Mocumbi said on 23 September in his opening address to the Consultative Group.

Mocumbi described poverty as "an atrocious reality, particularly in the countryside, where 80 per cent of the population lives". He also warned that "reducing regional asymmetries cannot be delayed. More just and equitable access to the results of economic development shall merit our attention".

He pledged that the government would allocate increasing resources to the health and education services. He stressed that improving the quality of education went alongside increasing the number of schools.

The Prime Minister said the government was committed to establishing a favourable environment for investment and business activities, through such measures as streamlined licensing procedures, decentralised decision-making, and the removal of "barriers imposed by superfluous red tape".

But Mocumbi also pointed out that the public administration must play a crucial role in development, and that this would not be possible unless the conditions of service improved.

Mocumbi said that macro-economic stabilisation was now a fact, and that made it possible to discuss medium term prospects. For the first time in such a meeting, the government is looking beyond the next 12 months: the development programme which it has put before the Consultative Group spans the period 1998 to 2003.

Poverty statistics published

Sixty nine per cent of the population are living below the poverty line, Planning and Finance Minister Tomas Salomao said on 23 September, in a detailed economic briefing given to the Consultative Group.

This level of poverty, blamed by Salomao on the effects of the war of destabilisation, is among the worst in Africa.

Poverty is reflected in rudimentary agricultural techniques. Mozambican peasants have an average of 0.4 hectares of land each, or 2.4 hectares for a family of six, said Salomao. But only nine per cent use any kind of agricultural machinery, only seven per cent use traction (mechanical or animal), and only two per cent use fertilisers or pesticides.

As for access to clean water, only seven per cent of Mozambicans have piped water in their homes, said Salomao. Even in the cities, this figure rises to only 30 per cent. 58 per cent have access to a man-made water source such as a well or borehole, while the other 35 per cent draw their water from rivers or lakes.

Rural dwellers are still faced with a long walk to basic services - on average a rural Mozambican must walk 46 kilometres to reach the nearest doctor, 66 kilometres to the nearest secondary school, and 48 kilometres to the nearest telephone. Even the average distance to a market is 16 kilometres.

The effort made since the end of the war to rebuild the primary school network, however, means that children only have an average walk of five kilometres to reach their primary school.

The key to successful development in Salomao's eyes lies in expanding the education system. He said that since the end of the war in 1992 the number of pupils studying in the seven grades of primary education had increased by 56 per cent. A further 44 per cent increase was expected up until 2002. This means that, in the space of a decade the primary school population would have more than doubled to about three million.

However, these targets will require building 12,700 new classrooms and recruiting a further 18,000 teachers. That should ensure that, by the year 2002, 86 per cent of children of aged six to 11 (the first five years of primary education) are actually attending school.

The percentage of the state budget spent on education has rapidly increased: but Salomao pointed out that in 1988 these funds "covered only 66 per cent of total needs".

The government's strategy to deal with the shortage of money is essentially a two tier education system: private education for those who can afford it, state education for those who cannot. The funding gap for the government's educational programme is $9 million in 1999, rising to $30 million in 2002.

As for health care, the government wants to ensure that the national health service reaches 70 per cent of the population by 2001. That will require a further 350 to 400 new health units. Other key targets are to reduce infant mortality from 135 to 120 per 1,000 live births, and to raise the rate of vaccination against diphtheria, tetanus and whooping cough from last year's figure of 63 per cent to 80 per cent.

However, the health sector programme for the next five years is seriously underfunded. The funding gap is $28 million this year, and $38 million next year.

The Finance Minister pointed out that water charges in the cities "do not even cover running and maintenance costs". Furthermore, a shocking 60 per cent of the water either leaks away or is not charged for.

The government plans to privatise the management of the water supply companies in the five major cities of Maputo, Beira, Nampula, Quelimane and Pemba. Salomao hoped this would reduce water losses to 25 per cent and lead to "a more rigorous attitude in charging for water".

Water tariffs "will be increased to make the system sustainable, so as to cover costs and 50 per cent of the amortisation of capital", he warned.

The road building and maintenance programme will cost about $135 million each year, which leaves a funding gap for next year of $31 million.

Likewise with PROAGRI, the government's five year programme for public investment in agriculture. It will cost $202 million, of which $182 million must come from foreign aid.

Business calls for delay in VAT

Representatives of the private sector on 24 September urged the government and its international partners to delay the introduction of Value Added Tax (VAT) by nine months.

The appeal was made at the Consultative Group meeting. For the first time sessions were scheduled at which the Group could hear the opinions of Mozambican private businesses and NGOs

The Confederation of Mozambican Economic Associations argued that VAT should be introduced on 1 January 2000, and not on 1 April 1999, as the government currently plans.

The Confederation stressed that business supported replacing the current sales and consumption taxes with a VAT, but believed that the government timetable was quite unrealistic.

The Confederation also stressed the damaging effect of high interest rates. Currently the lowest interest rate available when borrowing in local currency from a Mozambican commercial bank is 19 per cent (the prime rate offered by the Austral Bank, which is dominated by Malaysian capital).

The other banks, all effectively Portuguese owned, charge 25 per cent or more. They have ignored repeated cuts in the central bank's rediscount rate, which now stands at 9.95 per cent, while the rate of inflation has fallen so dramatically, that it is now negative. Between January and July the Consumer Price Index in Maputo registered an average price reduction of 2.7 per cent.

NGOs warn of poverty

Mozambican non-governmental organisations have warned that the improvement in Mozambique's macro-economic indicators has not translated into improvements in the well-being of ordinary Mozambican citizens.

They presented their views in a paper delivered to the Consultative Group on 24 September. Positive macro-economic results, they said, are still not reflected in the lives of the most vulnerable low income strata, the people in the more remote rural areas, and even in urban zones - particularly women, children, old people and the disabled.

The NGOs pointed out that the level of chronic malnutrition remains above 40 per cent in some areas, with the nearest health post some 40 kilometres or more distant.

They denounced the "nefarious consequences" of the government's privatisation programme for depriving thousands of workers of their jobs. And those lucky enough to have jobs in privatised factories were often not paid their wages.

The NGOs called on the government and its international partners to design well-thought out policies to ensure that the benefits from macro-economic gains, and from the HIPC (Heavily Indebted Poor Countries) debt relief initiative, lead to "tangible improvements in the life of the poorest communities".

Sappers end Maputo training course

A course in land mine clearance, which provided training for 60 soldiers of the Mozambique Defence Force (FADM), ended on 5 October in the locality of Boquisso, about 20 kilometres west of Maputo.

The course, given by United States experts, took 45 days and cost about $750,000, granted by the United States government.

The trainees were selected from various military units across the country, and were taught to become trainers themselves.

Since 1993, the United States has spent $24 million on mine clearance projects in Mozambique.

US assistance for Mozambique

Mozambique and the United States signed three agreements on 6 October under which the US government is to grant a total of $134 million to support development programmes over the next three years. Of this, $32 million will be spent in the first year.

The money is to be used in projects covering rural development, health and improvements in trade and investment. The rural development programme will be allotted $64 million to increase income in the countryside through improved roads and road maintenance, more effective financial services for small businesses, and increased sustainable agricultural production. It includes $15 million to support the government's five year programme of public investment in agriculture, PROAGRI.

The health sector has been allotted $60 million to help the health ministry improve its management systems, particularly concerning mother and child health care.

The third package, amounting to $10 million, will support an increased private sector role in prioritising needed policy and regulatory reforms, a Value Added Tax (VAT) information campaign, and will finance continued expansion of the Internet.

The funds will be channelled to the Mozambican government through the United States Agency for International Development (USAID).

Danish aid increases

Denmark is to increase its financial assistance to Mozambican socio-economic development programmes to about $50 million a year. Up until this year, Denmark's aid to Mozambique has been running at about $40 million annually.

Holger Bernt Hansen, who is heading a delegation of the Danish International Development Agency (DANIDA), said that "we are very impressed with the work Mozambique is carrying out to reduce poverty".

"In the years to come, we will increase our financial assistance, meant particularly for the education and health sectors, which are the most important for development", said Hansen, after a meeting with Mozambican Prime Minister Pascoal Mocumbi.

British support for education

Up until the year 2000, Britain will grant Mozambique $5.1 million as its contribution to the government's strategic plan for education, which seeks to ensure increased access to schooling and improved quality of education.

Education Minister Arnaldo Nhavoto described his week long visit to Britain as "very good" in terms of establishing contacts that can help ensure implementation of the government's plans for the sector.

Head of armed forces promoted

President Joaquim Chissano on 25 September promoted the chief of staff of the Mozambican Defence Force (FADM), Lagos Lidimo, to the rank of General of the Army (four star general).

He had previously held the rank of lieutenant-general. The promotion eliminates the anomaly whereby Lidimo had the same rank as his deputy, Mateus Ngonhamo.

Emergency landing in Maputo

A Boeing 747 jet, on hire to Mozambique Airlines (LAM), was obliged to make an emergency landing, shortly after taking off from Maputo international airport on 5 October, when one of its four engines caught fire.

The plane was making the regular Lisbon - Maputo - Johannesburg flight. The 97 passengers on board were alarmed at the explosion in the engine but no one was injured during the incident.

Cashew workers face redundancy

The National Union of Cashew Workers (SINTIC) has warned that a further 2,000 workers in the cashew processing industry are in imminent danger of losing their jobs.

In a statement issued for the occasion of the 11th anniversary of its creation, SINTIC said that three more processing plants are likely to shut down for lack of raw materials.

The union points out that eight factories have already closed their doors, costing the jobs of more than 5,000 workers. It blames this crisis squarely on "the policy of liberalising the export of raw nuts, decreed by the government, at the expense of supplying the national industry".

This liberalisation was imposed on the government by the World Bank in 1995. As a result, nuts that would once have supplied the Mozambican processing plants are now being shipped raw to India.

MOZAL workers end strike

Four hundred construction workers building the future aluminium smelter at Beloluane, on the outskirts of Maputo, have returned to work following a three day strike over wages and working conditions.

Their chief complain is about differences of wages between the Mozambican and South African workers. The workers are demanding an increase from the current 2,840 meticais (about 24 US cents) to 20,000 meticais per hour (an increase of over 604 per cent). Their South African colleagues are said to be earning $16 per hour, plus unspecified weekend allowances.

The striking workers say, however, that they are prepared to negotiate their demands with the employer, taking into account the existing financial capacity of the building contractors, but also the hard work demanded from the workers.

Representatives of the National Union of Building, Timber and Mining Workers (SINTICIM) met with representatives of MOZAL to try and locate the trade union's secretary general, Jeremias Timane, who negotiated the contracts. He is presently in Lichinga. The workers only agreed to resume work on the condition that on 15 October the matter is discussed and a solution found.

Illegal logging threatens sensitive area

The government's forestry and wildlife services in the central province of Sofala have illegally authorised logging activities in an ecologically sensitive area, reports the independent newsheet Metical on 1 October.

The area concerned is the barrier zone around the Gorongosa National Park, which is key for the park's protection. The barrier zone is a source of water for the park. Rivers flow through it to Lake Urema which is of key importance to the park's ecology.

Logging endangers the two all-year rivers, the Vanduzi and the Mucodza. If these rivers disappear, then so will the lake.

One of the paper's forestry sources pointed out that there had been no logging in the barrier zone for 40 years. It was "a genetic bank", but now local officials were authorising the removal of rare and precious hardwoods.

Metical's Sofala sources claimed that among those who had acquired illegal logging licences were the wives of Provincial Governor Felisberto Tomas, and of the Mayor of Beira, Chivavice Muchangage. Ilda Muchangage promptly rejected the accusation, saying she does not hold, and has never held, a logging licence. The paper was unable to contact either Tomas, or his wife, for comment.

Land mine education to be taught

Primary schools in Mozambique will soon include in their curriculum education on land mines and the danger they represent. The National Director of the Mozambican Demining Commission, Osorio Mateus, explained that the decision has been taken because it was found that there is a need for children to be taught these issues.

The project is sponsored by the European NGO, Handicap International, which has already made available for the Education Ministry a teacher's manual containing information on land mines.

Speaking on mine clearance, Mateus said that between 1993 and August this year, 7,200 kilometres of roads have been cleared of those devices. This is in addition to 371 kilometres along electricity transport lines and about 3,200 hectares of arable land, which have also been cleared of land mines.

During this work, 46,000 antipersonnel and 360 antivehicle land mines were deactivated and about 24,000 rounds of ammunition of different calibres were removed.

Voluntary HIV diagnosis centre created

The health authorities will open on 1 October the country's first anonymous and voluntary HIV diagnosis centre, announced the deputy national health director, Avertino Barreto.

Until now, HIV tests have only been carried out on those who, because of their poor state of health, were suspected of infection with the virus.

The centre, set up in the Alto Mae health centre, in central Maputo, will be able, in an initial stage, to carry out 200 tests a month. Each test will cost 50,000 meticais ($4), and results will be available seven days after the collection of the samples.

The National Programme Against AIDS (PNCS) describes the opening of this centre as an important step, particularly because "the degree of awareness about AIDS has improved in Mozambican society".

Maputo city chief doctor, Amelia Cunha, said that between 16 million and 17 million condoms were sold this year alone, compared with about eight million sold during the whole of last year.

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