Mozambique News Agency

No.151, 8th February1999


Elections to cost $42 million

Mozambique's second multi-party presidential and parliamentary elections, scheduled for October, are budgeted at just over $42 million, according to the Minister of State Administration, Alfredo Gamito, cited in Noticias on 6 February.

About 90 per cent of the money is already available he said. The government is only able to provide $9 million. $23 million dollars is being offered by the European Union, and the remaining $10 million will be channelled by other donors via the United Nations Development Programme (UNDP).

The budget required for the elections came from studies carried out by the government, the European Union and the UNDP.

Gamito pointed out that this budget is much less than the cost of the first multi-party elections, held in 1994. The cost then was $63.53 million: the state budget provided $4.57 million and the rest came from donors.

One expensive decision has been made: Gamito said that an entirely new voter registration exercise would be undertaken, rather than simply updating the existing electoral registers.

The current law on voter registration demands annual updates of the registers. The government is already in violation of this law having made no attempt to update the registers in 1998.

Registering the entire electorate from scratch is obviously much more expensive than simply updating the registers. According to Gamito, it will absorb more than half the total election budget.

This is a government capitulation to the opposition party Renamo, which demanded fresh registration. It means that all the work on drawing up the 1994 registers, and on updating them in 1997, is simply to be discarded.

The most serious danger in this procedure is that the electorate may shrink dramatically, if large numbers of people who registered in 1994 or 1997, and still have their voter's cards, see no good reason for re-registering.

The budget for the elections does not include money for political party campaigning. During the last elections, there was a UN-administered trust fund set up to turn Renamo from a military organisation to a political party - through this mechanism donors (mainly European governments) channelled $17 million to Renamo.

A second, and much smaller trust fund, was established to support the campaigning of all 18 registered political parties. Renamo was entitled to money from this fund too (as was the ruling Frelimo Party). Donors were prepared to provide each party with $150,000 through this fund, in three $50,000 instalments - making a total of $2.7 million. (In fact, rather less was spent since several parties did not receive the second or third instalments, because they failed to give the UN receipts justifying how they had used the first one.)

Ex-cashew factory pollutes Beira farms

A fruit juice company that took over a cashew processing factory on the outskirts of Beira, on 16 January spilt thousands of litres of highly caustic cashew nut oil, ruining nearby farms, killing animals and damaging the health of local residents.

According to a the Diario de Mocambique the incident occurred when staff of the fruit juice company, Al-Omran Agro-Industrial Lda, opened the tap on a tank containing 35,000 litres of cashew nut oil. The cashew nut oil had been stored in the tank since 1972. Rain helped spread the oil to nearby farms in Ndunda.

This area is part of the Beira green belt in which large amounts of rice are grown. All the rice touched by the oil, with its high acid content, was instantly destroyed. Ducks, chickens, dogs and other domestic animals that drank water contaminated by the oil died. People walking barefoot in the area received acid burns on the soles of their feet.

About 30 families lost their rice crops and have demanded that the company compensate them. Initial estimates were that compensation should be more than 13 million meticais (about $1,050), but so far the company has only paid out 1.5 million meticais.

The company's legal representative, Eduardo Elias claimed that the tap simply opened of its own accord. Initially Al-Omran staff thought the tank only contained water: they only found out about the oil too late, when it had all been spilt.

The company has invested $3 million in converting the factory from processing cashew nuts to producing fruit pulp, to be exported to the United Arab Emirates.

Cashew nut oil is a by-product of cashew processing, and is used in the cosmetic and pharmaceutical industries.

Frelimo moves to save cashew industry

The Frelimo parliamentary group has submitted a bill to the country's parliament, the Assembly of the Republic, that seeks to protect the cashew processing industry by imposing an outright ban on the export of raw nuts.

This bill, which is a frontal attack on the government's cashew policy, marks the most serious divergence so far between the government and Frelimo parliamentarians.

Due to the liberalisation of the trade in raw nuts, imposed on the government by the World Bank in 1995, the processing industry is now on the brink of collapse, with most of the factories closed for lack of raw materials: the nuts which should have supplied them have been exported to India.

The bill states that, in order to "reindustrialise the cashew sector" and "to guarantee security and tranquillity for the new investments that will have to made", all exports of raw nuts are forbidden for not less than ten years.

The only circumstances under which raw nuts can be exported within this period are if all the processing plants are fully supplied with raw materials. Even then, only Mozambican citizens, or companies with a majority Mozambican share holding, will be allowed to export raw nuts.

The bill tries to protect cashew farmers' interests by stipulating that the average price paid for their nuts in any season must not be lower than the average for the previous three seasons.

The bill orders the government to provide incentives for businesses to reopen processing factories that are currently closed, and to mobilise resources to pay compensation to cashew industry workers laid off since 1995.

The government must also "involve all productive sectors of the economy" in restoring the country's ageing and diseased cashew orchard.

Liberalisation blamed for privatisation failure

The document explaining the bill summarises the history of World Bank policy towards Mozambican cashew: in 1995, under World Bank pressure, the government liberalised the cashew trade. Liberalisation took the form of gradually reducing the raw nut export surtax, which was the only measure of protection to the industry.

Initially the surtax was high enough to persuade businesses that they ought to buy cashew factories that were being privatised. Then the government changed the rules, and the surtax fell to its current level of 14 per cent, regarded by the industry as ruinous.

Cashew factories began closing in 1997, and today only five out of 14 sizeable factories are operating. Of these, two have announced that they will close this month, and a third is also thinking of closing down.

The only factories that seem certain to work throughout 1999 are one at Geba, in Nampula province, owned by the Portuguese company Joao Ferreira dos Santos, and one at Mocita, in the city of Xai-Xai, in which the South African Anglo- American Corporation is a shareholder.

In 1995, 28,000 tonnes of nuts were processed by the industries. This year the figure will be just 12,000 - mostly processed by Mocita, which received significant new investment in 1997.

Huge economic losses

The whole point about industrialisation is that a processed product is worth more than the raw materials, and thus Mozambique can earn much more from exporting processed kernels than raw nuts.

For every tonne of nuts exported raw, Mozambique loses $150 that it would have earned had that same tonne been converted into processed kernels. The Frelimo deputies estimate this loss over the past four years at $12 million.

Businesses invested $25 million in cashew processing after 1994 - this risks being a total write-off. A further $20 million of investment was never made, for the investors held off, waiting to see whether the government would change its policy.

The Frelimo document goes so far as to accuse the state of "immoral" behaviour, because "it privatised factories under one policy and then, immediately the state was free of the heavy costs it had previously borne, it changed the policy and destroyed the companies which had proposed to rejuvenate the sector".

The document notes that of the 9,500 workers in the processing plants at the end of privatisation, 8,000 have been made redundant or are on the verge of losing their jobs. Yet, had it not been for liberalisation, there was every change that the cashew factories could have returned to the level of employment of the early 1970s, when 17,000 people worked in the processing plants.

As for the World Bank claim that liberalisation increases the earnings of the peasant farmers who harvest the nuts, Frelimo argues that this has simply not happened. Privatisation was accompanied by an increase in the average price paid for peasant nuts - from 23 US cents a kilo to 32 cents in 1995, and then to 38 cents in the 1996/97 campaign.

But the 1996/97 campaign was the last one in which the industries managed to compete with the exporters of raw nuts. With the industry slumping into crisis as from 1997, so the price for raw nuts stagnated at between 36 and 40 cents a kilo. At the same time the peasants’ terms of trade have deteriorated. Furthermore, the disorganisation now reigning in what were previously well-ordered commercial circuits is leading to an increasing rejection of nuts on quality grounds.

Frelimo argues that this means the real price the peasants receive is actually falling. Since increased prices for the producers was the one and only justification for liberalisation, and since this has not happened, “there is no plausible justification for continuing with current policy”.

Nampula nurses living in fear

Nurses in the northern city of Nampula are living in fear because of a malicious rumour blaming them for the cholera outbreak in the city.

The first case of cholera in Nampula was reported in late November. By mid-December the situation was alarming, with the disease spreading rapidly through the poorer suburbs.

At this point a rumour appeared, according to which a mysterious white powder was responsible for the disease. It was claimed that groups of unknown individuals were spreading the powder under cover of night, and that it was enough to inhale the powder to catch cholera.

Panic gripped Nampula neighbourhoods, and the affair soon took on a political colouring. Local Renamo members claimed that health workers who are members of the ruling Frelimo Party, knowing that Frelimo cannot win the 1999 elections in Nampula, were deliberately spreading a poisonous chemical in order to exterminate the inhabitants of the city.

Four nurses who work at the Nampula Provincial Hospital have been beaten up. The other nursing staff have taken to hiding their uniforms when they leave, in the hope that they will not be identified.

A senior nurse at the hospital said he believed that relatives of those who had died of cholera were furious at the authorities' inability to halt the spread of the disease, and the nurses were a convenient scapegoat. The attacks were therefore a kind of revenge.

Crisis in UD continues

The crisis in Mozambique's three-party opposition coalition, the Democratic Union (UD), is rumbling on with no end in sight.

The latest development is that Antonio Palange, until recently head of the UD parliamentary group, intends to sue a fellow UD leader, Martins Bilal, for libel.

Both men were founders of the largest component of the UD, the Liberal and Democratic Party (PALMO), but fell out over Palange's attempt last year to include five extra-parliamentary groupings within the UD.

Bilal organised a PALMO congress which stripped Palange of his party membership. He then declared that Palange was no longer head of the UD parliamentary group, and that his place was taken by the deputy head, Celina Solomone. This move has come to grief, because Solomone declared that she does not want the post.

Palange claims that Bilal has offended his good name and honour by publicly calling him an alcoholic. Similar accusations have been common for years, and this is not the first time that he has threatened to take Bilal to court over them.

Meanwhile UD general secretary Jose Massinga has ruled out any coalition with other opposition forces for the parliamentary elections due in October.

Matola Plaza planned

Plans have been unveiled for the largest shopping centre in Mozambique, due to open by April 2000 in Matola, the industrial city that adjoins Maputo.

The centre is to be known as the Matola Plaza, and will be built by the South African company McCormick Property Development, at a cost of $25 million.

The centre will cover an area of 21,500 square metres. It will be built beside the future Maputo-Witbank motorway, which is under construction as part of the Maputo Development Corridor.

There will be between 67 and 85 shops in the Plaza including a supermarket, fashion stores, stores specialising in electrical equipment, a restaurant complex, cafes and cinemas. There will be a stand for the sale of cars, automobile repair shops and a filling station.

The first stone in the project will be laid in April, and it is hoped that the first shops will be ready before 2000.

1,500 workers, most of them Mozambicans will be employed in building the centre. When it is completed the centre will employ between 500 and 550 workers.

Wounded Navy Commander moved to South Africa

The commander of the Mozambican navy, Rear- Admiral Pascoal Jose Nhalungo, critically injured when he was shot by unknown gunmen on 27 January, has been moved to a clinic in Johannesburg.

According to a medical source in Maputo Central Hospital, Nhalungo's condition remains extremely serious. The bullets that tore into his abdomen have done what he described as "irreparable damage" to the large intestine, liver and stomach.

The transfer to Johannesburg was arranged with the assistance of the military attaches from the American, Portuguese and South African embassies.

The motive for the shooting remains unclear, and investigations are being carried out by the Criminal Investigation Police (PIC), and the military police.

Flooding hits over 18,000 hectares

The National Food Security Early Warning System has warned that the flooding and torrential rain that has lashed the country since early January has led to the loss of almost 18,300 hectares of crops.

January's floods on the Buzi, Pungue and Metuchira rivers in the central province of Sofala washed away 4,850 hectares of crops.

In February all three of these rivers have risen again. The floodgates at the Chicamba dam on the Buzi's main tributary, the Revue, remain open, and are releasing 400 cubic metres of water a second, worsening the flood situation on the lower reaches of the Buzi.

The Pungue has not reached the same level as in January, and so far traffic along the Beira-Zimbabwe highway, which crosses the river, is not threatened.

But a bridge over the Metuchira, a tributary of the Pungue, is impassable, thus making travel impossible between the rich agricultural land of Metuchira and the town of Nhamatanda.

The rains have turned the road from Beira to Caia, on the south bank of the Zambezi, into a quagmire. This road is the key link between the centre and north of the country, but currently only four wheel drive vehicles can use it.

In the south of the country, almost 4,600 hectares of crops have been affected in the Incomati valley, in Manhica district, about 80 kilometres north of Maputo.

In the neighbouring province of Gaza, the torrential rains have inundated about 6,500 hectares of fields.

The government's Natural Disasters Coordinating Council says that 1,766 tonnes of seeds (maize, beans, and groundnuts) are needed to ensure that peasant farmers can sow their fields again, once the waters have receded.

Zambezia bridge collapses

The district of Lugela, in the central province of Zambezia, has been cut off from the rest of the province by the collapse of a bridge over the river Lugela.

The bridge collapsed on 3 February after a sudden rise in the level of the river. 55 metres of the 95 metre long bridge was swept away.

In the absence of the bridge, Lugela residents who wish to cross the river and enter Mocuba district have to hire canoes. The bridge provided the only road access to Lugela from many other parts of the province. Until it is repaired development projects in the district are liable to grind to a halt.

Production halted at Texlom

The torrential rains and high winds that have buffeted Maputo and the neighbouring city of Matola have brought production at the country's largest textile factory, Texlom, to a standstill.

A storm on 3 February blew much of the roof off the factory. The rain cascaded into Texlom, causing serious damage to machinery and to raw materials.

Texlom industrial director, Lucilio Diogo, said that two and a half tonnes of cotton, the factory's basic raw material had been exposed to the rain and was now unusable. Woven cotton thread had also been soaked and ruined. Water also affected some of the machinery.

This is a severe blow to a factory that only reopened in November, after a paralysis of more than a year caused by disastrous mismanagement by the Portuguese firm Sogetex.

When the Sogetex management contract expired, the Texlom shareholders appointed a new management board, which negotiated with creditors and managed to restart production, albeit on a reduced scale.

Up until the storm, Texlom had been producing 7,000 square metres of cloth a day for both domestic and export markets.

First death at Mozal

The contractor companies building the MOZAL aluminium smelter on the outskirts of Maputo have suffered their first serious accident, in which a worker died. The accident occurred on 25 January when a truck delivering a load of soil to one of the construction areas, reversed and hit a worker. The injured man, Ronnie Chavda, died in the ambulance on the way to hospital.

MOZAL says the accident "unfortunately casts a shadow over the recent safety success of having achieved 500,000 hours worked on site without a disabling injury".

France to fund road repairs

France is to provide the equivalent of $1 million to finance the resealing of urban roads in four Mozambican cities.

The cities concerned are Nampula and Pemba in northern Mozambique, and Beira and Quelimane in the centre of the country. Funding for the road repairs follows a request to that effect made by the Mozambican authorities to the French government last year.

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