Mozambique News Agency

No.161, 6th July 1999


Mozambique gets HIPC debt relief

Mozambique is to receive $3.7 billion in debt relief under the Highly Indebted Poor Countries (HIPC) initiative of the World Bank and the International Monetary Fund (IMF), following an agreement between the two Bretton Woods institutions. This corresponds to a total of $1.7 billion in net present value terms, and is a significant increase from the $1.4 billion committed in April 1998.

According to the World Bank the relief was granted in the context of Mozambique's demonstrated record of economic and social reforms. "This is the largest debt relief operation organised by the international community under HIPC initiative so far", stated the World Bank.

Mozambique is the fourth country to reach completion point under the initiative, along with Uganda, Bolivia and Guyana. There had been fears that a decision to improve debt relief at the G-8 meeting in Cologne in June might delay Mozambique's "completion point", but the World Bank and IMF met at the end of June.

The World Bank says that the debt relief will reduce the country's external debt by almost two-thirds, from about $2.7 billion to $1 billion, on top of debt relief provided under traditional mechanisms.

External debt-service obligations will fall to an annual average of $73 million in the period spanning 1999-2005, compared with an average of $169 million to be paid in the absence of the HIPC initiative. In 1998 Mozambique paid $104 million in debt service.

The World Bank claims that by the year 2001 debt service due will fall to eight percent of exports and 10 per cent of government revenues, compared with 19 per cent of exports and 23 of revenues paid in 1998.

Debt relief to increase social spending

Minister of Planning and Finance Tomas Salomao on 30 June said that the government will use the debt relief to increase spending on basic social services.

With 70 percent of the population living below the poverty line, and with rural areas home to 80 percent of the population, Salomao pointed to the need for more roads.

The debt relief is a sign of the Bretton Woods institutions acknowledgement of the effort currently being undertaken by government to meet the benchmarks set out under ESAF (Enhanced Structural Adjustment Facility), said the Minister. These include macro-economic stability, market liberalisation, privatisation, fiscal reform, and reform of the public sector, among others.

Mozambique stands to benefit from a further debt reduction if rich countries can release $70 billion by September 1999, thanks to the a decision taken by the G-8 group of countries in Cologne.

Salomao admitted that the road to the HIPC initiative had been long, and welcomed G-8 proposals for the relief to be made available faster. Mozambique was deemed eligible to the initiative in April 1998.

Salomao also said that in face of the decision taken by the Bretton Woods institutions, the Paris Club has indicated its wish to discuss with Mozambique technical aspects related to debt relief.Meetings will take place on 5 July (technical level) and 8 July (official level).

G-8 decision less than desirable

The Mozambican Debt Group (GMD) welcomed the decisions taken in Cologne by the group of industrial countries and Russia (G-8) to improve debt relief, but adds that the initiative falls on unacceptable conditions for HIPC and is far below what is necessary.

G-8 has mandated the IMF to sell 10 million ounces of gold reserves to finance part of the $70 billion debt relief. The summit also decided to lower export ratios from 200 to 150 per cent, and increase the number of HIPC countries from 25 to up to 40.

Cited in Metical on 23 June, GMD said that "although noteworthy, the measure is far below the necessary to end the debt crisis that constrains highly indebted poor countries".

"We reject the use of anti-democratic methods through which the North gives itself exclusive rights to determine the conditions for debt relief", said the document.

GMD classifies the $70 billion as a "gigantic step in the search of solutions for the debt crisis" of the most poor and indebted countries, but insists that it still falls short because the global debt of these countries exceeds $300 billion.

GMD also echoed criticism by the international campaign against debt, Jubilee 2000, levelled against G-8 for continuing to condition debt relief to the implementation of ESAFs, which have a high social cost and do not generate escape from debt relief, said GMD, adding that the crisis that forced Mozambique to adopt IMF programmes in 1987 continues.

GMD suggests three crucial proposals for the sustainable solution to the debt crisis of the HIPC initiative candidates, namely the total wiping out of unpayable debts, creditors should not be the only ones defining the debt relief terms, empower parliaments and national communities in the definition of priorities for their countries' developments.

Vaccination campaigns to include AIDS message

Mozambican health authorities have decided to take advantage of July's vaccination campaign to transmit messages on the prevention and fight against the Acquired Immuno-Deficiency Syndrome (AIDS).

The National Vaccination Days set out to eradicate poliomyelitis and administer Vitamin A to all children aged under five, covering three million children.

Health Minister Aurelio Zilhao announced the intention of using the vaccination days to "pass the AIDS messages" during a "round table" on HIV/AIDS with the media.

Statistics show about 700 new HIV infections daily. In 1998 48,698 children and 118,306 adults died of AIDS.

Zilhao and the national health director Alexandre Manguele described this disease as a true disaster. "We are faced with a serious situation, one of a declared war against a lethal epidemic", said Manguele, pointing out in hospitals more than half hospital beds are being occupied by HIV infected patients.

Mozambique business confidence index launched

The international consultancy firm KPMG on 24 June launched its first business index aimed at providing a gauge of the socio-economic impact on the Mozambican business climate.

The KPMG Mozambique Business Confidence Index focused on the banking sector, agriculture, energy and natural resources, tourism, retail and wholesale trade, transport, industry, transport and communications.

The index covered the first quarter of 1999, and concluded that the most positive economic sectors were banking and telecommunications, and the least positive sectors were construction, property and retail trade.

Comparing the first three months of 1999 to the final quarter of 1998, the study noted a significant increase in the fields of agriculture and industry, and also a slight decline in the banking, energy and natural resources sectors.

According to the index, the factors that had a positive contribution in the outcome were banking services, political stability, economic policy, a stable economic climate and foreign policy.

Negative factors mentioned included the degraded conditions of roads, custom services, tax evasion, red tape, restriction on employment of foreigners, and a lack of qualified technicians.

The survey was carried out with the coordination of the Confederation of Mozambican Businesses (CTA), the Mozambican and South African chambers of commerce and industry.

Radio Cidade to broadcast non-stop

Radio Cidade, the FM broadcaster of the publicly owned Radio Mocambique, is to broadcast 24 hours a day. The Radio's administrator for Production, Joao de Sousa, said that this "will link us to the different strata of our listeners".

Presently Radio Cidade only broadcasts non-stop on Saturdays to Sundays. It can be picked up in Maputo and its outskirts. Most of its programmes are cultural, educational and musical.

Currently, it employs 30 workers, including announcers and journalists. Radio Cidade signed cooperation deals with Radio Express, London Radio Service, the BBC and Deutsche Welle. 24 hour broadcasting, according to de Sousa, is to start in mid-July. This will be preceded by debates, surveys and live coverage of shows.

High Commissioner in Swaziland dies

Mozambican High Commissioner in Swaziland, Paulo Tembe, has died in a car accident on 26 June. The accident occurred at the Malaguane hills, at the entrance of the Swazi capital, Mbabane. Tembe is survived by a widow and two children.

SACADA to be thrown out of Mosagrius

Agriculture and Fisheries Minister Agostinho de Rosario said that negotiations are under way to remove the South African Chamber for Agricultural Development (SACADA) from the Mosagrius Development Project (SDM) in the northern province of Niassa.

Mozambique and South Africa in 1997 signed a legal document establishing SDM, under which auspices South African farmers would settle in Niassa. A first group of 14 farmers arrived in Niassa.

SDM was to receive an initial capital of a $1 million, half provided by the Mozambican state and half by SACADA. However, SACADA has not kept to its side of the bargain, and has not disbursed its funds.

Agostinho de Rosario said that "we are jointly studying legal mechanisms to cover all aspects and find another partner to substitute SACADA without undesirable legal consequences". Two technical teams from both countries have been established to deal with the legal matters.

De Rosario said that the two teams would try to redimension the project. "We want to give it an entrepreuneriship character, but first we must change the attitude of our managers in the project, since they work as if it was a state department", he said.

Cement strike ends

Workers at the cement factory Cementos de Mocambique in Matola have suspended their strike and resumed work, following an agreement with the management to increase wages by 30 percent.

Workers went on a strike on 18 June demanding a 50 percent wage increase, the sacking of an alleged racist manager, better working conditions, and the return of four trucks said to have disappeared under mysterious circumstances.

A company source said that the increase will take place in three stages: a 19 percent increase to begin with, then a three percent increase, followed by an eight percent increase.

The first stage is retroactive, spanning January to June 1999, the second will start from 1 July, and the final will be decided in the next collective bargaining agreement scheduled for the beginnings of the year 2000.

Other demands will be discussed gradually, said the source. The management argues that the strike that involved all company's plants in the country was very costly.

Demand for Cahora Bassa power grows

Nearly all countries in the southern African region are interested in the electricity produced by the Cahora Bassa Hydroelectric (HCB) dam, in the western province of Tete, claims the company's chairman of the board, Carlos Veiga dos Anjos.

Currently HCB only sells electricity to South Africa and Zimbabwe.

There is an on-going dispute between the HCB and the South African Electricity company ESKOM about electricity tariffs. ESKOM wants to go on paying the one fiftieth of a rand per kilowatt hour tariff agreed in 1981, but HCB finds this too low.

According to Noticias on 29 June, dos Anjos said that new countries like Namibia, Swaziland and Malawi have expressed the wish that part of their development be propelled with Cahora Bassa power. He explained that these countries want to have an alternative to the "hegemonic" position of ESKOM.

Dos Anjos said that he has been in contact with the electricity companies of Botswana and Zimbabwe, and that the latter expressed the wish to double, by the year 2003, its current supplies from Cahora Bassa. An agreement was signed in 1992 between the Mozambican publicly-owned electricity company EDM and its Zimbabwean counterpart, the Zimbabwe Electricity Supply Authority (ZESA), for the supply of 500 megawatts until the year 2003.

Dos Anjos added that the profits obtained with these supplies are covering the costs and of rehabilitatating the HCB and supply lines. However, due to the economic turmoil in Zimbabwe, ZESA has not been remitting payment to HCB for power supplied.

About $100 million was spent to replace 2,027 pylons destroyed during the war of destabilisation in the country, covering a distance of about 860 kilometres. The money was granted by the European Development Fund and the European Investment Bank.

Dos Anjos said that about 40 per cent of the HCB power is being sold to Zimbabwe, and the remainder 60 per cent to South Africa, where it is transformed and sold back to Mozambique for consumption. He pointed out, however, that the consumption of HCB power in the country is still very low, being supplied to only about five per cent of the population.

He said that his company is nearing its maximum production capacity. "We have five power generating groups and four of them are operating permanently whereas the fifth is working at half power because it is under maintenance", he explained.

Mozambique and UNESCO agree on commission for Mozambique Island

Prime Minister Pascoal Mocumbi has disclosed that the government and the United Nations Educational, Scientific and Cultural Organisation (UNESCO) have agreed to establish a multisectorial commission charged with harmonising a programme for the rehabilitation of the Mozambique Island infrastructures.

UNESCO declared the Mozambique Island, off the coast of the northern province of Nampula, a World Cultural Heritage in 1991.

Speaking on 30 June in Maputo at the opening of an International Conference on Sustainable Human Development and Integral Conservation of Mozambique Island, he said that "we have to find ways to mobilise domestic and foreign resources for this programme".

The programme, costed at about $40 million, involves 50 projects covering access routes, water supply, sanitation, rehabilitation of buildings, electricity, communications, transport, public services, staff training, and tourism and environment.

Mocumbi urged the participants to the meeting to make the event "a movement for a sustainable human development, not only in this small piece of land, which is Ilha de Mocambique (Mozambique Island), but in the whole country".

United Nations Development Programme (UNDP) representative in Mozambique Emmanuel De Casterle pledged that "we will try and attend to all requests of the government as long as they correspond to the objectives defined by the programme for the development of the island".

He warned, however, that "we must bear in mind that no programme can be sustainable without the involvement and commitment of civil society".

The island is home to 18,000 inhabitants, which is double its initial capacity.

Fines for drunk drivers

Road authorities are to institute fines for drivers caught driving in the country's roads with an alcoholic concentration over 0.6 grams of alcohol per litre of blood. The measure is aimed at curbing the high rate of road accidents. In 1998 there were 2,194 accidents, an increase of five per cent compared to 1997.

For public transport drivers it is even harder. Because of a zero tolerance they are not to have any traces of alcohol in their blood stream if they are working.

Vehicles will also be subjected to regular road fitness tests, starting in mid-2000: four yearly for light vehicles, a yearly inspection for public transport up to the eighth year of registration, and after that after every six months.

Any vehicle found road unfit will be taken out of the road, and owner will be given a two month period to repair his vehicle.

EU to finance development in Cabo Delgado

The European Union is to disburse $6 million for development projects in various districts in the northern province of Cabo Delgado.

The areas covered by the projects will include agriculture, education and health. In the agriculture sector the money is particularly for planting cashew trees in the district of Nangade, traditionally the largest producer in the province.

In other sectors, the money will be used to expand the existing networks. A Spanish doctor is to visit Cabo Delgado, in a near future, to assess the needs of the province in terms of schools and health units.

Dhlakama to run for president

A group of 11 opposition parties have reached an electoral agreement to rally round a single opposition list and presidential candidate in the country's forthcoming general elections.

The parties also agreed that Afonso Dhlakama, the leader of Renamo, will carry their banner as a sole presidential candidate.

The parties involved in the coalition are: PUN (Party of National Unity), FAP (Popular Alliance Force), PPPM (Mozambique's Popular Party), ALIMO (Free Alliance of Mozambique), PUM (Mozambique's Unity Party) and PRD (Democratic Renewal Party), PVM (Mozambican Green Party), MONAMO (Mozambique's National Movement), PCN (Party of National Convention), and PALMO (Mozambique's Liberal Party) also agreed to run under the wings of Renamo.

Manecas Daniel of the PRD, said that Dhlakama's selection had been unanimous. "The establishment of the union was the best form that parties found to dethrone Frelimo", he said.

Commenting on the choice of Renamo colours to rally round, he said it is of "no problem" for the identity of the other parties, stressing that the ballot papers will show their participation. Should they win the elections, the 11 parties, according to Daniel, will defend the establishment of a government of national unity.

Industrial pollution to be tackled

Deputy Minister for Industry, Trade and Tourism Abilio Bichinho on 2 July said that the country will soon have a Centre of Clean Technologies (CTL), to tackle industrial pollution related problems.

Speaking at the opening of a seminar on environmental management in Matola, Bichinho said that the establishment of the CTL will depend on recommendations of a study carried out by the United Nations Industrial Development Organisation (UNIDO), in coordination with the Ministry of Environmental Coordination and United Nations Development Programme (UNDP).

He added that the project, costed at $1 million, will start in September in Machava, in the outskirts of Maputo.

According to UNIDO's representative in Mozambique, Mohammed Eesa, the project will last three years, which could be extended if need be.

The centre, in its initial phase, will monitor and audit environmental management in Machava - this site harbours more than 60 percent of the country's industries.

The CTL will also tackle environmental problems and advise industries in matters of management and environmental preservation, minimising the effects of pollution, and the upgrading of technologies and production processes.

"Promotion of technological development constitutes a fundamental condition for the creation of a modern and competitive industrial basis", said Bichinho, stressing that "this development must favour the adoption of environmental-friendly technologies".

The one-day seminar involved government representatives, UNIDO, UNDP and managers of various industries based in Matola.

Provincial electoral commissions established

The eleven presidents of the provincial electoral commissions are to start operating on 5 July, following their swearing in ceremony on 3 July. The presidents will then swear in the presidents of the district electoral commissions.

Speaking at the ceremony, the President of the country's National Electoral Commission (CNE), Jamisse Taimo, said that after 4 July "the presidents have to roll up their sleeves" so as to ensure the proper running of the commissions.

"The members of the provincial commissions will have to acquaint themselves with the (electoral) law, as well as having the opportunity to closely see some of the actions that are taking place, such as the training of brigades and the accreditation of political parties for (election) monitoring", said Taimo.

They must abide by CNE's motto: "for transparent, free and fair elections", he said, to add transparency and fairness to registration and electoral acts.

Provincial and district commissions are supporting organs of the CNE as they establish a link between it and the grassroots.

Jamisse Taimo also urged political parties to work to guarantee that the forthcoming general elections be transparent, free and fair. "Through your acts, the guidance you give, through your parties at grassroots levels, you must work for harmony so that transparency may become reality", said Taimo.

He also urged the political parties and the Mozambican society to turn "the elections into a festive and inclusive climate where all of us are actors".

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