Mozambique News Agency

No.182, 4th May 2000


Workers march on May Day

Thousands of workers marched through the streets of Maputo on the traditional May Day parade, demanding that the government set up the long-promised labour tribunals. In theory, labour tribunals, specialised courts to deal with labour disputes, were established under a law of 1992. In practice, eight years later, not a single labour tribunal exists.

The excuse has been the lack of legal staff. Labour law has thus been dealt with by the ordinary law courts, which are already clogged up with criminal and civil cases. The result, according to Joaquim Fanheiro, general secretary of the largest trade union federation, the OTM, is that some cases submitted in 1992 have still not been heard.

The OTM therefore decided to make the call for the immediate establishment of labour tribunals the major theme for this year's May Day celebration.

But many of those on the Maputo march had other matters on their mind. Many marchers came from workplaces that have not paid wages for months, or even years.

The largest such workplace is the giant textile factory, Texlom, on the outskirts of Maputo, which employs over 1,100 people. Texlom workers say they have not received their wages for two years. The factory was undergoing rehabilitation, but these efforts suffered a severe blow in February 1999, when a storm took the Texlom roof off, and rain poured in, damaging machinery and raw materials.

Workers from the Hotel Universo carried banners saying they had gone 18 months without wages, while workers from the Tempografica printing company protested that they have not been paid for 13 months.

Marchers from many industries also carried banners demanding an increase in the statutory minimum wage, which is currently just 450,000 meticais ($30) a month, and for a return to price controls.

Prime Minister addresses May Day rally

Prime Minister Pascoal Mocumbi has called for "redoubled efforts" to ensure a return to normality in the areas of southern and central Mozambique hit by catastrophic flooding in February and March.

Addressing many thousands of workers attending the May Day rally in Maputo, Prime Minister Mocumbi said that the death toll from the floods stood at around 700, with a further 100 people missing. 140,000 hectares of crops had been lost, and 90 per cent of the country's irrigation equipment had been damaged.

About 20,000 head of cattle were missing, and it was feared that a further 165,000 head could die because of the outbreak of livestock epidemics.

Summarising the rescue operations, Mocumbi said that 50,000 people had been airlifted to safety, and 7,000 tonnes of emergency cargo had been flown in to areas cut off by the floods. In addition, food and other relief aid had been provided for 500,000 or so displaced people living temporarily in 101 accommodation centres.

Mocumbi explained that President Joaquim Chissano could not be present at this year's May Day rally, since he has flown to Europe where he will head the Mozambican government delegation to a donors' conference in Rome, seeking $450 million for post- flood reconstruction.

As for the main trade union demand in this year's May Day celebrations, for the immediate establishment of the long-awaited labour tribunals, Prime Minister Mocumbi was less than enthusiastic, and suggested that most labour disputes should be solved without resorting to the courts.

"We urge direct collective negotiation as the way of dealing with conflicts between labour and capital", said Mocumbi. But so far collective labour agreements had only been signed in 15 per cent of Mozambican companies.

He agreed that, in principle, the labour tribunals should be set up, and promised that this year the government would try to install them in the main cities.

Assembly approves government plan for 2000

The Mozambican parliament, the Assembly of the Republic, on 2 May approved the government's Economic and Social Plan for the year.

Deputies of the Renamo-Electoral Union coalition boycotted the debate and refused to take part in the vote. The plan therefore passed by 130 votes (the deputies present from the majority Frelimo Party) to none.

The resolution approving the plan, drafted by the Assembly's Plan and Budget Commission (CPO), instructed the government to submit a revised version of the plan later in the year, after a more detailed assessment of the impact of the February/March flooding, and after donors have made their pledges for post-flood reconstruction.

The resolution also effectively changed the plan by giving the government specific instructions in several areas of the economy.

Thus in agriculture, the government was told to improve the mechanisms for attributing land titles to peasant households, and to undertake activities "to allow the management of natural resources in partnership with communities".

In industry, the resolution instructed the government to take measures "to overcome the crisis in the textile and clothing sector" (several Mozambican textile factories are not currently producing, and the largest of them all, Texlom, on the outskirts of Maputo, has been paralysed since February 1999).

Under this resolution the government must also "strengthen institutional measures for post-privatisation monitoring": this follows the concerns expressed by many deputies that the new owners of privatised companies are doing what they like with the assets, and disregarding their contractual obligations.

The government must "prepare legislation that contributes to the gradual transformation of the informal sector into formal companies", and continue activities to regulate cross- border trade.

In response to demands raised in the debate, the resolution instructs the government "to strengthen its capacity to supervise public works", and to ensure that, in the rehabilitation of infrastructures destroyed by flooding, priority is given to Mozambican building companies, rather than foreign ones.

After repeated complaints that dishonest employers steal from their workforce by not passing on to the National Social Security Institute (INSS), the social security contributions deducted from their workers' wages, the resolution told the government to "strengthen mechanisms" that would compel employers to obey social security legislation.

Once the plan had been approved, the Assembly moved to vote on amendments to a resolution on the floods and cyclones that battered the country earlier in the year. Several of these were amendments proposed by Renamo, and so the Renamo deputies all returned to the chamber to vote on them.

One such amendment proposed to replace the term "government" with the words "self- proclaimed government" throughout the document. The Frelimo majority ensured that this amendment went down to defeat by 131 votes to 111.

Making a "declaration of vote" for Renamo, deputy Jeremias Pondeca declared "The President of Mozambique is (Renamo leader) Afonso Dhlakama", and told the Frelimo benches "Your days are numbered". The millions of Mozambicans who had voted for Renamo would not continue to tolerate "your Marxism-Leninism", he said.

A Renamo amendment claiming the government had not acted on meteorological warnings in September of a much wetter rainy season than normal was also lost by 131 votes to 111.

This time Raul da Conceicao gave the Renamo "declaration of vote", and repeated the myth that the government had taken no preventive measures before the devastating rains of early February. "It's a lie to say the government reacted promptly" (as the resolution claimed), he protested.

Prime Minister outlines 1999 success

In 1999 Mozambique enjoyed "a positive performance on all the fronts regarded as fundamental for the country's social and political life", Prime Minister Pascoal Mocumbi told the Assembly of the Republic on 20 April.

Summarising achievements in 1999, he said that Gross Domestic Product (GDP) grew by nine per cent, and commodity exports had increased by six per cent. Averaged over the year, inflation was only two per cent.

The Mozambican currency, the metical, devalued by about eight per cent. This was a considerably higher devaluation than in 1998, but the Prime Minister argued that it was necessary to maintain the competitiveness of the Mozambican economy.

He said that total investment financed with outside resources (either direct foreign investment, or the contracting of private foreign loans) reached $742 million in 1999, as against only $292 million in 1998.

Total expenditure increased, in nominal terms, by 23 per cent. Domestic revenue rose by 17 per cent, and foreign grants and loans by nine per cent.

The increase in spending was channelled mostly to "priority sectors" - thus there was a 27 per cent increase in spending on education, a 32 per cent increase in health, and a 44 per cent increase in the justice system.

The school network grew by eight per cent in 1999, and the number of children attending school by 11 per cent. The gross enrolment rate in first grade was 85 per cent (a six per cent improvement on 1998). Hence the number of six year olds not at school has been cut to 15 per cent.

As for the health service, the number of health units grew by six per cent, and the country continued to record impressive coverage rates. Thus while only 40 per cent of births take place in a maternity ward or similar unit, 90 per cent of pregnant women receive ante-natal care, and when it comes to post-natal care (for children under one year old), the figure rises to 95 per cent.

Prime Minister Mocumbi also stressed the debt relief Mozambique received in 1999. At the end of June Mozambique finally reached the "completion point" for HIPC (Heavily Indebted Poor Countries) debt relief. This wiped out $3.7 billion of Mozambique's debt stock in nominal terms ($1.7 billion in net present value).

This improved the balance of payments, and released funds for poverty reduction programmes that would otherwise have been spent on debt servicing. Annual debt servicing fell from 2.1 per cent of GDP in 1998 to 1.7 per cent in 1999.

Impact of floods on economy

Despite the catastrophic flooding that hit the country in February, the government remains committed to a relatively high growth rate for the year 2000.

Introducing the government's Economic and Social Plan for 2000 in the Assembly of the Republic, Prime Minister Mocumbi admitted that the priorities for the allocation of resources this year "will have to be adapted so as to relieve the suffering of the flood- stricken population, and rehabilitate the infrastructures that were destroyed as quickly as possible".

But he insisted that the main macro-economic targets remain a growth rate of between six and eight per cent, and maintaining inflation to under ten per cent.

The number of people seriously affected by the flooding was about two million, around half of whom require emergency food aid.

The known death toll has not risen into the thousands, as had been feared. The Prime Minister put the number of deaths at 640. Rescue operations had been highly successful, moving some 50,000 people to safety.

He put the known costs of reconstruction at $450 million: this breaks down into $372 million for restoring state infrastructures and services, and $78 million for the private sector.

As for international support for the relief operations, Mocumbi put this at $31.8 million by late March.

Breaking the damage down by sector, Mocumbi said that 127,000 hectares of crops had been lost. This is more than ten per cent of the total cultivated area in the five affected provinces (Maputo, Gaza, Inhambane, Manica and Sofala). This loss of cultivated area struck at the livelihoods of over 113,000 peasant households.

Sugar production in Maputo province was severely hit. The recently rehabilitated Maragra plantation was completely knocked out, and part of the Xinavane plantation. In all, 4,400 hectares of sugar cane were lost.

In industry, the torrential rains of early February caused severe damage to the industrial park in the city of Matola - particularly to the two main producers of drinks: the Coca- Cola soft drinks factory, and the 2M brewery.

The commercial network took a severe battering. Mocumbi said the floods had affected 120 wholesalers and 877 shops.

The public works and housing sector suffered enormous damage. The main north-south highway was cut in several places, making it quite impossible to drive from Maputo to Beira. Water supply systems were damaged in Maputo, Matola, Chokwe and Xai- Xai, protective dikes were destroyed (again, particularly in Chokwe and Xai-Xai), and drainage channels collapsed.

Mocumbi said it is now estimated that repairs to roads and bridges will cost $58.8 million, and to water supply and sanitation systems $27.2 million. Housing and resettlement costs will be around $24.5 million.

As for the energy sector, Mocumbi noted that many of the generators installed in rural areas had been submerged, and a large number of pylons knocked down.

The huge flood on the Limpopo washed away nine pylons on the line carrying power from the Cahora Bassa dam to South Africa. Not only did this interrupt exports of electricity to South Africa, but it suddenly increased the costs of Maputo's power.

For the power that Maputo imports from South Africa is normally treated as recycled Cahora Bassa power and is paid for in local currency to the Cahora Bassa company, HCB. But when no power is flowing from Cahora Bassa to South Africa, the Mozambican electricity company, EDM, has to pay its South African counterpart, Eskom, in hard currency at a much higher price.

EDM's own installations and equipment were swamped in Xai- Xai and Beira, in the former by the Limpopo flood, and in the latter by cyclone Eline.

As for the rail, port and communications systems, Mocumbi put the flood damage at $60.3 million. $56.5 million of this is money that the port and rail company, CFM, needs to repair the southern rail network (particularly the Maputo- Zimbabwe line), and the port of Beira, where cyclone Eline sank seven vessels.

In the education sector, 630 schools, attended by 214,000 pupils, were affected by the floods.

42 health units were damaged - including one of the largest hospitals in the country, Beira Central Hospital.

Economic targets for 2000

The top priorities of the government's economic and social plan for the year 2000 are to eliminate absolute poverty, to reduce regional imbalances, and to develop the national business class, Prime Minister Pascoal Mocumbi declared on 20 April.

Outlining the plan to the country's parliament, the Assembly of the Republic, he said that the key targets are to continue establishing conditions that will attract investments, and to improve the quality of public services.

Most sectors of the economy are expected to grow in 2000, with the exception of construction. Construction activity grew by a remarkable 47 per cent in 1999, and this year is expected to shrink by 23.8 per cent. This is because most of the construction work on the MOZAL aluminium smelter on the outskirts of Maputo was carried out last year, and this year it will be completed.

The plan did hope for an 11.7 per cent growth in agriculture: but detailed projections for crops have now been revised. The original 2000 plan expected a 10.3 per cent increase in marketed food crops: the revised plan forecasts a decline of 16 per cent.

Instead of growing by 27.5 per cent, marketed rice production is now likely to fall by 10.2 per cent. Marketed maize production was scheduled to rise by 6.7 per cent: the revised figures forecast a decline of 19.6 per cent. As for beans, instead of a growth of 6.3 per cent a decline of 15.4 per cent is now predicted.

Export crops, the revised forecast says, should grow by 11 per cent, rather than the 19.3 per cent initially envisaged. This is solely due to the effect of the floods on sugar production. The rehabilitation of the sugar industry has been stopped in its tracks: instead of growing by 71 per cent, sugar production is now forecast to contract by 6.3 per cent.

All other export crops (cashew nuts, cotton, copra, citrus and tea) are unaffected, since they are grown mostly in areas untouched by the floods.

Manufacturing industry is expected to grow at 6.8 per cent: but it will not, since this is the forecast prior to the floods. So far no revised figure has been drawn up, but the paralysis for some weeks of several major factories in Matola is bound to have a serious impact.

The mining industry was expected to grow by 23.4 per cent, but this figure has been reduced downwards to 3.9 per cent. This is partly due to flooding, which affected the production of bentonite, but also to factors that have nothing to do with nature, notably the current paralysis of the graphite mine at Ancuabe in Cabo Delgado province, over a tax dispute.

The production of electricity was expected to increase by 21.8 per cent, but again the floods have taken their toll and the revised growth rate is 14.9 per cent.

As for transport and communications, the plan sets a target for 11.2 per cent growth. The major component of this is rail traffic, with a growth target of 19.9 per cent. But Mocumbi admitted that these figures do not take account of the floods, and it is therefore hard to see how they can possibly be met.

Budget presented to Assembly

The Mozambican government on 20 April presented the Assembly of the Republic with a budget for the year 2000 which seeks to use debt relief to increase expenditure on social services.

Introduced by Finance Minister Luisa Diogo, the recurrent budget envisages an 80 per cent increase in health care expenditure, and a 21 per cent increase in spending on education. The judicial system received an increase of 25 per cent, and agricultural spending is up by 13 per cent.

Debt servicing has fallen significantly, thanks to the HIPC (Heavily Indebted Poor Counties) debt relief initiative, sponsored by the World Bank and the IMF. The impact on the budget is that debt servicing has fallen from one per cent of GDP in 1998, to 0.7 per cent in 1999, to a forecast of 0.4 per cent this year.

The budget documents presented to the Assembly predict that this year debt servicing will be no more than $26.9 million: without HIPC, debt servicing would have been a burden of $94.1 million on the budget.

Debt relief releases 588 billion meticais ($39.2 million) this year for poverty reduction programmes. The largest slice of this sum, 202 billion meticais goes into health care - 72 per cent for the purchase of medicines, and 28 per cent for the government's Strategic Plan against AIDS.

148 billion meticais of the additional funding will go on improving rural roads, providing better access to safe supplies of drinking water, and on expanding access to safe and sustainable sources of energy.

47 billion meticais will go to education, particularly to improving access to schooling, and improving the quality of education, 80 billion will go to rural development, 61 billion to social welfare, and the remaining 50 billion to capacity building and monitoring poverty reduction programmes.

The budget envisaged total expenditure of 14,476 billion meticais (about $965 million). This is divided into a recurrent budget of 7,654 billion meticais, and a capital budget of 6,822 billion.

Taxes and other domestic revenue are scheduled to raise 7,500 billion meticais. Net loans incurred domestically will be 319 billion meticais.

Thus the deficit before grants is 7,295 billion meticais. After grants, the deficit comes down to 3,129 billion meticais. This gap must be plugged by foreign credits, and by the state reducing its accumulated savings in the banking system.

The government predicts that foreign financing of the budget through loans and grants, will cover 42 per cent of expenditure, with the remaining 58 per cent coming from domestic sources.

Mineral production hit by low prices

Production of key minerals has been hit by a fall in the world market price, the Minister of Mineral Resources and Energy, Castigo Langa, told the Assembly of the Republic on 26 April.

The graphite mine at Ancuabe, in Cabo Delgado province, is currently closed, he explained, precisely because it is no longer profitable to sell the graphite.

Other producers, particular China, had flooded the market, pushing down the price, and the Ancuabe mine could not compete.

Langa said his Ministry hoped to beat this problem by economies of scale, expanding production from 9,000 to 20,000 tonnes a year, and reducing unit costs. The investors in the mine are trying to raise $4.5 million for this expansion.

Similarly with the exploitation of heavy sands. The price of the mineral extracted from the sands, titanium, has fallen, and this forced a "reduction in the rhythm" of the heavy sands project at Moebase, in Zambezia province.

Langa also said that, although the Chipanga-11 coal mine at Moatize, in the western province of Tete, is functioning, its production is "almost symbolic" because of transport problems.

Langa told the Assembly the government favoured labour intensive methods in mining, in order to create jobs. But he warned "we cannot oblige companies to employ more people than they need", and technological advances had significantly reduced labour requirements in the mining sector.

President Chissano optimistic about Rome conference

President Joaquim Chissano has expressed hopes for "good participation and a positive response, not just promises" from the donors who are to take part in the international conference on 3 and 4 May in Rome, on Mozambique's reconstruction efforts following the catastrophic flooding that hit the southern and central regions of the country in February and March.

The Mozambican government is to request about $450 million for the reconstruction work. "We have set up working groups that will explain how we intend to use the aid, not only in reconstruction, but also to prevent future disasters", said President Chissano in an interview with the Portuguese News Agency, Lusa.

As for Mozambique's foreign debt, President Chissano once again said it should be entirely written off. "Cancelling part of the debt or the debt service does not correspond to the needs, but merely postpones the problem", he stressed.

"Economic growth is not felt much among our people because much of the income produced is later spent in paying off the debt. With total cancellation, we would use the money saved in poverty relief, in education, health, and water supply programmes", said President Chissano.

On globalisation, President Chissano argued "In a world that intends to be globalised, there cannot be a part that is neglected. The developed countries need markets, but this can't just work in one direction".

"The sustainability of the development of the North depends on their support for the underdeveloped countries", President Chissano argued. "We Africans should take all measures to ensure that all corrections to be made are not only to benefit the interests of the industrialised countries, but that they also serve our interests".

Malawi bans Mozambican tobacco

Mozambican tobacco producers have suffered an unexpected blow with the announcement on 28 April that the Malawian authorities are temporarily suspending the import of foreign tobacco leaf.

Mozambique does not possess any tobacco processing industry of its own, and so growers (in Tete, Nampula, Niassa and Zambezia provinces) have their leaf processed over the border in Malawi.

Tete provincial governor Virgilio Ferrao visited Macanga district to speak with one of the major companies involved, Mozambique Leaf Tobacco, and with peasant growers.

The ban is understood to be a result of the very low prices being given for tobacco at the moment. Growers at the main auction floors in the capital, Lilongwe, and Limbe Auction Floors in the commercial capital, Blantyre, protested at the low prices and forced a week's suspension of the sales.

The Tobacco Association of Malawi, the body that looks after the interests of the tobacco growers, accused processing companies of deliberately fixing prices by ferrying in foreign leaf, which, they alleged, saturated the market thereby pushing prices down.

But Charles Graham, chairman of the Tobacco Exporters Association of Malawi, while admitting there were tobacco imports, denied that foreign leaf was responsible for the low prices. "The import of tobacco from Zambia and Mozambique has nothing to do with the local leaf and therefore the exercise cannot affect the ongoing tobacco sales," Graham said.

About 60,000 Mozambican peasant households grow tobacco, and every season some 8,000 tonnes are processed in Malawi. About half this production comes from Tete.

World Bank credit for Mozambique

The World Bank has announced a $30 million credit to Mozambique, in response to the request for emergency aid following the catastrophic floods of February.

The credit was approved on 20 April, under the title Flood Emergency Recovery Project. The Bank claims it "will help Mozambique maintain macroeconomic stability through the financing of imports necessary to rebuild social and economic infrastructure, and by re-establishing production levels".

The Bank has ignored criticisms from Mozambican NGOs, who have pointed out that the country needs grants, not more loans.

The money for the credit comes from the World Bank's soft loans affiliate, the International Development Association (IDA). It is to be repaid over 40 years, with a ten year grace period.District administrators suspended

The governor of Manica province, Felicio Zacarias, has ordered the suspension of the four district administrators whom he publicly accused last month of involvement in the theft of 50 of the 510 head of cattle meant for distribution to the family sector.

The administrators in question are accused of illegally acquiring the cattle either in their own names or in the names of relatives.

Fishing project on Corumana lake

Minister for Women's Affairs and Social Welfare, Virgilia Matabele, on 27 April launched a new fishing project at Corumana, in Maputo province.

This project, to exploit the fisheries potential of the lake formed behind the Corumana dam on the Sabie river, was initially to have been launched in February. But the massive flooding of that month, which cut the entire Corumana area off from the capital, forced a postponement.

The project involves creating and funding a local association of fishermen, who will sell the fish they catch in the lake in Moamba and Boane districts, and Maputo and Matola cities. It is also hoped that some of the fish can be exported to Swaziland and South Africa.

According to the government, the project rests on a philosophy of community development which seeks "to create income generating activities through artisanal fisheries, to build a school with the income earned, to provide social assistance to unsupported elderly people in the village, and, at a later stage, to promote the agricultural development of the community".

Government funding of $20,000 made possible the acquisition of equipment including 10 wooden fishing boats, 120 fishing nets, life jackets, buoys, and a cold store to preserve the fish.

French aid for flood victims

The French government is to provide five million francs (about $708,000) to assist in resettling victims of the floods that struck southern and central Mozambique in February and March.

This aid would allow the purchase and transport of medicines, insecticides, seeds, agricultural tools and school material, particularly for the districts of Magude and Chokwe, in Maputo and Gaza provinces respectively.

Deputy Education Minister appointed

President Joaquim Chissano on 24 April appointed Telmina Pinho Pereira as Deputy Minister of Education.

38 year old Pinho Pereira is a graduate in Veterinary Medicine from Maputo's Eduardo Mondlane University, and since 1995 she has been National Director of Technical and Professional Education.

She has completed a Masters Degree in education from the University College of St, Mark and St. John in Britain, although she has not yet defended her thesis.

Her appointment means that there are now eight women - three ministers and five deputy ministers in Chissano's cabinet.

Anglo-American to resume prospection in Tete

The Anglo-American Corporation is to prospect for deposits of copper, cobalt and nickel in the Moatize and Chipondue areas, in the western province of Tete.

The national director of mines, Estevao Rafael, said that this is a continuation of work begun by Anglo-American ten years ago, but interrupted because at that time Mozambique was still at war.

Rafael believed that Tete possesses considerable unexplored mineral potential. He pointed out that the geology of the province is not well known, because it had been the scene of military conflict for so long - first, in the war for Mozambican independence, and later in the war of destabilisation against the Mozambican state.

Zimbabwean farmers visit Manica

The crisis over land occupations in Zimbabwe is stimulating hundreds of Zimbabwean commercial farmers to enquire into the possibility of shifting their businesses to Mozambique.

Discussions have been under way for the past two years about settling 150 white Zimbabwean farmers in sparsely populated parts of the central province of Manica. Provincial governor Felicio Zacarias says he expects 40 of them to be in Manica in time for the next planting season.

But the number of Zimbabwean farmers interested in moving has increased dramatically over the past week or so. Over 300 of them have visited Manica, since the current wave of land occupations began.

The Mozambican government believes that plenty of land is available for commercial farming in Manica, and that settling the Zimbabwean farmers here will not lead to land conflicts.

Zimbabwean commercial farmers are expected to invest about $27 million during their first five years of activity, and create 40,000 jobs for local residents.

An agreement to this effect has already been signed between the Mozambican authorities and the Zimbabwean commercial farmers association. The final details are now being worked out.

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