Mozambique News Agency

No.190, 5th September 2000


Council of Ministers meets in Angoche

The Council of Ministers (the Mozambican Cabinet) on 1 September discussed the development plan for the district of Angoche in the northern province of Nampula. This was the first time the Cabinet has held a meeting outside Maputo. The meeting honoured a promise given by President Joaquim Chissano to the people of Angoche during the 1999 general election campaign.

The plan defines the socio-economic priorities for lifting Angoche out of its current state of poverty and inactivity. It presents a strategic vision for developing a district that once possessed flourishing agriculture, industry and fisheries, but has now fallen on hard times.

The main goal of the plan is to improve the quality of life of the district's population, through greater food security, higher incomes, and more jobs. It also stresses public health, the promotion of social justice, and, above all, education as the essential requirement for developing the human resources of the district.

When he started his week long visit to Nampula on 28 August, President Chissano recognised the serious difficulties facing Angoche district. "Angoche is disappearing. We have to discuss ideas together, and unite our efforts in order to save it", he said.

Opening the Cabinet meeting, the President said Angoche should be the pivot for the entire southern region of the province, which also covers the districts of Mogincual, Mogovolas and Moma. The problems plaguing the district in general, and Angoche town in particular, he added, demand that the government pay greater attention in order to avoid losing a potentially rich region which should be one of the main poles of development in the province.

Once Angoche possessed three cashew processing factories, a rice dehusking plant, and a fish processing unit. These, once the engine of the district's economic life, are now all paralysed and their workers unemployed.

Commercial activity is also largely at a standstill, which is blamed on the war of destabilisation (even though the war ended in 1992). The fishing port is moribund. Although fishing projects for Angoche have been approved, they have not come to fruition, apparently for lack of finance.

President praises people of Mogovolas

President Joaquim Chissano praised the attitude of the people of the district of Mogovolas, in Nampula province, who rejected the calls of "certain sectors of the country's opposition" to disobey the established authorities. He was addressing a rally in the Mogovolas district capital, Nametil on August 30th.

President Chissano described as encouraging the people's attitude of rejecting "the calls of those who want to sabotage the reconstruction work, development and the fight against poverty".

"The work to reactivate our programme has already begun, Mogovolas is showing the results of that work", said President Chissano, adding that "nobody should agree to be guided by those who are not interested in the development of the country".

As examples of positive work in Mogovolas, he mentioned the supply of electric power to the district from the Cahora Bassa dam on the Zambezi, and the installation of telephone services, which he said were only possible thanks to the commitment shown by the government.

President Chissano said that Mozambique currently "lacks most of the things to satisfy its people's basic needs, which means that the country is still poor". "Lack of water is a sign of poverty; lack of schools is a sign of poverty; absence of girls in the existing schools is a sign of poverty", said Chissano, stressing that "our great challenge is the fight against poverty".

He expressed hope that Mozambique will eradicate absolute poverty by the year 2008, but he noted that for that purpose, all Mozambicans should cooperate between themselves, and with the government, otherwise all efforts made so far would be in vain.

Mogovolas is a district where the main opposition party, Renamo, won the largest number of votes in the December 1999 elections.

North-South road returning to normal

The road links between the north and south of the country are gradually returning to normal, and the stretches most heavily damaged by the February and March floods are expected to be fully repaired by late October.

Joaquim Cossa, of the Public Works and Housing Ministry, gave positive marks to the work undertaken by the South African construction company Wilson Bayly Homes, which has been given the contracts for the two worst-hit stretches of the country's main north-south road. These are just outside the 3rd February village, some 90 kilometres north of Maputo, and the ten kilometres or so between the Gaza provincial capital, Xai-Xai and Chicumbane.

Sofala governor cancels export of logs

The governor of the central province of Sofala, Felicio Zacarias, has declared illegal the export of logs by the company Marco International, through the port of Beira, and has ordered the "immediate cancellation" of such exports, reports the Beira daily paper "Diario de Mocambique".

The company has been exporting unprocessed logs to Asia, bought from small logging operators in Sofala and the neighbouring province of Zambezia, for more than 10 years.

Zacarias claimed that, according to the law, no timber should be exported in the shape of raw logs, because taxes are fixed according to the quality of the product, which can only be properly determined after processing.

He took this decision during his visit to the port of Beira, on 30 August. The port is currently managed by the Cornelder de Mocambique company, in which the Dutch firm Cornelder is the dominant partner.

Marco International was operating under a licence issued by the Sofala Directorate of Industry, Trade and Tourism and authorised by the local customs services. Hence the port authorities denied any responsibility for what Zacarias regarded as an illegality.

Zacarias summoned the provincial directors of Industry, Trade and Tourism, of Planning and Finance, and of Agriculture and Rural Development, as well as the head of the Beira customs services, for a meeting behind closed doors, to discuss the export issue. Zacarias noted that "the country is losing a lot of money with such exports of raw logs, which is not allowed".

Muteia suspends forestry and wildlife official

Agriculture and Rural Development Minister Helder Muteia has suspended a senior official in his ministry in connection with the fraudulent issuing of licences for the exploitation of timber in the central province of Zambezia.

Apart from the suspension, Muteia has also started disciplinary proceedings against the official, Hilario Patricio, head of the Provincial Forestry and Wildlife Services (SPFFB), according to "Noticias" on 25 August..

In coordination with the Zambezia authorities, Muteia has also decided to cancel the issuing of new licences by the Agriculture and Rural Development Provincial Directorate (DPADER) for timber exploitation, and has instituted an in-depth study in the area, aimed at discovering eventual irregularities.

The DPADER and the National Forestry and Wildlife Directorate (DNFFB) have been given two months to come up with a solution to the current scenario which is characterised by indiscriminate logging and the sale of excessive volumes of logs.

The paper says that in July a commission was set up to investigate alleged illegal issuing of licences, which found that people without the power to do so were issuing them. The commission found out that from April to June 13,200 cubic metres of logs were authorised through these illicit channels: through the legally established mechanisms, only 6,095 cubic metres were authorised.

Demining costs $20 million a year

Mine clearance costs Mozambique about $20 million a year, paid for by various international donors, reports "Noticias" on 1 September. Citing the director of the National Demining Institute, Artur Verissimo, the paper says that most of that money is managed by foreign NGOs, or by the United Nations Development Programme (UNDP).

Verissimo was speaking in the central city of Chimoio, on 31 August, at the end of a workshop on the activities of mine clearing organizations countrywide. He explained that mine clearing activities are currently more directed to the southern and central regions of the country because these were the main battlefronts in the war of destabilisation, and hence this is where more infrastructures are located in mine infested areas.

The February and March floods, that hit southern and central Mozambique, had the effect of removing some of the land mines from known and demarcated areas to other places, previously regarded as safe. This called for fresh identification of the dangerous areas.

Verissimo said that his institution has just completed the post-flood demarcation work. "We are now in a position to resume mine clearance in southern and central Mozambique, but we have not yet received the money, about $6 million, that the government requested at the Rome conference", he said. Mine clearance is a relatively small component in the government's appeal for $450 million. Donors pledged to meet the appeal in full, but it is taking time for the money to trickle in.

Customs alters rules for imports by rail

The Mozambican customs service is to end the practice of using Maputo central railway station to clear goods imported by train from South Africa. As from 11 September all commercial cargo carried by rail from South Africa must be sealed in designated wagons, and taken to the Rail Cargo Terminal at the outlying Maputo suburb of Mahotas for clearance.

This is a very substantial tightening of procedures which will hit informal traders who have often tried to evade paying duty at Maputo station.

The imports will be put into the designated wagons, not at Ressano Garcia, on the Mozambican side of the border, but at Komatipoort in South Africa. The goods will be listed on a manifest at Komatipoort by Mozambican customs staff "at the invitation of the South African Revenue Service".

Customs lists convenience and security as reasons for the change. At neither the Ressano Garcia station, nor the Maputo passenger terminal is there secure space for customs to carry out the necessary examinations of goods and collection of revenue. Among the inconveniences of the Maputo passenger terminal are power cuts, sometimes forcing customs staff to work by candlelight.

ESKOM rehabilitates power supply in Gaza

The South African electricity company ESKOM has provided 2.5 million rands (about $360,000) from its flood relief fund to repair damaged power lines and other electrical equipment in the southern province of Gaza.

A team from ESKOM arrived in Mozambique on 9 August, and within 11 days had restored the power supply to the town of Chibuto. This town draws its power from the neighbouring district of Chokwe, and in the Limpopo flood of late February several pylons on the transmission line were washed away.

Under an agreement with the Mozambican electricity company EDM, ESKOM is working to restore electricity supplies in the Chokwe region back to their pre-flood situation.

ESKOM and EDM are building a new line from Chibuto to Chonguene, a distance of about 30 kilometres. This will link up with the power supply in the provincial capital Xai-Xai, thus providing a back-up system in the event of future major power failures in the Chokwe/Chibuto region. The ESKOM Chokwe project should be concluded by mid-November.

EDM has funds to rehabilitate southern power grid

The Mozambican publicly owned electricity company, EDM, says it has $25 million available for the rehabilitation of its infrastructures destroyed by floods earlier this year, in the southern part of the country.

The director of EDM's southern region, Jose Neves, said that of that amount, $12 million is earmarked for the city of Matola, in Maputo province.

He also said that another project that will have a major impact in the southern region, by stabilising the flow of electric power, is the installing of a 400 Kv substation in Beluluane, just outside Maputo, operated by the MOTRACO consortium formed by EDM, the Swazi Electricity Board (SEB), and the South African electricity company ESKOM. The main purpose of MOTRACO is to supply power to the MOZAL aluminium smelter at Beluluane.

Neves said that the number of EDM's clients increased from 40,000 to 116,000 between 1975 (the year of Mozambique's independence) and 2000. He explained that this represents just the response capacity of the company, because there are about 12,000 applications every year, and several neighbourhoods in Maputo and Matola need an extension of the grid, which calls for further investment.

The power generated by EDM has increased from 69 megawatts in 1975 to 135 megawatts today. According to Neves, power consumption rose from 560 gigawatt-hours in 1975 to 850 this year.

Electricity available for major projects

South Africa has agreed to make energy available for two major industrial projects in Mozambique, Finance Minister Luisa Diogo announced in Maputo on 24 August.

The two projects concerned are a proposed aluminium smelter in the central port city of Beira, and a titanium smelter in Chibuto district, in the southern province of Gaza. Diogo said that the electricity needs for the two projects amount to 800 megawatts.

She added that the power from the two projects will come from the South African electricity company ESKOM "until Cahora Bassa is restructured. This will not deprive Cahora Bassa of a market".

Cahora Bassa, the giant dam on the Zambezi in the western province of Tete, sells most of the power it produces to ESKOM, but at a price fixed in 1988 which the dam operating company, HCB, regards as derisory.

Under the 1988 agreement, ESKOM buys power from HCB for just two South African cents (less than a third of a US cent) per kilowatt hour. HCB wants to double the price. Despite the Mozambican government's misgivings, the company lost patience with ESKOM and has taken the matter to international arbitration.

MISP launches geo-technical studies

The Maputo Iron and Steel Project (MISP) has taken a further step towards becoming a reality with the launching on 24 August of a geo-technical study. The study marks the penultimate stage of the project, after which work to build a factory to manufacture steel slabs will start at Mulotane, about 17 kilometres from central Maputo. The factory is to produce about four million tonnes of steel slabs per year. It will be virtually a next door neighbour to the recently concluded MOZAL aluminium smelter.

The study, to be undertaken on 400 hectares of land at Mulotane, will be followed by a similar study at the Matola industrial port from which the steel will be shipped.

MISP will use magnetite from Phalaborwa, in South Africa, and natural gas from Pande, in the southern Mozambican province of Inhambane.

The project will cost about $1 billion to build, while the pipeline to bring the gas from Pande to Maputo (a distance of 610 kilometres) is budgeted at a further $500 million. It will employ 5,000 workers during the construction stage, and 1,500 during the operating phase.

Preliminary studies had shown that the Mulotane area offers good conditions to house the project. But the investors, the US corporation Enron, and its five partners, the Swiss steel company Duferco, Kobe Steel of Japan, Midrex of the United States, VAI of Australia and Technint of Italy, has embarked on further studies on the soils of the site.

Dominic Faccone, MISP Director General, said that construction will be done in two stages. The first is to start in 2002. During this phase, the project will produce two million tonnes of iron and steel slabs about nine inches long, used in the manufacturing of vehicle and fridge body parts. The biggest market is Asia. He said that Mozambique's main competitors - Brazil and Mexico - are located in unfavourable part of the world comparatively. The second stage is set to start in 2004/5.

Faccone said that all the negotiations with the South African company SASOL, for the building of the gas pipeline, and with Mozambique's Southern Regional Water Board (ARA-Sul) and the publicly-owned electricity company, EDM, for the supply of water and energy, will be over by September.

Ribaue school extremely degraded

The secondary school in the district of Ribaue, in the northern province of Nampula, is extremely degraded and offers no decent living conditions for its 913 students. Nampula provincial governor Abdul Razak Noormahomed found, on a visit to this institution, that the school has no water, no functioning toilets, no beds, no mattresses, no blankets, and no glass in the windows. Noormahomed, a medical doctor and a former deputy health ministers, found that most pupils are in a poor state of health.

In order to take a bath, the pupils have to go to a nearby river, about two kilometres from the school. Because there is no water on the premises, the toilets have been closed for years. Those who can afford to, buy their own bamboo beds and blankets, while those from poorer families sleep on the cement floor, using their clothes as blankets.

"I confess that I never expected what I found in that place", said the shocked governor after his visit. He promised to contact the central government in an attempt to improve the situation.

Treatment of cashew trees improves productivity

The Mozambican Cashew Promotion Institute (Incaju) says it is committed to a full chemical treatment of cashew trees as a means to improve cashew nut production "in the short term".

Incaju director Clementina Machungo explained on 29 August that the ongoing chemical treatment leads to "immediate results", and "this is what has allowed us to increase our production".

Machungo said that about 300,000 cashew trees were sprayed this year, compared with the initial target of 86,000. She added that results show that treated trees can produce a harvest of up to 10 kilos of cashew nuts each. (The yields from untreated trees are much lower: reports from Nampula province, the major cashew producing area, speak of an average of 2.7 kilos per tree.)

"This shows that this is a worthwhile investment", said Machungo, adding that "our intervention will cover not less than one million trees next year, particularly in Nampula, Cabo Delgado, and Zambezia provinces".

In 1999, Mozambique produced 52,000 tones of cashew nuts, compared with the expected 60,000 tonnes, and Machungo blamed this shortfall on the floods and cyclone that hit the southern provinces of Gaza and Inhambane, in February and March.

The last cashew census, of 1993, counted about 26 million cashew trees, but this figure dwindled in subsequent years, due to several factors (including uncontrolled bush fires). However, Machungo says that productivity has been growing gradually during the last few years, thanks to various efforts.

Machungo blamed low levels of productivity on fungal diseases, associated with the old age of much of the cashew orchard.

Preferential interest on flood-related loans

Credit provided by the US Agency for International Development (USAID) to help Mozambican private companies recover from the catastrophic floods of February will bear an interest rate of eight to 10 per cent.

The national director of domestic trade, Luis Sitoe, made this announcement on 23 August at a Maputo meeting between government officials and businessmen, chaired by Industry and Trade Minister Carlos Morgado.

Ever since the floods, businesses have been clamouring for low interest loans in order to help them rebuild. The current interest rates offered by commercial banks are 20 per cent or more: the rate offered on the USAID money is less than half of this.

Nonetheless, some participants at the meeting thought that even eight to 10 per cent was too high. Pacheco Faria, of the ENACOMO group, argued that there should be differential interest rates, with agricultural activities paying a lower rate than industrial ones, and with the highest rates reserved for commercial activities.

Faria and other speakers were worried that access to the USAID money might prove difficult because many businessmen in flood-stricken areas have nothing to offer banks as sureties. "The goods that might once have been offered as guarantees for bank loans have now been destroyed or severely damaged", said Faria.

The money available from USAID for these credits is about $8 million. This is part of a $17.5 million injection of funds, around half of which will be spent on direct support for households hit by the floods.

Sitoe said that loans of up to $300,000 would be available from the USAID money, and the first of these loans would be available in the second half of September.

The maximum repayment time will be seven years, with a maximum period of grace of two years. But Sitoe said the banks would negotiate this on a case by case basis.

The USAID money will be deposited in an account at the central bank, and then transferred to the relevant commercial banks as each project for use of the funds is approved.

Sitoe stressed that certain industries have been excluded from this scheme. Thus the money may not be used by sugar companies, two of which were severely hit by the floods. USAID has also excluded companies in Maputo city from the credits, even though parts of the capital were badly damaged in the February catastrophe.

Sitoe stressed that the funds must not be used to pay off any previous debts. He added that each project would be subject to auditing by independent auditors.

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