Mozambique News Agency

No.194, 6th November 2000


Government reports on flood damage and reconstruction

Finance Minister Luisa Diogo told the country's parliament, the Assembly of the Republic, on 24 October that total losses, direct and indirect, to the Mozambican economy arising from the February cyclones and floods are now calculated at $600 million.

Giving a report from the government on flood damage and the efforts at reconstruction, Diogo said this figure broke down into $273 million in physical damage and destruction, $247 million in lost production, $48 million in lost exports, and $31 million in increased imports.

She said that the impact of the floods has forced the government to reduce its projections for this year's economic growth downwards from 6 percent to just 3.8 per cent growth in Gross Domestic Product. Projections for inflation in 2000 have been adjusted from less than 10 per cent to 12 per cent.

Diogo confirmed that most of the money for post- flood reconstruction pledged at a donors' conference held in Rome in early May has not yet arrived. At Rome, donors promised $452.9 million dollars. So far, however, donations reconfirmed amount to $259 million, of which $146.2 million correspond to bilateral agreements. Just $69 million has so far been disbursed.

For the first time, donors agreed to finance the Mozambican private sector. The government had asked for $77.7 million for the reconstruction needs of private companies hit by the floods. Donors have promised $40 million, of which $17.5 million has been made available.

This money will be disbursed in the form of bank loans at preferential interest rates. Diogo said the interest rates charged will be between eight and 10 percent, with a grace period of a year, and repayment periods of up to five years.

Diogo said $10.5 million has so far been spent on repairing roads damaged by the floods, notably those stretches of the main north-south highway that were cut by the Incomati river, and by the Limpopo .

The floods completely paralysed all railway lines in the south of the country. Nonetheless, the publicly owned ports and railway company, CFM, was able to reopen the lines from Maputo to South Africa and Swaziland in late February, and by June, the worst-hit railway, the Limpopo line that runs from Maputo to Zimbabwe, was reopened as far as Chokwe, in Gaza.

The total cost of repairing flood damage to the railways was $7.3 million, of which only $1.1 million came from a donation. The rest was CFM's own funds. A further $60 million is expected (mainly from the United States) which will allow the thorough rehabilitation of the Limpopo line.

In order to rescue some of the 2000 harvest in flood-hit areas, kits of seeds and tools for use in the second plantings were distributed to 155,000 families. However, this was only 71 per cent of the 218,000 families in need.

For the 2000/2001 agricultural campaign, the government plans to distribute 97,478 kits to peasants in the provinces recovering from the floods.

Diogo said that 43,400 families needed resettlement, 22,000 plots of land have been demarcated, and 9,800 new houses have been built. In addition, a number of families have been provided with building materials.

Diogo said that, at the height of the crisis, when there were 80,000 people crammed into the largest government accommodation centre (at Chihaquelane in Gaza), it was "miraculous" that major epidemics had been avoided.

In the flood stricken areas, malaria was rampant. Thus in Gaza, from January to July, 495,804 cases of malaria were diagnosed, 222 of whom died. As for the rainy season that is now starting, Diogo said that the latest SADC (Southern African Development Community) weather forecasts indicate that central Mozambique is particularly at risk of higher than normal rainfall.

Debate in Assembly

On 25 October the Assembly continued the debate on reconstruction. However, it was hindered by Renamo, who claimed that the government's report on the matter was incomplete.

Renamo deputy Luis Boavida claimed that before any debate could be held, a "previous question" should be answered - namely why the government report scarcely mentioned Cyclone Hudah, which had struck parts of northern Mozambique in April, and concentrated entirely on the February disaster in the south and centre of the country. Boavida claimed that the government was thus undermining national unity.

He was backed up by other Renamo deputies, but Assembly chairman Eduardo Mulembue overruled this attempt to block debate.

Most of the Renamo speeches complained of alleged discrimination amongst disaster victims, and that the government was only interested in the southern provinces.

"In the south, houses are being built of cement, but in the centre and north there is nothing", claimed Almeida Tambara.

"Anything north of the Save (the river marking the boundary between southern and central Mozambique) doesn't count for Frelimo ", exclaimed Manecas Daniel. "It is Frelimo and not Renamo that has a plan to divide the country".

"The people received no support", he said. "I am aware that the floods in the south were extremely serious. But those who live in Nampula and Zambezia are also Mozambicans. If we accept this report, we're in favour of dividing the country".

Facts about Hudah were contained in the report, given on 24 October, by the Assembly's own Social Affairs Commission, which sent teams to Nampula and Zambezia (including Frelimo and Renamo deputies) in May.

The Commission's report gave the total death toll from Hudah as six (four in Zambezia and two in Nampula). The main damage was to about 3,700 houses, mostly traditional huts. In the February catastrophe, when every river south of Beira burst its banks, the death toll that reached 699, and 650,000 people were affected.

The Social Affairs Commission concluded that in Nampula "the situation of natural disasters is not alarming" - a judgement from which the Renamo members of the Commission did not dissociate themselves.

Only one opposition deputy treated Diogo courteously. He was Maximo Dias, general secretary of the Mozambican National Movement (MONAMO), one of the minor parties allied to Renamo in the Electoral Union coalition. His references to the government won him dismay from his own side, and applause from the Frelimo benches. "Whether we like it or not, this is the de facto government", he said. He even praised Diogo for "your competence in the economic and financial areas".

But Dias went on to criticise the government for not providing enough support for businesses hit by the floods. He called for loans to such businessmen at interest rates lower than those proposed by the government. Dias called for these loans to be interest free, or for an interest rate that would just cover the administrative expenses.

Jose Samo Gudo, from another of Renamo's coalition partners, FUMO (Mozambique United Front), wondered if the banks would demand guarantees from those applying for loans: if so, what guarantee could a businessman who had lost everything in the floods give ? He called for different interest rates and repayment periods - one for circulating capital, and a more favourable one for investment.

For Frelimo, Carolina Chemane said that business people complain that they were not consulted about the forms of credit they are being offered. She said they are also "harassed" by tax collectors about this year's corporation tax - even though the Finance Ministry has said that corporation tax will not be demanded from flood-stricken businesses this year.

From both Renamo and Frelimo deputies came calls to improve the quality of houses provided for resettled victims.

The Minister of Public Works and Housing, Roberto White, said that most of the donor money for resettlement is channelled through NGOs. The government had tried to give some guidance as to the sort of houses that should be provide - but some of the "solutions" found by NGOs "are not to our liking, such as the houses that have been built without windows".

He stressed that his Ministry's first concern had been to restore supplies of safe drinking water, since the floods had knocked out and contaminated large numbers of wells. According to White, 135 new wells and boreholes had been provided in the central provinces (75 in Sofala and 56 in Manica), and 117 in the south (48 in Inhambane, 49 in Gaza and 20 in Maputo).

PROAGRI 2001 gets green light

Agriculture and Rural Development Minister Helder Muteia on 3 November said that all conditions for the continuous implementation of the country's National Agriculture Development Programme (PROAGRI) have been met.

Speaking to journalists in Maputo at the end of a three-day meeting to evaluate the current status of PROAGRI, Muteia said that the project's donors had guaranteed funding for the implementation of activities for 2001.

PROAGRI started implementation in 1999, and it will cost about $202 million during it five-year period, with donors disbursing $42 million each year.

Muteia also said that under the project his ministry has to train cadres to work in provinces, and currently 24 technicians are being trained. The ministry envisages transferring of a further 40 technical staff to districts that will have a pivotal role in the implementation of the programme in their catchment areas.

The ministry is also to revise the list of products to be included in the KRII Programme signed with Japan - under this programme the ministry imports chemicals from Japan.

Calls for sweet potato planting

The Mozambican scientific community has called for the massive planting of a variety of sweet potato with an orange pulp to eradicate malnourishment and supply vitamin A.

The call was made on 24 October in Maputo during a national seminar on the promotion of the planting of the orange pulp sweet potato. According to Isabel Andrade, the coordinator of the regional research network (SARRNET) for root crops like sweet potatoes and cassava, the promotion of orange pulp sweet potato is an alternative aimed at reducing the high costs involved in the purchase of vitamin A capsules - a strategy currently used to deal with deficiency in the vitamin.

For his part, Manuel Amade of the National Agricultural Research Institute (INIA) claimed that, if the planting of this variety of sweet potato is well received in the countryside, it will be possible to cut child deaths caused by diseases such as measles by about 50 per cent. He believed that the child mortality rate can be reduced to between 25 and 35 per cent, without spending vast sums.

The total land where the bulb is currently planted is just 55 hectares in the southern provinces of Maputo and Gaza. The authorities are to distribute sweet potato seeds to 91,000 families in the two provinces, and a further 15,000 families in the central Sofala province in November.

Incomati water for MISP

The government believes that the Incomati river can be used to supply the huge amounts of water required by the planned Maputo Iron and Steel Project (MISP), according to the Minister of Public Works, Roberto White.

MISP is a factory that would produce two million tonnes of steel slabs a year, using magnetite from South Africa and Mozambican natural gas as its main raw materials.

Water for the project has been a headache. Steel plants use enormous quantities of water for cooling: initially it was said that MISP would require 67 million litres of water a day, a figure that was later scaled down, with no explanation, to 15 million litres a day.

The government has always made it clear that MISP cannot take its water from the nearest large river, the Umbeluzi, which is the source of Maputo's drinking water.

White said evaluation shows that the Incomati river could be used by MISP. This was because of the storage capacity of the Corumana dam, on the Incomati's main tributary, the Sabie.

This, however, would require a lengthy pipeline to carry the water to the MISP site on the outskirts of Maputo. There is a growing demand for Incomati water for agricultural purposes, notably by the two sugar plantations on the lower reaches of the river.

Agreement on natural gas

The Mozambican government, the state-owned National Hydrocarbon Company (ENH), and the South African company SASOL, on 26 October signed three agreements on the joint development of the Pande and Temane natural gas fields in the southern province of Inhambane, and on a gas pipeline to South Africa.

Under these agreements Pande and Temane will be treated as a single field. ENH and SASOL (the former with a 30 per cent share, and the latter with 70 per cent) will work in partnership to develop the two fields. Sasol will also have rights to prospect for hydrocarbons in the areas surrounding the known Pande and Temane deposits.

Under the pipeline accord, SASOL and an ENH subsidiary will jointly own and build a pipeline from Temane to Ressano Garcia on the South African border, which will take 120 million gigajoules a year to South African clients. Gas will also be transported to Maputo, for use in the Maputo Iron and Steel Project (MISP).

The pipeline will also freely transport a share of the Mozambican government's royalty gas to up to five points along the pipeline route.

This agreement means that the American corporation ENRON has given up its rights to the Pande field.

Building of the pipeline is scheduled to start in June 2001, and will be concluded in 2004. The total length of the pipeline, from Temane to Secunda, will be 895 kilometres.

According to SASOL, the focus will first be on Temane, where the gas is at significantly higher pressure than at Pande.

Agreement on heavy sands

The Mozambican government and the mining company, Corridor Sands, signed two agreements on 27 October that establish the guidelines for mining heavy sands in the district of Chibuto, in the southern province of Gaza.

The project is costed at about $1 billion, and will involve the transformation of ilemite, a heavy mineral found in the sands, into titanium, zirconium, and ruthenium.

The agreements cover the mining of heavy minerals, and the establishment of a processing plant and smelters, as well as fiscal benefits.

In the initial stage Corridor Sands would spend about $500 million on mining activities, starting in 2002.

Denmark pledges $200 million

Denmark has pledged to commit about $200 million to finance development projects in Mozambique, until 2004.

The amount covers technical assistance, support for environmental projects, and support for the development of the private sector in a business-to-business programme.

The two governments have a strategy under which cooperation is concentrated on agriculture, education and energy supply. Furthermore, Mozambique receives general budget support and support for democratic institutions such as the parliament and legal system.

German funds for road rehabilitation

The Mozambican and German governments signed an agreement in Maputo on 31 October, under which the latter is to provide a credit of about $6.5 million for a post-flood road rehabilitation project in Manica and Sofala.

The credit, to be channelled through the German Rebuilding Credit Institute (KFW), is part of the pledges made by Germany at the donor conference on post-flood reconstruction needs held in Rome in early May.

Nigeria donates maize

The Nigerian government on 24 October delivered a consignment of 730 tonnes of maize to be distributed to victims of the February floods.

At the height of the floods Nigeria had contributed to the relief efforts by dispatching a C-130 transport aircraft containing a cargo of goods such as clothing, soap, blankets and medicines.

Taxes hinder power reinstatement in Maputo

The emergency repair of the electricity grid in the cities of Maputo and Matola, damaged by the torrential rains and floods of February, has been held up because of delays in securing from the Finance Ministry exemptions from customs duties and Value Added Tax (VAT) on imports of necessary equipment, reports "Noticias" on 4 November.

The Danish International Development Agency (DANIDA) has pledged a loan of $12 million for the rehabilitation of the electricity grid in Maputo and Gaza provinces. In Gaza some of the ongoing rehabilitation work is being funded by the South African electricity company ESKOM.

EDM is planning to use the DANIDA money to rehabilitate the power lines to four Maputo and seven Matola suburbs, and also to make repairs in some outlying districts of Maputo province.

Border posts to issue visas

The Mozambican government is introducing new procedures, whereby visas can be issued at border posts.

Under previous policy, all visitors to the country were supposed to obtain their entry visas from Mozambican embassies or consulates. Under the new regime, an entry visa will cost 300,000 meticais (about $18) paid at the entry point, and its renewal will cost 150,000 meticais.

Tourism Minister Fernando Sumbana said that the implementation of the new system will start at those border posts where the technical conditions for issuing visas already exist.

Deputy Attorney-General appointed

President Joaquim Chissano has appointed Edmundo Alberto as Deputy Attorney-General. Alberto was Deputy Interior Minister from 1991 to 1996, but was removed at the same time as Interior Minister, Manuel Antonio, who was sacked following repeated scandals in the police and prisons.

President Chissano removed all the top figures in the Attorney- General's office in July. The office had fallen into disrepute with public battles conducted in the media between the then Attorney-General Antonio Namburete and one of his assistants, Afonso Antunes.

The major issue was the failure of the Attorney-General's Office to bring to justice any of those implicated in the country's largest bank fraud - the theft of 144 billion meticais (about $14 million at the exchange rate of the time) from the Commercial Bank of Mozambique (BCM) in 1996.

Cuba pledges anti-malaria technology

The Cuban government has pledged to make available to Mozambique the necessary technology for the manufacturing of an anti-malaria chemical product, Grislet.

Pedro Gonzalez, the Cuban ambassador in Maputo, told AIM that the efficacy of Grislet has been tested by both Mozambican and Cuban experts, and the results were encouraging. The product is directly applied to stagnant waters where mosquitoes breed, and has a 100 per cent efficacy. Furthermore, it is environmentally friendly.

Salted cashew nuts for European market

A small scale cashew producer in northern Mozambique claims that his factory will be the first Mozambican cashew processor to export nuts that are salted and packaged, ready for consumption.

To date, according to Jurg Reisser, director-general of Cabo-Caju, in the northern province of Cabo Delgado, Mozambique has only exported a semi-finished product.

Reisser, said that his company will shortly start exporting 6,000 kilos per month of entirely processed, packeted and ready for table nuts to guarantee its sustainability.

The nuts will bear the brand of the Portuguese coffee company, "Delta Cafe".

Cabo-Caju was built from scratch through World Bank funding to the tune of $1.4 million. The company has the capacity to process 1,200 tonnes of raw nuts a year, and it started operations with 150 workers. It is expected that the figure will increase to 350 within two to three months when it reaches full production.

Governor against late payment of wages

The governor of the northern province of Nampula, Abdul Razak Noormahomed, has hit on a novel approach to the problem of late payment of wages to teachers, health workers and other state employees.

Razak has ordered that as from now Nampula Provincial Directors will not receive their salaries until all their subordinates in the outlying districts have been paid.

Noormahomed had been angered on his visits around the province to find that regularly people on the state payroll did not receive their wages before the end of the month. Thus in the district of Lalaua, he found that some 200 teachers and other education staff had not been paid for the previous two months.

President sacks deputy minister

President Joaquim Chissano on 27 October sacked a deputy minister less than a fortnight after appointing him.

A presidential dispatch of 17 October appointed Santos Gonzaga Jeque as Deputy Minister of Youth and Sports, and Chissano swore Jeque into office on 25 October.

But Jeque, a former footballer, had tried to conceal details of his past from the President. In 1997, Jeque had been expelled from the state apparatus for a serious disciplinary offence.

By serving in the government for just ten days (or only two, if counted from the date of his oath of office), Jeque has set a record, albeit not one to inspire much pride.

Sofala governor hails economic success

Exports generated by the central province of Sofala have increased by 60 per cent since 1996, according to provincial governor Felicio Zacarias, speaking at a session of the provincial government held on 2 November in the district of Gorongosa, and chaired by President Joaquim Chissano.

By far the most important export from Sofala is prawns, which accounted for 61 per cent of the total. The province's other major exports are timber and cotton.

Zacarias said that over the same period the province's imports had shrunk by 26 per cent. This was largely because Sofala had become self-sufficient in grain.

The health service in Sofala had expanded by 50 per cent - from 101 health units in 1995 to 151 units in 1999, with a similar success in education, water supply, and the expansion of the telecommunications network.

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