Mozambique News Agency

No.205, 20th April 2001


Growth lower than expected in 2000

The Mozambican economy grew by only 2.1 per cent in 2000, Finance Minister Luisa Diogo told reporters on 20 April. The final figures for the year are worse than the government's predictions: addressing the Mozambican parliament, the Assembly of the Republic, in December, Prime Minister Pascoal Mocumbi had forecast a 3.8 per cent growth in GDP for 2000. This figure had itself been scaled down from earlier hopes of a growth rate of six to eight per cent.

Diogo said the main reason for the low growth rate was the catastrophic flooding that hit southern and central Mozambique in February 2000. The floods had caused severe damage to agriculture, and to the road and rail network.

The disruption caused to transport links was one of the major reasons for a sharp rise in the inflation rate. In 2000 the average 12 monthly inflation rate was 12.7 per cent (though the end of year rate was 11.4 per cent).

During the year the Mozambican currency, the metical, lost 20 per cent of its value against the US dollar. However, the central bank "worked hard to stabilise the monetary situation", she added. "Matters could have been much worse".

Sectoral performance

Looking at the economy by sector, Diogo said that agriculture had only grown by one per cent (against the 2.8 per cent forecast). Since Mozambique is overwhelmingly an agricultural country, this had a strong influence on the overall performance of the GDP.

She noted declines in the international prices for some of Mozambique's key export crops, such as cotton, copra and cashew nuts (though in the case of cashew, the allegedly poor quality of Mozambican nuts could be a key factor).

Sugar had fallen well below expectations, largely because large parts of the Xinavane and Maragra sugar plantations in Maputo province had been lost to the floods.

The mineral resource sector was also in crisis. Gold is extracted in the northern province of Niassa - but goes straight across the border into Tanzania. It thus ends up in the vaults of Tanzanian banks rather than Mozambican ones. Diogo hazarded a guess that Mozambique could be losing $50 million a year this way.

As for the graphite mine in Ancuabe, Cabo Delgado province, this remains closed: at the current international price for graphite the mineral cannot be exploited at a profit.

Diogo put the growth in manufacturing industry at 13.9 per cent: it would have been higher, she added, were it not for the collapse of the Mozambican textile industry.

The construction sector shrunk - but this was only because most construction work on MOZAL, the enormous aluminium smelter on the outskirts of Maputo, took place in 1999. With no other mega-project under construction, it was inevitable that 2000 would see a fall.

If the MOZAL figures were excluded, said Diogo, then the construction industry showed a growth of 15 per cent.

The transport and communication sector also showed a decline. This was due not only to the floods, but also to the crisis in neighbouring Zimbabwe, which has limited Zimbabwean companies' ability to use Mozambican ports and railways. Thus although the Limpopo railway between Maputo and Zimbabwe was repaired "in record time", said Diogo, "the situation in Zimbabwe meant that not much cargo was carried along it".

One bright spot was commodity exports, which grew by 12 per cent, reaching well over $300 million. If this could be achieved in a year of catastrophic flooding "then we can look with optimism on the balance of payments in a normal situation", said Diogo.

Problems of inflation and devaluation

Double digit inflation and single digit growth was exactly the opposite of what Mozambique needed, said the minister. This year the target is for 10 per cent growth, and for an inflation rate of between six and seven per cent.

The inflation figures for the first quarter of 2001 are encouraging. Diogo said that prices had actually fallen in the first two months, before rising slightly in March.

Diogo recognised that the metical is continuing to devalue, but argued that this was not due to any excess in the money supply, or any shortage of hard currency. Instead, she blamed devaluation on the "dollarisation" of the economy. Diogo attacked businesses who are using a foreign currency as the basis for their transactions.

Diogo described the budget for 2001 as "expansionary". Forecast public expenditure is 19,900 billion meticais (about $1.05 billion). Only 8,400 billion meticais is expected from the Mozambican state's own revenue (mainly taxes). 8,000 billion is expected from foreign grants, and 2,000 billion from foreign credits. The rest will come from the issuing of domestic public debt in the form of treasury bonds.

Diogo pledged that the government would take great care with domestic debt: unlike foreign debt which typically matures over 50 years, and has a grace period of five or ten years, domestic debt matures in at most ten years, and there are no more than a few months of grace.

Floods claimed over 100 lives

The floods that hit the central provinces of Tete, Manica, Sofala and Zambezia from January to March have claimed 109 lives and displaced about 300,000 people, most of whom are now temporarily sheltered in accommodation centres.

Of those deaths, 71 occurred in Zambezia, 28 in Tete, and six in Sofala, confirmed by the governors of the respective provinces, namely Lucas Chomera, Tomas Mandlate, and Felicio Zacarias respectively, during a Radio Mozambique broadcast. There were four deaths in Manica, reported in March by the National Disaster Management Institute (INGC).

In Zambezia, there are 420,000 people affected, 141,000 of whom are displaced, and Chomera said that besides the human toll, the floods also destroyed many tertiary access roads, and a large area of cropland.

As for Tete, Mandlate said that the floods caused serious damage to 121 schools and three health centres.

From Sofala, Zacarias reported, besides the deaths, more than 81,000 displaced people, more than 30,000 hectares of crops destroyed, and 78 classrooms submerged in the flood waters, affecting 27,000 pupils and 300 teachers. The population in accommodation centres include 14,000 in Manica, out of the estimated 74,000 affected from the districts of Tambara, Mossurize, and Sussundenga.

Manica provincial governor Soares Nhaca estimates at about 44 billion meticais (about $2.3 million) the amount the province will need to reopen the access roads.

Post-flood donor conference planned

Mozambique's Disaster Management Coordinating Council (CCGC) is preparing to hold a donors' conference in May intended to raise funds for post-flood reconstruction efforts in the country's central region.

Silvano Langa, the director of the National Disaster Management Institute (INGC), told journalists on 13 April that the decision was taken at a recent meeting of the CCGC, which combed through the preliminary data on the destructive effects of the floods in the provinces of Manica, Sofala, Tete and Zambezia. Langa said that multi-sectoral teams are to start working on the specific components to be presented at the conference.

The INGC estimates that about 500,000 people will need food aid over the next two months in the Zambezi Valley, the area worst hit by this year's floods.

Although the level of the Zambezi and other rivers is now falling, hungry people are still trekking into government-run accommodation centres. About 253,000 people are known to be displaced from their homes, but when those "affected" by the disaster, but who have not been forced to flee their homes, are added, the number in need of assistance rises to around half a million.

Fears of low harvest

The forthcoming harvest may well not reach the target of 1.8 million tonnes of grain because of the floods in central Mozambique, that destroyed about 42,200 hectares of crops, and because of drought, that affected some other parts of the country.

The coordinator of the National Early Warning System for Food Security, Joana Madime, cited in "Noticias" on 16 April, said that the maize harvest is expected to be lower than targeted because of drought and irregular rainfall, particularly in the districts of Chibuto, Chokwe, Guija and Mabalane, in the southern province of Gaza.

The provinces of Manica, Sofala, Zambezia and Tete in the central region fell victim to severe flooding, notably in the Zambezi valley, but Madime expressed hope that the situation will not worsen any further, since the rainy season is over.

Because most of the affected areas are still under water, the only crop for which there are reasonable hopes from a second sowing is rice.

A monthly publication of the Early Warning System writes that the floods destroyed about 15,500 hectares of crops in Zambezia, determining a reduction in the forthcoming harvest of about two per cent. Sofala lost 10,300 hectares, corresponding to about five per cent, while Tete suffered a loss of 10,700 hectares and Manica 5,700 hectares, corresponding to four and 10 per cent respectively.

Growth in export earnings from fishing

Mozambique's total exports of fisheries products were estimated at 15,800 tones, and valued at about $109.3 million in the year 2000.

These figures are contained in a Report of Activities of the Fisheries Ministry for that period, delivered to the ministry's Coordinating Council that met in the southern city of Matola.

According to the document, these figures represent a growth of 13 per cent in terms of tonnage, and 20 per cent in terms of earnings, when compared with 1999.

But exports by weight were less than the target figure of 16,320 tonnes. Earnings, however, were much more than the planned figure of $87.5 million, due to the increase in the price of a few key fisheries products on the international market.

Prawns are far and away the most important export. Mozambique exported 9,729 tonnes in 2000 which earned $92.4 million. This compares with 8,000 tonnes of prawn exports in 1999, which brought in $72 million. Between the two years the price for prawns rise by six per cent.

Two other fisheries products, lobsters and the freshwater fish kapenta, also showed a significant growth, both in exports and in revenue. Thus Mozambique exported 102 tonnes of lobsters, worth $1.1 million, compared with the 77 tonnes and $847,000 in 1999.

As for kapenta, which is fished on Cahora Bassa lake and exported to Zimbabwe, the document says that the country earned $3.8 million for the export of 3,813 tones, whereas last year had exported 2,832 tones, collecting $3.3 million. (The price for kapenta, however, has fallen by 17 per cent).

Exports of sea fish and of crabs both fell sharply - by 32 and 38 per cent respectively. 631 tonnes of fish were exported compared with 933 tonnes in 1999, while crab exports declined from 120 to 78 tonnes.

Assembly of the Republic

More than 3,000 arrests in Maputo

The current crackdown on crime in Maputo has so far led to the arrest of 3,304 people, and has broken up 36 criminal gangs, 16 of which specialised in armed robbery, according to Interior Minister Almerino Manhenje, speaking in parliament, the Assembly of the Republic, on 3 April.

Manhenje said that the total number of armed criminals arrested in the crackdown was 96, including some of those responsible for murders in the Maputo suburbs, notably the shooting of four people in a bar in Polana-Canico.

The man accused of this crime, a gangster known by the nickname "Mulatinho", was arrested on 30 March, caught re-handed as he attacked a woman.

The police operation targetted the Maputo hillsides overlooking the Indian Ocean. Paths down these hills provide convenient, but dangerous short cuts for people wishing to walk from the higher to the lower parts of the city. The police operations on the hills rounded up 617 alleged criminals.

Police had also struck at parts of the city so notorious for the sale of illicit drugs that they are popularly known as "Columbias". The minister said the police had arrested 168 drug dealers and users, and seized 99 packages of hashish, 320 grams of cocaine, and 30 doses of heroine.

In the period from 26 February to 31 March, the police also seized 460 vehicles, said Manhenje. In some cases, this was because their owners had putt smoked glass in the windows. The police believe that this type of glass is used by criminals to hide their faces, and ensure that no-one can see whether they are carrying guns. One of the cars used in the 22 November murder of Mozambique's best-known journalist, Carlos Cardoso, was said to have smoked glass in its side windows.

But many of the other vehicles were taken off the roads because they were in a dangerous conditions, and thus put the lives of other road users at risk.

Manhenge said that, where those detained were accused of relatively minor offences, summary trials were possible, and the Maputo courts sentenced many of them to between six months and three years imprisonment.

Manhenge was asked about a recent upsurge in crime in the northern province of Cabo Delgado. The minister blamed this on the theft of guns from police arsenals, during the demonstrations organised by Renamo on 9 November last year.

Manhenge said that since the end of the war of destabilisation in 1992 there had been no armed attacks on Cabo Delgado roads - until this January, when there was an attack near the town of Mocimboa da Praia.

Agreement on right to demonstrate

The Assembly of the Republic on 19 April passed the first reading of a bill removing restrictions on the right to demonstrate.

The bill, proposed by the Renamo-Electoral Union opposition coalition, amends the 1991 law that regulates the freedom of assembly. The main change, accepted by the majority Frelimo Party, is to remove the limitation on the days on which street demonstrations can be held. The 1991 law said demonstrations could only be held on Saturdays, Sundays, public holidays, and after 17.30 on weekdays - i.e. not during the working day.

Both Frelimo and Renamo also agree that there is no question of the police, or anyone else, "authorising" demonstrations. Instead, the organisers of a demonstration merely notify the police and the local authorities of their intention to hold a march four days in advance, supplying the time, route and purpose of the demonstration.

Renamo is now pushing for further amendments to the law in the second reading - it wants to abolish the concept of an illegal demonstration.

One article in the current law outlaws any meeting or demonstration whose stated purpose "is contrary to the constitution, the law, morality, public order and tranquillity or the rights of individuals and collective bodies". Renamo argues that this is "subjective", and should be scrapped.

A further Renamo demand is that, even if demonstrations turn into riots, the police should under no circumstances use firearms against them.

Commission of Inquiry extended

The Assembly of the Republic on 11 April decided to extend the mandate of the commission of inquiry established last year to investigate the circumstances of the violent clashes between police and demonstrators organised by Renamo that occurred on 9 November in several towns and cities in the north and centre of the country.

The decision was taken against opposition of the Renamo- Electoral Union coalition, which wanted to scrap the existing commission and set up a new one.

The media are unable to explain the detailed pros and cons of this debate, since journalists and members of the public were excluded from the chamber, and the session was held behind closed doors.

The commission failed to complete its work because in January three of its members suffered serious injuries in a traffic accident.

Frelimo believed that, since the injured deputies are recovering, the commission could and should resume its work, albeit with a delay. Renamo-Electoral Union stated that the time limit for the commission to present its work had expired. Therefore a new commission should be elected. In particular Renamo argued that the three injured deputies, although they are making a good recovery, would be in no condition to travel along badly maintained dirt roads in northern Mozambique, and so could not participate in the commission's work. As two of the three injured were Renamo members it would leave Renamo with just one member, Vicente Ululu, able to work actively on the commission. As Ululu is also chairman of the commission, Renamo argued that and he would be severely overworked.

Given Frelimo's overall majority in the Assembly, its position won when a vote was eventually taken.

Mining of Moma heavy sands in 2003

The mining of heavy sands in Moma district, on the coast of the northern province of Nampula, could start in early 2003, now that the project has been proved viable, writes "Noticias" on 13 April.

The main minerals to be mined at Moma are ilmenite and rutile (two titanium ores), and zircon (zirconium silicate). It is estimated that 650,000 tonnes of the minerals a year would be mined, bringing in annual export earnings of around $20 million.

The Irish-based company Kenmare has set up a subsidiary, Kenmare Moma Mining Ltd, to deal with the project. The company claims that it already has guaranteed buyers (in the United States, Europe, Japan and South Africa) for more than 50 per cent of the potential production.

Total investment in the Moma heavy sands project is put at $160 million, and Kenmare has already spent $60 million in research and preparatory work.

SASOL fails to find big gas reserves

The South African company SASOL has announced that it is postponing further prospection for natural gas in the Bay of Sofala, off the central coast, after seven months of searching has shown no economically viable reserves.

The conclusion was drawn from data assessment of two wells drilled in the Mozambican continental shelf, about 17 kilometres south of Beira.

While the first well did show signs of the presence of gas, the second did not. After $17 million had been spent on the prospection, SASOL took the decision to seal and abandon the two wells.

Failure to find significant offshore gas deposits also means that the final decision on whether to build a petrochemical complex in Beira, that would supply with different types of fuel the whole central and northern region of Mozambique, is also postponed, pending further research. The plant is estimated to cost about $2 billion.

Mozambique's National Hydrocarbons Company (ENH) has not yet given up on Sofala Bay. It intends to continue prospection in cooperation with a Malaysian company.

The Bay is very large, and it is hoped that there are commercially viable reserves of natural gas in areas to the north of where SASOL drilled its wells.

Uncertainty over Tayob's expulsion

The secretary general of Renamo, Joao Alexandre, has expressed surprise at the claim that the Renamo leader, Afonso Dhlakama, has thrown a parliamentary deputy, Rachide Tayob, out of the party.

Alexandre also dismissed the claims of "tribalism" inside Renamo, which Tayob blamed for his expulsion, as "inventions of the enemy".

"I do not have any knowledge of the expulsion of Rachide Tayob. I do not have any knowledge of the National Council or the Political Commission meeting to discuss this case. I have my doubts about that expulsion", said Alexandre. He said that he consulted, on 10 April, with Dhlakama, and with other members of the Renamo secretariat, to discuss the Tayob issue.

However, Tayob himself reaffirmed on 10 April that Dhlakama had notified verbally to leave the party, and had then told him to wait for a formal notification. When no notification came, Tayob decided to break the news.

Sources have suggested that Dhlakama expelled Tayob to avoid repaying the debt that Renamo owes him, estimated at some two billion meticais (about $108,000). This was money spent by Tayob, who is a well-to-do businessman, to help Renamo transform itself from a guerrilla movement into a political party, in 1992.

Tayob declined to confirm or deny these allegations, but said that "two billion (meticais) of a debt is nothing. I will not confirm or deny it, but I think there is much more money involved. But I would prefer to speak of that later".

Fishermen receive boats in Inhambane

The United Nations Food and Agriculture Organization (FAO) on 5 April handed 10 boats to fishermen of the districts of Maxixe and Inhassoro, in the southern province of Inhambane, who were among the victims of cyclone "Eline", which hit the province last year.

The boats go with their respective equipment, including motors, nets, and ropes, and are the first consignment in a total of 200 boats and 90 canoes that will benefit more than 2,000 fishermen from seven associations in Gaza, Inhambane, and Sofala provinces.

This project, budgeted at $2.2 million, was financed by the Italian government, and its main objective is to help fishing communities affected by the cyclone restart their activities. It is expected that, with this equipment, the fishermen will be able to catch about 2,000 tonnes of fish a year, earning about $3 million. The boats must be paid for. Each beneficiary should pay 51 million meticais (about $2,800) in monthly installments of 900,000 meticais. This money will then be used to acquire more boats for more fishermen in the future.

Open heart surgery in Maputo

The newly inaugurated Heart Institute, in Maputo, performed Mozambique's first ever open heart surgical operations between 13 and 17 April.

The institute's director, Maria Beatriz Ferreira, said that of the first ten operations it undertook, nine involved open heart surgery. All the patients were Mozambicans, most of them children from low income families.

The operations were performed with the support of the Swiss humanitarian organization "Coeur Pour Tous" (Heart For All). Three other missions are scheduled to take place before the end of the year.


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