Mozambique News Agency

No.215, 20th September 2001


Mozambican economy resumes rapid growth

The Mozambican economy has resumed high levels of growth, after the setback caused by catastrophic flooding in the year 2000, Finance Minister Luisa Diogo told reporters on 13 September. She said that, despite further flooding in the central provinces between February and April, in the first six months of this year output grew by 14.9 per cent when compared with the same period in 2000.

This growth rate is much higher than the ten per cent or so that was initially expected. A huge contribution to Mozambique's renewed economic growth has been made by the MOZAL aluminium smelter on the outskirts of Maputo, now operating at its full capacity of 250,000 tonnes of aluminium ingots a year. Diogo said that without the MOZAL figures, economic growth was 10.9 per cent.

The importance of MOZAL is even clearer from the export figures: the total value of Mozambican exports from January to June was $307 million. Aluminium produced at MOZAL accounted for 61 per cent of this ($186 million). Indeed, without MOZAL exports would have shown a fall of five per cent when compared with the first half of 2000.

Diogo said that agriculture had grown by 5.2 per cent, with major contributions made by cotton, copra and sugar cane. but there had been a decline of between one and two per cent in maize production. This led to "a certain concern about food security", she said, particularly since many peasants were tending to sell all their maize - meaning that in a few months time they might have none left in their barns to feed themselves.

The construction industry showed a growth of 50.6 per cent. Diogo said this was largely because reconstruction after the 2000 floods is reaching its peak this year.

There was an increase of 50 per cent in rail traffic - this is simply due to the resumption of traffic on the railways in the southern provinces which had all been severely disrupted by flooding last year.

Sugar and textile sectors struggle

But some industrial sectors were in serious difficulty, notably textiles, where most of the major plants are at a standstill or producing at a small fraction of their installed capacity.

The country's sugar mills and beverage companies were in trouble too, but for a very different reason - they are facing fierce competition from contraband flowing over the borders, particularly from Zimbabwe. Smuggled Zimbabwean soft drinks are posing a major threat to the Coca-Cola factory in the central city of Chimoio, she said.

Smugglers are benefiting from the Zimbabwean government's exchange policy. They are playing on the vast differential between the official and the parallel exchange rates for the Zimbabwean dollar, in order to buy up Zimbabwean produce cheaply, and then sell it at a substantial profit in Mozambique.

Diogo said that there is now a coordinated effort involving the provincial governments, the police and the customs service to staunch the flow of contraband. She warned that customs would judge the true value of imports from Zimbabwe by using a reference price, rather than simply accepting Zimbabwean invoices thrust at them by the importers.

The government was also trying to tackle the porous nature of Mozambique's borders. "We know we have lengthy frontiers and many routes by which contraband enters", Diogo said. "Our work with the provincial and district authorities is aimed at dealing with this".

She stressed the government's "full support" for the sugar industry, which is particularly hard hit by contraband. She pointed to the importance of the sugar plantations and mills in generating employment and thus reducing poverty.

"We cannot just be a country of consumers, we must be a country of producers", Diogo declared.

Action to protect Metical

Diogo said that inflation in the first half of the year stood at 5.1 per cent, but by August it had reached nine per cent. As for the Mozambican currency, the metical, it had devalued by 24.9 per cent between January and June.

She said the metical was damaged by the fact that about 50 per cent of all deposits in Mozambican banks are denominated in foreign currency. "This creates a vicious circle", she said. Nonetheless, she thought that the measures taken by the central bank were working, and the currency was stabilising.

Restrictive monetary measures were in place, and the central bank was trying to mop up excess liquidity, through issuing treasury bonds and an increase in the compulsory reserves that the commercial banks must hold with the Bank of Mozambique.

Diogo stated that the government was having some success both in collecting taxes and holding back expenditure. Thus tax collection from January to June was 4.8 per cent higher than the planned figure. Taxes on profits and personal income were a remarkable 15.6 per cent higher than the target figure (which would seem to indicate very substantial evasion of corporation tax in the past). Total government expenditure, including debt servicing, Diogo said, had been held to just 95.6 per cent of the target.

President closes Frelimo cadre conference

Although the ruling Frelimo Party guides the Mozambican government in implementing its programme, the party and the government must be viewed as separate entities, President Joaquim Chissano insisted on 16 September.

Speaking at the end of a three day national conference of Frelimo cadres, held in the central city of Beira, President Chissano said "the debates have shown that, in the multi-party regime under which we live, we must always bear in mind the difference between the Party and the government".

Although Frelimo guided the government, "the internal dynamic of the Party must be independent from that of the government", he stressed.

There have been repeated complaints from some sections of Frelimo that the government goes its own way, regardless of Party guidelines. President Chissano did not seem to agree. "The Party implements its policy through the government", he said. "The government is an instrument of the Frelimo Party, the product of victory in the last elections. The government's five year programme is nothing but a translation of the Party programme that was accepted and legitimised by the popular vote".

Implementation of the government programme "is the task of all party members and sympathisers, and of the people in general", he added. "Successes in governance are victories for the Party and its members".

President Chissano stressed that Frelimo's top priorities remain "the struggle against absolute poverty, the reduction of regional imbalances, and rural development".

He also called for establishing "an environment favourable for both public and private investment, particularly in the countryside. At the same time, we must promote the development of a solid, economically stable and patriotic business class, which is committed to fighting absolute poverty".

He called for a redoubled battle against crime and corruption. "To fight crime without respite is also to strengthen the stability which is essential for our daily life and for the rapid socio-economic development of our country", President Chissano declared. "Let us close ranks as citizens and as public or private institutions so that crime may be firmly combated in our society".

President sends condolences to Bush

President Joaquim Chissano has written to his US counterpart, George Bush, extending "heartfelt condolences" to the American people, and to the families of the victims of the terrorist outrages in New York and Washington.

In his message, written in English, President Chissano said he had learnt of the attacks "with great distress and shock...This horrible act of unprecedented proportions has deeply disturbed the conscience of all mankind".

He continued that "Nothing can justify the resort to acts of terrorism for whatever reasons or motivations".

The attacks, in which hijackers seized control of commercial airliners and turned them into bombs, flying them into the World Trade Centre in New York and the Pentagon in Washington, was an assault "against the basic norms of behaviour and of international law", added the President. "I would like to express in the strongest terms my condemnation of such inhuman acts".

President Chissano concluded his message with the hope that "the ongoing efforts to identify and bring to justice those responsible for these acts will be successful".

Mozambique to cut malaria mortality rate

The Health Ministry is working out ways to implement African strategies to combat malaria, and particularly to minimise the mortality rate from this disease.

The Health Ministry's director for the national malaria programme, Samuel Mabunda, said that the African strategy, adopted in 1997, aims to reduce by 50 per cent the death rate from malaria by the year 2010.

Speaking to AIM, Mabunda explained that there are two components to the strategy, namely the control of the mosquitos that spread the disease, and health education. "We hope to attain, by 2010, a 45 to 50 per cent reduction in the effects of malaria in the country", said Mabunda, adding that this measure is a major challenge for his ministry in the coming decade.

As a means to fight against mosquitos, Mabunda called for the spraying of homes and of the areas where mosquitos breed. "For the current year, spraying of homes with insecticide will start in October", he said. Mabunda said the necessary funds are now available, but he did not specify the amounts.

As for strains of malaria that are resistant to the standard drugs, Mabunda said this "will call for a change of behaviour on the part of people, and preventive education". He explained that most cases of resistance are caused by not following strictly the medical prescriptions, saying that some patients interrupt their treatment when they feel better.

Currently, malaria infection rates in Mozambique are estimated at 4.5 per cent in the cities, and 7.4 per cent in the rural areas.

Renamo postpones congress

Mozambique's main opposition party, Renamo, has postponed its congress, the first to be held since the end of the war of destabilisation almost nine years ago.

Initially, the congress was to have been held on 24 September in Nampula. But on 12 September a member of the Renamo Political Committee, Vicente Ululu, told a press conference that the event has been postponed until late October.

The reason Ululu gave for the postponement was that so far Renamo has only been able to hold conferences to elect congress delegates in two of Mozambique's 11 provinces (Maputo and Gaza).

Renamo says that the forthcoming congress will be its fourth, and that the other three were held during the war.

Tea company requests 1,000 hectares

The Zimbabwean tea company, Tanganda Tea, has requested some 1,000 hectares of land in the district of Mossurize, in the central Mozambican province of Manica, intended for the planting of tea, according to Agriculture Minister, Helder Muteia.

Muteia told AIM that an area close to Espungabera, the Mossurize district capital, near the frontier with Zimbabwe, has already been identified.

"The Zimbabwean company requested a 1,000-hectare area for the production of tea, but apart from this, we'll probably have another 1,000 hectares for peasant farmers who will benefit from extension services provided by the Zimbabweans", he said.

The measure is aimed at promoting development not only through the creation of jobs but also through giving the peasant farmers a capacity to produce tea.

A representative of the company met recently with Muteia to discuss the details of the project. Muteia said Tanganda wanted to be informed on the fiscal incentives and facilities that the Mozambican government offers for companies that wish to carry out such projects, aspects which "are envisaged in the investment law".

There are about 331 peasant farmers in Mossurize who are already involved in growing tea. Muteia said the farmers started clandestinely in 1995 since they mistakenly thought they were planting a forbidden crop.

Data from the Agriculture Ministry forecast a 35 per cent growth in tea production throughout Mozambique this year, in comparison with 2000. This is mainly thanks to a programme to relaunch the crop in Gurue district, in Zambezia province. Some 5,932 hectares of tea are currently being cultivated in Gurue.

Food security mission reports back

The food security evaluation mission that worked throughout August in six central and southern provinces has recommended the urgent drafting of an integrated plan of action to mitigate the effects of food shortages in parts of the country.

The mission discovered that there are places likely to suffer hunger due to insufficient rainfall, destruction of crops by pests, poor soils, and the fact that many families resettled after flooding in central Mozambique have not yet fully resumed their agricultural activities.

"Although we supplied seeds and tools to relaunch farming activity after the floods, the harvests from the second planting season were poor due to the above factors", said Joao Zamissa, spokesperson of the country's relief agency, the National Disaster Management Institute (INGC).

Zamissa told AIM on 13 September that the Plan of Action should be the short term measure to be taken. Owing to its urgent nature, the Plan of Action has to be presented during the next inter-ministerial meeting, scheduled for 26 September, when the forecasts for the next rainy season will be disclosed.

He said that the plan will be drafted through the coordination of the Agriculture Ministry, the Ministry of Industry and Trade, the INGC, and the United Nations World Food Programme (WFP).

Preliminary data indicate that about 370,000 people are likely to be affected by food shortages in the coming months, mostly in the south and centre of the country.

During the visits the mission did not come upon any famine-related deaths. However, it found that there are "famine warning spots" in some areas, mainly in those hit by the floods and those considered vulnerable to drought.

Approval of PAPRA may come in September

The boards of the World Bank and the IMF may approve later this month the Mozambican government's "Action Plan for the Reduction of Absolute Poverty" (PARPA). This is a crucial step towards further debt relief for Mozambique under phase two of the HIPC (Heavily Indebted Poor Countries) initiative, or "Enhanced HIPC".

Since their sudden discovery of poverty a couple of years ago, the Bretton Woods institution have demanded that effective programmes to deal with poverty must be in place before any country qualifies for debt relief. When this was announced, the Mozambican government already had a poverty reduction programme, which it was forced to rewrite.

A provisional version of PARPA was drawn up in 2000, and this was enough for Mozambique to become eligible for enhanced HIPC. The definitive PARPA is now available, and has been submitted to the World Bank. The final document was supposed to be drawn up in consultation with civil society, but some Mozambican NGOs claim they did not participate fully in this process. However, the NGOs, who work under the umbrella of the Mozambique Debt Group, are most unlikely to do anything that will hinder further debt relief.

Originally it was hoped that the "conclusion point" for enhanced HIPC - the moment at which the debt relief actually takes effect - would be in March. But the crisis rocking the Mozambican financial sector, caused by the enormous losses run up by the two privatised commercial banks, the BCM and Austral, led to delays.

The latest World Bank figures, quoted by the newspaper "Metical", indicate that with HIPC-2 Mozambique's debt service ratio (debt payments as a percentage of exports of goods and services) will fall to five per cent in 2002. Without HIPC the figure would have been 20 per cent.

In December 1998, Mozambique's total debt stock stood at $2.73 billion - $1.97 billion of this is to be wiped out under the two stages of HIPC, leaving a total debt stock of about $760 million.

The World Bank predicts that Mozambique's debt-stock-to exports ratio will fall to 99 per cent in 2003, 75 per cent in 2010, and 55 per cent in 2017. But these predictions depend on a steady growth in export revenue, and with the volatility of prices for primary products, this is far from guaranteed.

Latest AIDS statistics

The Health Ministry now estimates that 12.2 per cent of the population aged between 15 and 49 are infected with HIV, the virus that causes the lethal disease AIDS.

Although this looks rather better than the earlier estimate of a 16 per cent infection rate, the difference is entirely due to improved statistics, and does not mean that the epidemic is coming under control.

Indeed, in cities where the statistical series goes back several years (Maputo, Beira, Chimoio and Tete) the trend remains remorselessly upwards. The latest figures indicate a worsening of the epidemic, with health centres in Beira and Chimoio now reporting an HIV prevalence rate of around 25 per cent.

The problem with earlier estimates of the national HIV/AIDS situation was the small sample on which they were based. Maputo was used to estimate HIV prevalence in the south of the country, and Beira, Chimoio and Tete for the centre.

Up until 2000 health centres in these cities were the only sentinel sites in operation, testing pregnant women for HIV (there is a mathematical model, widely used internationally, which can estimate prevalence rates throughout the adult population from the figures for pregnant women).

But there were no sentinel sites anywhere north of the Zambezi, and none in any rural areas. In its earlier estimates, the Health Ministry assumed that the epidemic in northern Mozambican was 25 per cent worse than in the south.

The only statistics that existed, from a rapid assessment survey in Nampula province, were discarded. These showed a prevalence rate of five per cent in Nampula city, and 6.1 per cent in Monapo district: health officials thought these figures were far too low, and should not be taken seriously because of the small sample.

But now that there are 20 sentinel sites operating, 11 urban and nine rural, and covering every province, their results indicate that the Nampula rapid assessment was quite accurate.

Far from being worse than the south, the HIV prevalence in the northern three provinces is less than half the infection rate in the south. It is the northern provinces of Nampula, Niassa and Cabo Delgado that have pushed the national HIV prevalence rate down to 12.2 per cent.

The latest figures, unveiled by the Health Ministry show a 5.7 per cent prevalence rate in the north, 13.2 per cent in the south (Maputo city, Maputo province, Gaza and Inhambane), and 16.5 per cent in the centre (Sofala, Manica, Tete and Zambezia).

Arranging the 11 provinces from south to north, the prevalence rates, estimated on the data from the 20 sentinel sites, are as follows:

Maputo City - 13 per cent
Maputo Province - 14.3 per cent
Gaza - 16 per cent
Inhambane - 9.6 per cent
Sofala - 18.7 per cent
Manica - 21.1 per cent
Tete - 19.8 per cent
Zambezia - 12.7 per cent
Nampula - 5.2 per cent
Niassa - 6.8 per cent
Cabo Delgado - 6.4 per cent

Deputy National Health Director Avertino Barreto argued that population movements are the main explanatory factor for the differential spread of HIV in the country. Thus the central provinces are affected both by the massive return of refugees from neighbouring countries at the end of the war of destabilisation, and by two crucial transport corridors - the road and rail route from Zimbabwe to Beira, and the Zimbabwe- Malawi road which runs through the middle of Tete.

In contrast, the northern three provinces are those with fewest returning refugees, and no major international road transport route runs through them. The main corridor, from the port of Nacala to Malawi, is exclusively a rail corridor. Thus the north does not see the heavy traffic in trucks, and the accompanying phenomena of roadside bars and prostitution, that characterise the Beira and Tete corridors.

The main population movement in the south is migrant labour. The province that makes the largest contribution to the export of labour to the South African gold mines is Gaza, and health officials are sure this is closely linked to the high HIV prevalence in Gaza.

The ministry hopes to refine the statistics still further by providing sentinel site facilities in a further 14 health centres spread throughout the country in the coming few months.

Land occupation in Matola

A group of allegedly disabled former soldiers have invaded and occupied another stretch of land in the municipality of Matola, about 15 kilometres from Maputo. This is the fourth time that former soldiers have illegally seized land in Matola, doubtless encouraged by the failure of the authorities to take firm measures against the earlier occupations.

The latest occupation is on land belonging to the Maputo General Union of Agricultural and Livestock Cooperatives (UGC) in the Matola neighbourhood of Mussumbuluko.

On 10 September the UGC told AIM that the former soldiers had grabbed the land last week, and were demarcating it into individual plots.

The disabled soldiers justify their lawlessness with a claim that the Matola municipal council once promised to provide them with plots of land on which to build their houses.

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