Mozambique News Agency

No.295, 17th March 2005



Change is "complex and difficult" warns Guebuza

President Armando Guebuza said on 9 March that it is complex and difficult to make changes in governance, because there will always be resistance from those who benefited from the status quo, and support from those who believe they will benefit from change.

President Guebuza, who was speaking in the southern city of Matola at the start of a training seminar for members of his new government, warned against "opportunists and those who foment intrigue" who might try to make use of changes to take revenge on anyone held responsible for what may have happened to them in the past.

The seminar follows a five day meeting of the Central Committee of the ruling Frelimo Party, which ended on 7 March, and approved the five year programme of President Guebuza's government, aimed at putting into practice the promises made by Frelimo during last year's election campaign.

President Guebuza strongly defended the practice of "criticism and self-criticism". In Frelimo, he said, far from dividing the membership, this practice promoted the cohesion of the party, and strengthened the determination of each militant.

Changes undertaken by Frelimo, he added, are successful because those who carry them out know the party's history and its ideals and, above all, are inspired by the aspirations of the Mozambican people.

President Guebuza recalled that, between 1997 and 2003, the number of Mozambicans living in absolute poverty fell from almost 70 per cent of the population to about 54 per cent. While this was encouraging, absolute poverty remained the major challenge facing the government. "We in Frelimo want more, our people want more, and Mozambique can give more", said President Guebuza. "From the people we have obtained a clear and unequivocal mandate to continue to make changes in the country, and to continue fighting against poverty".

"For us, the battle cry is the fight against poverty, and that is the call that some people need, to climb out of the lethargy into which they have fallen and to join us", he stressed.

"When we say ''no to the spirit of apathy and drift, no to red tape, no to crime, no to corruption'', what we are saying is ''yes to creativity, and to a greater love for the people''", the President declared. It was also "yes to governmental efficiency and effectiveness, yes to tranquillity among citizens, yes to the credibility of our institutions".

President Guebuza warned that those who expect a revolution or drastic reforms that result in a different Frelimo might end up frustrated. "Let us change Frelimo, so that it measures up to itself", he said. "Let us change the country so that it measures up to our ideals, measures up to what our people long for".

Guebuza elected President of Frelimo

The Central Committee of Mozambique's ruling Frelimo Party on 7 March elected Armando Guebuza to the post of President of the Party. In the secret ballot vote, 156 of the 161 Central Committee members present voted for Guebuza, while five showed their opposition by casting blank ballots.

The post of President of Frelimo fell vacant because of the resignation of Joaquim Chissano on 4 March. Chissano made it clear that he was standing down in favour of Guebuza, who was elected President of Mozambique in December's general elections. Thus Frelimo maintains its tradition, established at independence in 1975, that the posts of President of the Republic and president of the party should be held by the same person.

President Guebuza's previous party post was that of general secretary. Since the Central Committee did not elect a new general secretary, technically Guebuza now concentrates both top party jobs, president and general secretary, in his hands.

The Central Committee also elected Prime Minister Luisa Diogo to the 15-member Political Commission, effectively the party's executive. She fills the vacancy left by the death of Rafael Maguni in February 2004. Diogo was elected with 152 votes in favour, while nine members of the Central Committee cast blank ballots.

The vacancy left on the Frelimo disciplinary body, the Verification Commission, by the appointment of Teodato Hunguana to the Constitutional Council, the body that validates election results, was filled by former deputy agriculture minister Joao Carrilho, who was elected with 155 votes in favour, five blank ballots and one spoilt ballot.

The Central Committee also decided to propose to the next Party Congress that Chissano be appointed Honorary President of Frelimo. This is a post envisaged in the Frelimo statutes, but which has never been filled.

Frelimo is due to hold its next congress in 2007, but it could well be brought forward a year.

Government determined to speed things up

Mozambique's new government, emerging from the December general elections, is determined not only to continue the programmes inherited from its predecessor, but to speed things up, declared Prime Minister Luisa Diogo on 15 March.

Giving her first press conference since the new government took office in February, Diogo said it has concluding drafting its five year programme, and sent it for approval to the country's parliament, the Assembly of the Republic. Only after the Assembly approves, or alters the programme, will the government's plan and budget for 2005 be finalised.

Diogo described the five year programme as honouring the promises made by the ruling Frelimo Party in its election campaign. "Our central objective remains the same", she said. "It is the combat against absolute poverty". That combat would be waged both in the countryside and in the cities - Diogo thought that a problem with the anti-poverty approach so far was "certain aspects of urban poverty were not given due importance".

The Prime Minister said the five year programme lays a new stress on technical and professional education "so as to make people more employable, and also provide them with skills for self-employment". Diogo said that where programmes had guaranteed funding - such as the projected new bridge over the Zambezi at Caia, as well as the bridge over the Limpopo at Guija, and the reconstruction of the bridge over the Lugela river in Zambezia province - the government would push them ahead as speedily as possible.

"The point is to start rapidly", she stressed. "The money is there, the contracts have been signed. So when will the contractors start their work?" Where no funding had yet been obtained, the government would approach its partners on the basis of the five year programme.

One such unfunded project was for a new power line southwards from the Cahora Bassa dam in Tete province. Currently southern Mozambique receives Cahora Bassa power, but via South Africa, which involves paying a rental to the South African power utility Eskom for the use of its lines. "We want a transmission line to the south that doesn't go through neighbouring countries", said Diogo. "We want power that is produced and distributed within the country, and we will make every effort to finance this".

As for Mozambique's protracted efforts to secure control over Cahora Bassa, Diogo expected negotiations with Portugal to resume in the near future. The dam operating company, Hidroelectrica de Cahora Bassa (HCB), is still 82 per cent owned by the Portuguese state, with just 18 per cent in Mozambican hands. Mozambique wants a controlling stake in the dam (as was envisaged under the initial agreements with Portugal in 1975), but the obstacle always invoked by successive Portuguese governments is HCB's huge debt to the Portuguese treasury (which Lisbon puts at some $2 billion).

Negotiations were interrupted in late 2004, when the right-wing Portuguese government of Pedro Santana Lopes fell, and early general elections were called. This resulted in a huge victory for the Portuguese Socialist Party, led by Jose Socrates, which for the first time ever enjoys an absolute majority in the Lisbon parliament. "As soon as the new government took office in Lisbon, we thought conditions were ready to resume negotiations", said Diogo.

A new negotiating team has been formed, headed by Energy Minister Salvador Namburete. Diogo said Namburete has been working with Finance Minister Manuel Chang (who headed the negotiating team of the previous government, when he was a deputy minister), to make a fresh proposal to Portugal.

Diogo pointed out that other major projects in the Zambezi valley, notably the construction of another dam at Mepanda Ncua, some 70 kilometres downstream from Cahora Bassa, were in limbo, awaiting a decision on the future of Cahora Bassa, which was "the anchor" for the development of the entire region.

Public sector wage ceiling

Prime Minister Diogo told the press conference that the desirable ceiling for public sector wages should be not more than 7.5 per cent of Gross Domestic Product (GDP),.

She was answering a question from AIM on the impact of IMF attempts to hold back the government wages bill. Would the IMF ceilings not make it impossible to recruit the education and health staff needed to meet the objective of eradicating absolute poverty and achieving the Millennium Development Goals?

"We have to decide how much goes on wages, how much goes on investment, how much goes on infrastructure", said the Prime Minister. "Looking at it in macro-economic terms, the government's wage bill should not come to more than 7.5 per cent of GDP. The government shares this position with the Bretton Woods Institutions". Expanding the wages bill thus depended on continued growth in Mozambican GDP.

Diogo insisted that the government is committed to recruiting more staff for the public sector - not just to replace those who retire or, increasingly, those who fall victim to AIDS, but to undertake a real expansion of the education and health services, and the police force. The current targets, she said, were an annual recruitment of 6,000 new teachers, 8,000 literacy workers, and 1,900 health workers.

Zacarias demands high quality roads

Minister of Public Works, Felicio Zacarias, on 16 March warned that he expects the rehabilitation of the stretch of the country's main north-south highway, running from Namacurra to the Ligonha river, in the central province of Zambezia, to be undertaken to a high standard.

He was speaking at the ceremony where contracts were signed for the work with the Portuguese company Tamega, and the Italian concern, CMC di Ravenna. This stretch of the road is 375 kilometres long, and the contracts are valued at 78.8 million euros (about $105 million).

Zacarias had some harsh words to say about bungled road construction in the past. He told the two companies that Mozambique has made large investments in roads - but these have not always produced the results expected, because of shoddy work be contractors.

"I call on Tamega and CMC di Ravenna to do your work with high quality", he said. "And I call on the supervisors to follow the work properly".

And nobody should try to pull the wool over his eyes. "The fact that I'm an agricultural engineer won't stop me from examining the work on the ground to see whether the materials used are appropriate or not", Zacarias said. This is precisely what Zacarias did in his previous job as governor of Sofala province - personally inspecting building work, and denouncing contractors who tried to cut corners.

The European Union is providing the greater part of the funding for this rehabilitation (60.5 million euros), with the rest coming from the Mozambican state budget. Work should begin next month and take two years, ending in April 2007.

Supervision of the work is in the hands of the German engineering company Gauff and the Mozambican National Roads Directorate (ANE).

OXFAM warning on EU sugar reform

The British based charity Oxfam intends to impress upon European leaders that changes made to the European Union's sugar regime could have dramatic consequences - for good or for bad - on poverty in Mozambique and other third world sugar producers.

The honorary president of Oxfam International, the former Irish President Mary Robinson, told a Maputo press conference on 5 March that the current proposals of the European Commission, involving a very sharp cut in the guaranteed price offered to sugar producers, are "not helpful for the next few years of the developing and processing of sugar in Mozambique".

Robinson was on a three day visit to Mozambique, during which she toured the sugar plantation and mill at Xinavane in Maputo province, and spoke to leaders of the peasant association who sell their cane to the factory.

"I saw how positive sugar production is for communities", Robinson said. "The peasant farmers explained to us how important sugar is to them as a cash crop. I was struck by how hard they work, and how worried they are about the price".

She pledged that Oxfam would impress upon European parliamentarians and governments that reform of the EU sugar regime "should address the needs of Mozambique and other developing countries".

EU policy makers, she added, should understand "the link between what they do on trade, and development in Mozambique. In the EU there is a tendency to separate trade and development issues. But it's perfectly clear from our visit that the trade decisions taken will impact either very positively or very negatively on development, and on poverty".

The director of Mozambique's National Sugar Institute, Arnaldo Ribeiro, told the reporters that the domestic market cannot absorb all of Mozambique's sugar production. The domestic market consumes about 150,000 tonnes of sugar a year, but in 2004 the four functioning sugar companies produced 210,000 tonnes.

The best prices available currently are those paid by the EU, but Mozambique's quota for the EU, Ribeiro said, is only 7- 8,000 tonnes a year. Much of the remaining Mozambican sugar has to be sold on the world market, where the enormous distortions caused by agricultural subsidies means that sugar prices "are often lower than the costs of production, even for the most efficient producers".

Mozambique also accesses the EU market through the "Everything But Arms" (EBA) initiative, and Ribeiro said that, under EBA, "we were told that by 2009 we would have unrestricted access to the European sugar market, but we assumed that would be at the current price level".

The benefit of access would be cancelled out by sharp price reductions. The proposal now under discussion is for a 20 per cent cut in the EU guaranteed price this year, and a 33 per cent cut in two years. "This would have a devastating effect", warned Ribeiro.

The Mozambican sugar companies currently employ about 26,000 people - which means that around 100,000 Mozambican citizens are directly dependent on the sugar industry. But employment could be expanded in the companies now operating, and the two that are still paralysed (at Luabo and Buzi in the centre of the country) could be revived, creating another 20,000 jobs - but only if there was a guaranteed market for the extra sugar produced.

Ribeiro said that Buzi and Luabo have already been privatised - but the new owners will not rehabilitate them and produce sugar without a guarantee that they can sell it at a reasonable price.

Mozambique and other Least Developed Countries "are trying to influence the European Commission and European public opinion so that the reforms do not take on this drastic form", said Ribeiro. "We want a reform that is pro-development".

He was convinced that Mozambique could be among the ten most competitive sugar producers in the world, selling sugar at $220 a tonne FOB - but that required improvements in Mozambican ports and in the road and rail infrastructure. "We need time to do this", said Ribeiro. "We want the EU to give us at least another eight years".

Jan Nico Scholten, the chairman of AWEPA (Association of European Parliamentarians for Africa), who was accompanying Robinson, warned that the EU sugar policy "risks increasing poverty". "We shall mobilise our network of parliamentarians, in the national parliaments and in the European parliament, to campaign for a better sugar policy", he pledged.

Cotton prices fall

Cotton producers are faced with a collapse in the world market price for cotton - bad news indeed for both the Mozambican peasant farmers who grow the cotton, and for the concessionary companies that provide the farmers with inputs and buy their crop.

According to the latest figures from the Mozambican government's Cotton Institute (IAM), the price of first grade cotton fibre has fallen from a high point of 76 US cents per pound last year, to just 51 cents a pound now (a decline of almost 33 per cent).

The fall in prices is a particularly severe blow because cotton production has been on the increase in Mozambique. Indeed, according to the IAM, the 2004 cotton harvest exceeded all expectations. The amount harvested was 93,205 tonnes, as against 54,114 tonnes in 2003 - a rise of 72 per cent. But most of this cotton is still in Mozambique. Around 18,800 tonnes have been exported, which brought in earnings of around $21,000.

This year cotton producers are likely to see their earnings fall sharply. In 2004, the companies paid 5,000 meticais per kilo for first grade cotton and 3,500 meticais a kilo for the second grade variety (at current exchange rates there are about 19,000 meticais to the US dollar).

The fall in the world market price, and the appreciation of the metical against the dollar over the last few months put pressure on the companies to reduce the price they pay to the producers. The world cotton market is distorted by the massive subsidies that some governments, notably that of the United States, offer to their cotton farmers.

Government sells shares in Austral Bank

The Mozambican state came closer to a complete withdrawal from commercial banking when, on 4 March, the government signed the deeds handing over its remaining shares in the Austral Bank to the bank's workforce.

Austral was once known as the People's Development Bank (BPD), and was state-owned. Under pressure from the World Bank and the IMF, privatisation was hastily arranged in 1997, without looking too closely at the credentials of the new owners.

A Mozambican-Malaysian consortium took over 60 per cent of the bank, leaving the state with 40 per cent. The new owners then proceeded to rename the bank and to ruin it. By early 2001, Austral was collapsing under a mountain of bad loans. The private shareholders pulled out and the government had to set about rescuing the bank.

In December 2001, a second privatisation took place, with the South African group ABSA buying 80 per cent of the shares in Austral. Now the government has sold its remaining 20 per cent to the newly established company "Uniao, Sociedade e Participacoes SARL", which represents the Austral workers.

The deeds were signed by the chairman of Uniao, Teodoro Wate, and by the chairman of the board of the government's Institute for the Management of State Holdings (IGEPE), Daniel Tembe. The workers now own 630,000 shares in the bank, each with a face value of 100,000 meticais (about $5).

According to Wate, Uniao will operate on a business basis, and will count on administrative support from ABSA.

The state continues to hold shares in about 250 companies, some of which it is now selling off.

Preferential trade agreement with Zimbabwe

A preferential trade agreement has been implemented between Mozambique and Zimbabwe, under which tariff and non-tariff barriers are eliminated on a wide range of goods from both countries.

The agreement excludes a variety of sensitive goods: sugar, beer, soft drinks, tobacco products, motor vehicles and firearms, ammunition and explosives.

From Mozambique's viewpoint the most important product excluded is sugar. The Mozambican sugar industry enjoys protection in the domestic market, with a surtax levied on all legal imports of sugar. Mozambican sugar companies in the past have complained bitterly at the unfair competition posed by sugar smuggled in from neighbouring countries, particularly Zimbabwe.

Goods covered by this agreement must enter or leave Mozambique at the four main border posts - Machipanda and Espungabera in Manica province, Chicualacuala in Gaza, and Cuchamano in Tete.

Demining report for 2004 presented

Demining operations in Mozambique in 2004 cleared more than 12.1 million square metres of land mines, thus surpassing the target of clearing 10 million square metres a year.

According to the report on the Mine Action Programme for 2004, presented by the government's National Demining Institute on 11 March to the annual meeting with demining operators, during the year 18,539 mines and 2,712 items of unexploded ordnance were removed and destroyed. This compares with clearing an area of 7.1 million square metres in 2003. In that year, 10,613 mines and 13,599 items of unexploded ordnance were removed.

The report attributes the sharp increase in the number of mines removed in 2004 to operations by the British NGO, the Halo Trust, in the northern districts of Mueda and Nangade. These mines were planted by the Portuguese army in the 1960s and early 1970s.

Humanitarian demining organisations only cleared 5.29 million square metres, a 2.1 per cent decline on the 2003 figure.

The Mozambican armed forces (FADM) cleared a mere 14,031 square metres, a drastic fall of 98.2 per cent, when compared with the 795,419 square metres cleared by the army in 2003.

This was more than compensated for by the huge increase in commercial demining operations, which cleared 6.83 million square metres compared with only 858,000 in 2003. Much of the commercial operations consisted of demining along the main north-south highway between Maputo and Inhambane province.

Inhambane is believed to be the most heavily mined province in the county, and accounted for 5.28 million square metres of the area cleared in 2004. It was followed by Maputo and Zambezia provinces, with 3.58 million and 810,000 square metres cleared respectively.

Further investigation on the ground has led to a sharp reduction in the area thought to be affected by land mines. In 2003, 1,054 areas, covering a total of 527,846,784 square metres, were suspected of containing land mines. 583 villages were thought to be affected.

Land mine clearance, plus eliminating from the list areas found to contain no mines, led to a reduction of the suspect sites by the end of 2004 to 551, covering 246,187,303 square metres, and affecting 267 villages.

In 2004, the land mine programme was funded by 21 donors who disbursed a total of $14.5 million. The Mozambican government provided 178 billion meticais (about $9 million at current exchange rates) to fund the activities of the IND over the 2003-04 period.

Last year the IND recorded 13 land mine incidents in 2004, in which three people were killed and 27 injured.

Cornelder takes over management of Quelimane port

The publicly owned Mozambique ports and railway company (CFM) signed in Maputo on 14 March the contract that formalises the hand over of the management of the port of Quelimane, capital of Zambezia province, to the new company, Cornelder-Quelimane.

Cornelder-Quelimane, is owned jointly by CFM and Cornelder de Mozambique, the company which is already running the port of Beira. 70 per cent of Cornelder de Mocambique is owned by the Dutch company Cornelder.

Cornelder-Quelimane took over the management of the port under a lease that will run for the next 25 years. This management includes maintenance of the port's infrastructure and equipment, cargo handling, and rendering of services to all ships in all terminals.

According to CFM the money necessary for this undertaking, 23 million euros (about $30 million), was granted by the German government, through the German development bank, KFW.

The work in terms of infrastructure includes the rehabilitation of the office buildings and warehouses, of the mooring sites, of the power and water supply and sanitation systems, and the installing of new fire fighting equipment.

The signing ceremony was witnessed by CFM and Cornelder Mozambique managers, and by representatives of the German government.

New ocean terminal needed at Nacala

Mozambique needs to build a new ocean terminal for massive ships and for container traffic in the northern port of Nacala, which is one of best natural deep water ports on the east African coast, but is currently severely underused.

The director of the Northern Development Corridor, Fernando Couto, argues that a new terminal is urgently needed if Mozambique is to have any chance in the competition between the ports of Nacala, Dar-es-Salaam (in Tanzania) and Port Louis (in Mauritius).

Which of these ports should be the hub for ocean traffic in the east African area? "We cannot lose this struggle", said Couto. "Nacala should be the focal point, so that this new pole of development for the international shipping market is based there. It's imperative that Nacala wins this struggle for the regional market".

At the moment, Nacala port survives only on the export of agricultural surplus from northern Mozambique, and some cargo to and from neighbouring Malawi. However, there is considerable hope of a much more profitable and sustainable port in the near future. Couto believes that Nacala should be able to take advantage of the titanium mining due to start in the near future at Moma, also located on the northern coast. The mining of the Moma heavy sands will require thousands of tonnes of capital equipment, which will have to be landed at Nacala.

Couto believed that Nacala has a natural role to play in the exploitation of the mineral resources of south-eastern Africa. But it must reach the international standards required of a deep water port. If it achieves this, "it will have a fundamental role to play in shipping in the Indian Ocean".

A further desirable improvement would be to link the northern Mozambican rail system to Zambia. That requires the building of a relatively short stretch of line between Malawi and Zambia. This would make it possible for Nacala to attract Zambian traffic which currently uses other ports.

FUMO denies breaking with Renamo

The president of the Mozambique United Front (FUMO), Jose Samo Gudo, has denied that his party ever considered abandoning the Renamo-Electoral Union coalition, of which it has been part for the last six years, and through which it was represented in the 2000-2004 parliament.

Reacting to an article published by "Noticias" on 28 February, Samo Gudo denied that FUMO has decided to abandon the coalition. He insisted that FUMO was determined to remain faithful to the coalition's statutes.

Samo Gudo said that FUMO would hold a congress in July, but that he will not be standing for another term of office as party president. He has led FUMO for the last five years, and was its sole member of parliament.

Samo Gudo also denied that at any moment any member of FUMO had accused him of dragging the party into the coalition without their consent.

Despite Samo Gudo's denials, it is widely known that FUMO is split in two, with one faction supporting Samo Gudo, and the other led by lawyer Simeao Cuamba, and engineer Pedro Loforte, who claim that they have sacked Samo Gudo.

This latter faction is against FUMO's membership of the Renamo coalition.

This is a condensed version of the AIM daily news service - for details contact

Mozambique News Agency

c/o 114 Stanford Avenue Brighton BN1 6FE UK.

Tel: +44 (0) 7941 890630,

email: Mozambique News Agency

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