Mozambique News Agency

No.298, 10th May 2005


Thousands march on May Day

Many thousand of workers took part in the traditional May Day march through the streets of Maputo. The march took about two hours to pass the reviewing stand where President Armando Guebuza, Prime Minister Luisa Diogo, and other leading figures greeted them. .

This year the main slogan for the march was "Mozambican workers in the struggle against HIV/AIDS" - but marchers took the opportunity to raise many other issues on their banners, placards, songs and shouts.

Several groups of marchers came from factories that have closed, but which never formally declared bankruptcy. Workers are still on the payroll but have not been paid for months, or years. In this situation are the 140 workers of the Mozambican Steel Company (IMA), in Matola. "Five years without wages", read the banner of these workers, who demanded to know what future, if any, their factory has.

Workers from Loumar, a company that once produced orange squash, demanded that the state pay them sixteen months back wages. In the grim years of the 1980s, there were times when their orange squash was the only soft drink available in Maputo shops. Now it seems to have been driven out of the market by drinks from the Coca-Cola company.

Workers from Mozambican banks, who have frequently complained that foreign staff are paid much more than national staff, demanded "No to wage discrimination".

Civil servants demanded union recognition, while workers from one building company complained their bosses treated them with "racism, intimidation, dismissals and abuses".

But some of the marchers seemed content to advertise their employers, such as Omo detergent and Lux soap.

Also present in force ASSOTSI, an association of vendors from the informal sector. Their main demand was that the Maputo City Council "legalise the spaces we occupy".

The informal vendors sell their goods in sprawling markets on waste ground, known as "dumba-nengues", or simply on pavements and street corners. The Council wants them to move into the municipal markets, where thousands of stalls are vacant: the informal vendors don't move, presumably because in the official markets they would have to pay taxes.

Bringing up the rear were a couple of hundred people marching under the flag of a country that no longer exists, the German Democratic Republic (GDR). These were Mozambicans who had once been migrant workers in the GDR, and are known colloquially as "majermanes".

They claim that the government still owes them vast sums of money supposedly sent from Germany to Mozambique in the 1980s. Both the government and the German embassy have demolished these claims point by point, yet they are still demanding "Pay what you owe us".

President urges workers to fight corruption

Speaking to thousands of workers attending a May Day rally in Maputo, President Guebuza called on workers to join with the government in fighting against "the obstacles that hinder development". The President named these obstacles as "red tape, the spirit of apathy and drift, corruption and crime".

Criticising the lethargy and excessive bureaucracy in the state administration, President Guebuza declared "Civil servants should understand that their productivity should be measured by the quantity and quality of the documents, and the support they provide to citizens in filling out paperwork".

He denounced those officials who frustrated citizens applying for various permits by telling them repeatedly "come back tomorrow" - when what they really meant was that they had lost the documents.

But workers were also guilty of apathetic behaviour when "they fail to denounce any sabotage or illegalities committed in their institution". So were officials who were "indifferent to indiscipline, carelessness and negligence, and to the undue use of resources, equipment and raw materials by their subordinates".

Those who damaged the state by just letting things drift along included officials who, instead of ensuring that infrastructures are regularly maintained, "prefer to rehabilitate them, which is much more costly and damaging to the institution and to the public treasury".

President Guebuza described corruption as "a worm that gnaws at the credibility of institutions". Corrupt officials, he said, "create mechanisms and circuits that are unpredictable, and install an environment where the processing of documents and the exercise of citizens' rights is conditional on illicit payments".

The corrupt, he added, "are linked to a network, sometimes criminal in nature, which, in both the private and public sector, is maintained and lubricated with the sweat and sacrifice of our people".

President Guebuza warned that "our combat against corruption is not like a wind against which you can protect yourself by lying flat, and then get up again after it has passed. We want the corrupt to be flattened for ever, we want them on the defensive, weakened and always fearful of our action, which will be tough and implacable".

President Guebuza called for a united front in the struggle against poverty, that would bring together workers, peasants, the self- employed, intellectuals, the political class "and all segments of our society, galvanised by the desire to see Mozambique free of poverty".

The government five year programme approved by the Assembly of the Republic in April, based on the programme put before the electorate last year by the ruling Frelimo Party, "requires the participation of all of us, giving the best of ourselves, if it is to be successful", declared the President.

Economic and social plan presented to Parliament

Prime Minister Luisa Diogo on 9 May presented the Assembly of the Republic with the government's Economic and Social Plan for 2005, which envisages a growth rate for the year of between seven and eight percent. The plan, and the accompanying state budget, are being debated five months late. In principle, the Assembly should vote on the annual plan and budget in December of the previous year: but the Assembly did not meet in December 2004, because of the general elections held that month.

The government is aiming at much the same growth rate as in 2004, when GDP grew by 7.2 percent.

The sector with the largest growth rate is mineral resources. This grew (in volume) by 215.7 percent in 2004, due to the coming on stream of the natural gas treatment plant at Temane in Inhambane province, and the gas pipeline to South Africa. Further increases in gas production account for this year's planned increase of 41.6 percent in mineral resources.

The government envisages a 14.8 percent rise in production in the electricity and water sector. This will be due to the normal operation of the Cahora Bassa dam on the Zambezi, which was operating well below capacity throughout 2004.

Key to overall growth will be the agriculture sector. No serious climatic disturbances have occurred during this agricultural season. Thus, although parts of the country have suffered from inadequate rainfall, the government is expecting a 7.2 percent growth rate in agriculture. Prime Minister Diogo said this would result largely from expanding the area under cultivation.

Increases are expected in the harvests of all main food crops - 5.9 percent in maize, seven percent in rice, 5.2 percent in cassava, 7.7 percent in beans. As for export crops, sugar cane production is expected to rise by 21.9 percent, while the cashew nut harvest is projected to rise by 62.8 percent. Tobacco, which the government hopes to process in Mozambique in the near future, rather than in Malawi, is expected to grow by 22.9 percent. Production of some export crops, however, is stagnant. The government expects no growth in cotton, citrus or copra.

After a decline of 3.8 percent in 2004, fisheries production is expected to rise by 7.7 percent this year. this is largely due to a substantial increase in inland fish farming, notably of prawns. This year, for the first time, the country intends to export live fish-farmed prawns.

Manufacturing industry grew by 9.8 percent in 2004 - but that was mostly due to a 33.8 percent increase in aluminium production - 2004 was the first full year in which phase two of the MOZAL aluminium smelter on the outskirts of Maputo was producing at full capacity.

This year, the manufacturing growth rate will be more modest: the target is 3.2 percent, which will rely heavily on food processing (4.4 percent), drinks and tobacco (4.6 percent), and textiles and clothing (12 percent). The latter is particularly dependent on factories producing for the American market under the duty-free arrangements of AGOA (African Growth and Opportunity Act).

In education, the government intends to continue the high growth rates in the number of children attending school. This year there will be seven percent more schools than in 2004, and 18 percent more pupils in general education.

Most of the growth is in primary education. The number of schools in first level primary education (grades one to five) is projected to rise from 8,373, catering for 3.07 million pupils, to 8,761, with 3.62 million.

In second level primary education (grades six and seven), the number of schools should rise from 1,116 to 1,352, and pupil numbers from 409,279 to 512,272.

The number tail off in secondary education. In 2004, there were only 140 secondary schools teaching grades eight to ten, and they had 168,798 pupils. The numbers should rise this year to 153 schools with 187,066 pupils.

As for pre-university schools (grades 11 and 12), there were 30 of these in 2004, catering for just 21,350 pupils. This year there should be 35 such schools with 23,140 pupils.

In adult education, the government's target is for 810,000 adults to attend literacy programmes, an increase of 50.7% on the 2004 figure.

The plan announces a target for inflation this year of between seven and eight percent, which compares with 9.3 percent in 2004.

As for the balance of trade, this is set to worsen. Exports are expected to grow by five percent, reaching $1.53 billion. But imports, the government estimates, will rise by 23 percent, to $2.16 billion. The deficit on the balance of trade thus more than doubles, from $302 million in 2004 to an estimated $629 million this year. The balance of services is also deteriorating - the deficit rises from $280 million in 2004 to a projected $486 million this year.

State budget presented

Finance Minister Manuel Chang on 9 May presented the Assembly of the Republic with the state budget for 2005,in which 55 percent of expenditure will be met by the government's own revenue, and the remaining 45 percent must come from foreign aid.

Mozambican tax and other revenue for the year is projected at 22,226 billion meticais (just over a billion US dollars at current exchange rates). This is a very substantial increase on the revenue of 16,562 billion meticais collected in 2004 - but it comes nowhere near reaching projected public expenditure of 41,605 billion meticais.

That deficit, to be covered by grants and loans, will be a feature of Mozambican budgets for the foreseeable future. Projections show the gap narrowing - the government forecasts revenue of over 25,700 billion meticais in 2006 and 29,000 million in 2007. But over this entire three year period, foreign aid will continue to run at over 20,000 billion meticais a year.

The recurrent budget is 22,604 billion meticais, of which slightly less than half (11,044 billion) is spent on "staff costs" - essentially wages of state employees.

The other main items of expenditure are goods and services (23.5 percent of the recurrent budget), current transfers, of which the main component is pensions (17.7 percent), and servicing the foreign and domestic debt (5.7 percent).

The capital budget, mostly funded by foreign loans and grants, amounts to slightly more than 19,000 billion meticais.

The recurrent and the capital budgets, minus debt servicing, amount to 40,322 billion meticais. Of this figure, Chang said, two thirds will be spent on the areas that are priorities for the government's poverty reduction strategy, known as PARPA (Action Plan for the Reduction of Absolute Poverty).

18.6 percent of the budget is earmarked for education, 12.4 percent for health, 18.7 percent for infrastructure (mostly roads), 4.2 percent for agriculture and rural development, 5.1 percent for security and public order (essentially the police force), and 2.4 percent for the judicial system. These are all regarded as among the PARPA "priority areas".

Defence, which once took the lion's share of the budget, during the war of destabilisation, is down to under five percent.

According to Chang, this budget allows the state to recruit 9,795 people this year. 5,443 of these are teachers, 1,767 are health workers, 1,000 will work in "security and public order" (mostly as policemen), and 507 will be in the judicial sector.

Just six public companies are subsidised by the state budget. The largest of these subsidies, 101 billion meticais, goes to Radio Mozambique. Mozambique Television (TVM) receives 74 billion meticais, and the Maputo bus company, TPM, receives 32 billion. Smaller sums go to the Beira bus company (TPB), Hidraulica de Chokwe (which runs the irrigation system in the Limpopo Valley), and the coal company Carbomoc, which is likely to be wound up this year.

In addition to the recurrent and capital budgets, there is a third item, state financial operations, amounting to 5,178 billion meticais. This consists largely of state participation in companies, and loans to companies (from foreign aid) in which the state treasury is the guarantor. The main beneficiaries of such loans are the electricity and telecommunications companies, EDM and TDM.

Chang said the government was committed to raising more funds domestically in order to lessen dependence on foreign aid. Increasing state revenue depended on both economic growth, and on improving the efficiency of tax collection.

He pledged to expand the tax base, which will involve bringing the informal sector of the economy increasingly within the tax net, and to crack down on fraud and tax evasion.

Japan promises to double aid

Japan intends to double its development aid to Mozambique, and indeed to the African continent as a whole. This promise was repeated in Maputo on 5 May by Keishiro Fukushima, Secretary for Parliamentary Affairs in the Japanese Foreign Ministry, speaking to reporters shortly after he had been received by Prime Minister Luisa Diogo.

Fukushima said the two had discussed matters seeking to further strengthen cooperation between Mozambique and Japan in various areas. They also discussed how to create the appropriate environment for Japanese businesses to invest in Mozambique.

Japanese aid to Mozambique has so far gone mainly into education, infrastructures, fisheries, energy and mineral resources.

Italian aid for Zambezi bridge

The Italian government is granting 20 million Euros (about $26 million) to support the building of a new bridge over the Zambezi river, that will form a key link in Mozambique's main north-south highway. The Italian ambassador to Mozambique, Guido Larcher, made this announcement in the central city of Beira, shortly after his arrival for a working visit.

He said that this is his government's response to the Mozambican call for support in this undertaking, which has a total budget of about $80 million.

Mozambican Public Works Minister Felicio Zacarias said that an international tender is due in the near future to select a suitable company to do the job, and the winner should be known before the end of this year. It is hoped that the bridge will be completed by early 2008.

The director of the Zambezi Bridge Project Office, Elias Paulo, said that the international community has already granted most of the necessary funds for the work, which have come mainly from Japan and Sweden.

France supports fight against AIDS

Mozambique and France signed on 26 April an agreement under which the French government is to grant 7 million Euros (about $9.5 million) to support the Mozambican National Strategy for the Fight Against HIV/AIDS.

The document was signed by the governor of the Bank of Mozambique, Adriano Maleiane, on behalf of the Mozambican government, and by the director of the French Development Agency (AFD) for Central and Southern Africa and the Indian Ocean, Jean Pierre Barbier.

This is the third French contribution to the Mozambican National Strategic Plan for the fight against HIV/AIDS. Under the first two contributions, France disbursed one million and five million euros respectively. The latest agreement covers the 2005-2006 period.

Success in anti-malaria campaign

The three countries involved in the Libombos Spatial Development Initiative (IDEL), Mozambique, South Africa and Swaziland, have expressed satisfaction at the results so far in controlling malaria in this border region, and turning it into an area that can attract tourists.

At a meeting on 3 May in Maputo, held to assess the trilateral programme, the coordinator for the Mozambican side, Abdul Mussa, the Maputo provincial health director, said that the results are "very encouraging".

"Since the start of the programme, in October 1999, households in rural areas of Maputo province, covering an area of 20,000 hectares, have benefited from the phased implementation of a programme of home spraying against mosquitoes", he said.

He added that in 2004 rapid malaria diagnosis tests were introduced into those health posts without laboratories. "Malaria diagnosis used to be made on the basis of patients' symptoms", he said, "but with the new mechanism it is possible to guarantee confirmed results".

Because of increased resistance in the malarial parasite, traditional drugs such as chloroquine have become virtually useless. Mussa said that new, effective drugs, based on artemisinin, have been introduced into Namaacha and Matutuine districts (on the borders with Swaziland and South Africa respectively), and recently into Boane district as well.

Mussa pointed to a sharp reduction in malaria infections in the areas covered by the programme. In Namaacha and Matutuine there had been a 75 percent reduction in diagnosis of the malarial parasite among children under 15. Less than 10 percent of the children inspected were carrying the parasite. Similar success stories from the Swazi and South African sides of the border.

With continued financing expected from the Global Fund against Malaria, Tuberculosis and HIV/AIDS for the next five years, the three countries intended to continue spraying against mosquitoes and other preventive activities aimed at reducing the transmission of malaria.

Crisis between governor and mayor worsens

The relations between the governor of the central Mozambican province of Sofala, Alberto Vaquina, and the mayor of Beira, Daviz Simango, have worsened, with Simango refusing to attend a meeting on 6 May with the governor.

The crisis between the governor and the mayor erupted earlier when Vaquina started a visit to various Beira suburbs without any formal agreement beforehand with the mayor and the city council.

Simango said he had no objection to the governor touring the city, but such matters should properly be arranged beforehand with the city council. Vaquina, however, had no intention of asking anyone for permission: as the governor, appointed by the President of the Republic, he could visit any part of Sofala province whenever he liked.

Simango's position has now hardened into a boycott of Vaquina's visit. His press attache, Albano Antonio, told reporters that the mayor would not be present at any of the places visited by Vaquina, because he had received no written communication about the visit.

He admitted that Vaquina had phoned Simango, but this phone call was not sufficient for the city council to consent to the visit. "This is more than enough reason for the municipality to take no part in the visit", said Antonio. "The mayor is the lord of the city, and should be officially informed in a written notice, which did not happen".

Vaquina tried to calm things down by arranging a meeting with Simango but the mayor did not appear.

Vaquina stated that he would go on visiting Beira with or without the collaboration of the City Council. "Sofala is one and indivisible", he said, "and so there are no parts of the province that cannot be visited by me".

The problem arises because Beira is one of only five (out of 33) municipalities run by the opposition. The opposition Renamo- Electoral Union coalition won the local elections in Beira in 2003. The Vaquina-Simango conflict thus looks like a shadow of the wider conflict between Frelimo and Renamo.

Forensic audit ordered

The long awaited forensic audit of Mozambique's privatised Austral Bank will begin in the next few weeks, seeking evidence of criminal acts in the period 1997-2001, when the bank was run by a Malaysian/Mozambican consortium.

According to a report in "Mediafax" on 3 May, the government has hired the US-based law company Leboeuf, Lamb, Green and MacRae, to undertake the audit. This company has an office in Johannesburg from which it will operate. "Mediafax" adds that possibly some of the work will be sub-contracted to an international auditing firm that is represented in Maputo.

The audit will be paid for by funds made available by the Swedish and Norwegian governments.

Austral was once the state-owned People's Development Bank (BPD). Under pressure from the World Bank and the IMF, the government was forced into a hasty privatisation of the bank in 1997, in which 60 percent of the shares were sold to the consortium headed by the Malaysian Southern Bank Berhard (SBB). The state kept the other 40 percent.

The Malaysians' Mozambican partners included former industry minister, Octavio Muthemba, who became chairman of the board of the renamed bank.

Austral's loans policy was, to put it mildly, ill-advised. By 2001 the bank was on the brink of collapse, burdened with what are politely referred to as "non-performing loans". In less polite terms, the bank had been looted, and the private owners were unwilling to recapitalise it.

In April 2001, the consortium handed their shares back to the Mozambican state, and the Malaysians left the country. The Bank of Mozambique took over, and made the head of its banking supervision department, Antonio Siba-Siba Macuacua, chairman of an interim board of directors charged with ascertaining the true financial position of Austral, and preparing it for a second privatisation.

Siba-Siba cancelled contracts he regarded as useless and published the names of over 1,200 debtors in the daily paper "Noticias".

On 11 August 2001, assailants attacked Siba-Siba in his office on the 15th floor of the Austral headquarters, murdered him, and hurled his body down the stairwell. To this date, nobody has been arrested in connection with this assassination.

The second privatisation went ahead in December 2001, when the South African group ABSA purchased 80 percent of Austral's shares.

ABSA has managed to recover the Austral computerised accounts management system - so, assuming that it has not been corrupted, it may offer investigators a useful window onto what was really happening at Austral in the late 1990s.

The forensic audit should be able to establish the true extent of Austral's bad loans, and any other fraud and malfeasance committed under the Malaysian/Mozambican management.

Chissano appointed UN envoy to Guinea-Bissau

United Nations Secretary-General Kofi Annan on 29 April appointed former President Joaquim Chissano as his special envoy to the troubled west African state of Guinea- Bissau. His task will be to facilitate peaceful and credible presidential elections in Guinea-Bissau on 19 June 2005.

The UN Office for the Consolidation of Peace in Guinea- Bissau (UNOGBIS) is led by another Mozambican, former air force commander Joao Honwana, who has warned Kofi Annan of a rise in tension as the elections approach.

The key problem is that no fewer than 21 candidates have announced their intention of contesting the presidential election - and two of them, Joao Bernardo "Nino" Vieira, and Kumba Yala, are former presidents deposed in coups.

Chissano will need all his diplomatic skills, and the patience and tolerance for which he is famed, if he is to guide the fractious Guinean politicians towards successful elections in June.

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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