Mozambique News Agency

No.305, 22nd September 2005


Mozambicans must be at helm of development

President Armando Guebuza has insisted that, as the legitimate owners of Mozambique, Mozambicans themselves must become the helmsmen of development - which means that all must change their attitudes and realise that only through hard work can the country become a developed nation.

President Guebuza was speaking to journalists in New York on 18 September, shortly before returning to Mozambique after attending the United Nations summit, celebrating the 60th anniversary of the foundation of the world body.

He declared that it was up to the youth of the current and future generations "to make hard work the main instrument that will develop our country".

President Guebuza denied a suggestion that he is opposed to foreign investment, seeing in it a veiled form of neo- colonialism. Anyone who believed such a claim, President Guebuza insisted, was much mistaken - for in reality he was very much in favour of foreign investors coming to Mozambique en masse.

What he had really said, and continued to believe, the President stressed, was that, if the country is truly to develop, then Mozambicans must be at the helm of this process, just as they were in the war to free Mozambique from Portuguese colonial rule.

That did not mean rejecting foreign assistance - and he compared the foreign investment of today with the aid that friends abroad had given to Frelimo during the liberation struggle, some by providing weaponry, others mobilising public opinion against Portuguese colonialism.

It was Mozambicans who had the responsibility to develop the country "just as it was us, more than anybody else, who had to free it from colonialism through a tough and bloody armed struggle that cost the lives of many of our compatriots".

The battle for development could take a long time, but there was no alternative to waging it - just as the young Mozambicans who took up arms against colonial rule did not know how long that struggle would last.

"Personally, I believe that with the hard work of all of us we can reach prosperity in a period of 10 to 20 years at the most", said President Guebuza.

Arm youth with education to fight poverty

For President Guebuza, the struggle against poverty was "point number one on the agenda of the government", and he was in search of a strategy on how to eliminate it as rapidly as possible. He had reached the conclusion that it was necessary to arm the youth of the present generation with the technical and scientific knowledge that would enable them to wage the war against underdevelopment - just as a previous generation of young Mozambicans had to arm themselves with firearms to struggle for independence.

"I know this is a new struggle that must be assumed inside the minds of each and every Mozambican, particularly our youth", he continued. "We have to do this, otherwise the struggle for our independence will have been in vain".

"In my opinion, all will be possible as long as we have changed our attitude towards work", President Guebuza said. "No country has developed without the hard work of its citizens".

Programme to build technical schools

One of the key elements in the government's anti-poverty strategy was the construction of technical schools in rural areas, allowing each student to leave with a profession permitting them to transform the country's resources into wealth for the benefit of their communities.

President Guebuza said the government was still raising funds for its programme to build technical schools. The World Bank had promised $6 million, "and with a little more, we can start. Even if we have just one technical school in each of our districts, that would be a great advance".

The problem with the current model of general education, said the President, was that it did not provide skills for employment or self-employment. Those who entered university, he said, should understand that they were studying so that, at the end of their courses, they could be leaders in the fight against underdevelopment. That meant that they should go to where their newly acquired skills would be most useful (rather than all staying in Maputo).

President Guebuza said the government is studying ways of ensuring that young people who conclude university courses will work in the districts for two to four years, putting into practice what they have learnt. "What happens now is that many people who have finished university courses are in the cities doing nothing, because they can't find jobs", said the President. "With this plan, we can find occupation for all these youths".

It was imperative to win the battle for development, he stressed, particularly because of the gradual dismantling of tariff barriers under the SADC (Southern African Development Community) Trade Protocol. "We must work hard so that when we reach the phase of the free circulation of goods, we can have products that are capable of competing with those from other countries", said President Guebuza. "We must improve the quality of what we produce, otherwise we will not be able to survive in a market without tariff barriers".

Turning to foreign policy, President Guebuza said he hoped that, when he visits Portugal in late October, a conclusion will have been reached to the long drawn-out negotiations over the Cahora Bassa dam on the Zambezi. The Portuguese state still owns 82 per cent of the shares in the dam operating company, Hidroelectrica de Cahora Bassa (HCB), and Mozambique wants to take a majority stake.

"I would like this agreement to be signed during my visit", he said. "The negotiations around this problem are on the right track. But I will be content, not with promises, but with positive results", he stressed, clearly alluding to the optimism shown by Portuguese president Jorge Sampaio. Last week Sampaio said he thought it "possible" to reach a deal on Cahora Bassa by the time Guebuza visited Portugal.

President urges more support for agriculture

On 15 September President Guebuza urged the United States and other donor nations to provide more support for the development of agriculture in Africa, so that the peoples of the continent can achieve self- sufficiency in food as quickly as possible.

Speaking in New York at the opening of a meeting between the United States Agency for International Development (USAID) and the New Partnership for Africa's Development (NEPAD), President Guebuza made it clear that the poor yields from African agriculture are largely due to the limited financial resources available to train technical staff, and acquire agricultural equipment.

President Guebuza stressed that, in order to break the cycle of hunger in Africa, "it is imperative that all those who are in favour of the elimination of hunger should contribute towards this. More than anyone else, it is the industrialised nations who have the financial and technical resources to carry this out".

He added that, for African agriculture to become productive and profitable for the millions of peasant farmers who depend on it, large-scale investments will be necessary, and these are currently not in sight.

President Guebuza said that, if African countries had the necessary funds, they would invest them in infrastructures such as irrigation systems, and the building of roads that would allow agricultural produce to reach domestic and foreign markets speedily. They would also invest in building factories to process some of the crops.

President Guebuza's assertion that it is lack of investment that is keeping African agriculture mired in backwardness is backed up by many studies - including NEPAD's own work.

A NEPAD study on "Balanced Agricultural Development in Africa" points out that Africa is the continent with the lowest level of investment in agriculture. From 1990 to 1996 external funding for agriculture in sub-Saharan Africa amounted to $26.7 billion, compared with $41.4 billion for Latin America, and $101.9 billion for Asia.

USAID Administrator Andrew Natsios recognised at this opening session that, far from allegations that African countries are underdeveloped because their peoples are lazy, the problem is one of lack of funds. He regarded Mozambique's rapid growth in recent years as an example of what could be done, if resources are committed. "Every time they tell me that it's not worth giving money to African countries because they're not interested in their own development, I always cite Mozambique, telling they to see how Mozambique is developing, despite emerging from a terrible war only 13 years ago", said Natsios.

Shortly before the start of this meeting. the General Director of the NEPAD Secretariat, Firmino Mucavele, told journalists that USAID will announce the grant of a further billion dollars to be spent on the development of African agriculture over the next five years.

Mucavele was optimistic that further contributions would come from NEPAD's other partners, who had also become aware of the need to support Africa's farmers.

Maputo-Nairobi flights to begin in October

Representatives of Kenya Airways met in Maputo on 21 September with local travel agents to discuss the new Maputo-Nairobi route that Kenya Airways will operate, in a code sharing arrangement with Mozambique Airlines (LAM), as from 2 October.

Kenya Airways will fly twice a week between the two capitals, on Sundays and Thursdays, via Harare. The flights will use a Boeing 737.

Under the original plan, the flights should have commenced on 4 August. But the Kenya Airways Commercial Director, Hugh Fraser, said events in Zimbabwe forced a two month postponement.

He told his audience that Kenya Airways is the fastest growing airline in Africa. The Maputo route follows the opening of routes to Istanbul in June, and to Dakar and Bamako in July.

He stressed that Mozambican travellers whose final destination is the Middle East or Far East would find easy connections in Nairobi to cities such as Dubai, Mumbai, Hong Kong and Bangkok.

He hoped that shortly Kenya Airways would be able to increase the number of flights to Maputo to three or four a week.

Housing officials sacked

Minister of Public Works and Housing, Felicio Zacarias, on 21 September sacked two senior housing officials, after the discovery of serious theft in the state housing agency, APIE.

The two officials sacked are the director of the Maputo city delegation of APIE, Arlanza Sabino Dias, and the head of the APIE services in the northern province of Nampula, Teofilo do Rosario.

In explaining the sackings to AIM, Zacarias simply declared "There are serious problems of theft". He gave no further details.

He implied that changes in his ministry will continue. "The car that I am driving has five gears, and so far I've only used first and second", he said.

Zacarias has appointed the architect Arnaldo Simango, who has worked with APIE for many years, to run the APIE Maputo office. He has transferred the former head of the Maputo provincial APIE services, Laurindo Mahoche, to Nampula to replace Rosario.

In a second body supervised by his Ministry, the Water Supply Investment and Assets Fund (FIPAG), Zacarias decided to make no changes - he has reappointed Nelson Beete as Chairman of the Board of FIPAG, the body through which the state exercises its ownership of water supply infrastructures.

Districts with potential have priority in rural finance

The $34.27 million programme of rural finance, recently launched by the Mozambican government will give priority to those districts with greatest potential for achieving success in expanding financial services, according to the programme manager, Joao Carrilho.

Cited in "Noticias" on 16 September, Carrilho, who is a former deputy minister of agriculture, said that studies are underway to determine which districts are to benefit from this initiative.

The programme, financed by the International Fund for Agricultural Development (IFAD) and by the Mozambican government, is hoping to recruit about 124,000 new clients to the financial system in rural areas within the next eight years.

"Our country has 128 districts and the programme has adopted certain criteria that recommend that priority be given to those where there is a greater probability of success, meaning places where, when one invests a certain amount of money, one can be sure of expanding these services", said Carrilho.

He added that "in this way, we are planning to identify between 10 and 20 such districts, in a first stage, and all will depend on the way in which they respond".

Commenting on the absence of peasants and small producers' associations at the two seminars organised to launch the programme, Carrilho explained that the seminars were organised only to establish the parameters. "But there will be local level meetings with those institutions, which are the direct beneficiaries of the programme. It is important to explain that the direct beneficiary of this programme is not this or that peasant, but the institution with which these peasants or fishermen are working, the association to which he or she is affiliated, or even the bank of which he or she is a client", he said.

Carrilho added that "the main objective of the programme is not to grant loans, but to create the conditions in which loans, savings and money transfers in the rural areas become attractive. For instance, we find people today who cannot open a bank account because they do not have the minimum required amount of money to do so. With this programme we must develop a system of savings that allows lower minimum deposit requirements", Carrilho said.

French support to water supply system

The French government, through the French Development Agency (AFD), has granted €7 million (about $8.44 million) to Mozambique to finance a project to improve the supply of clean drinking water in the Maputo suburbs.

An agreement to that effect was signed on 16 September in Maputo between the governor of the Mozambican central bank, Adriano Maleiane, AFD Maputo director, Francoise Desmezieres, and the French ambassador to Mozambique, Louise Avon.

At the ceremony, Avon said the idea is to help reduce by at least 10 per cent the losses of water within the system, estimated at about 15,000 cubic metres a day, an operation that is expected to benefit between 200,000 and 300,000 consumers.

The project, to be carried out by the government's Water Supply Investment and Assets Fund (FIPAG) is set to help implement a sustainable management system of about 400 water sources, that serve the more needy people in the Maputo suburbs.

Avon said her government's idea is to help develop water supply in those Maputo suburbs that are not included in the medium term plans of the Aguas de Mocambique (Waters of Mozambique) company, which is managing these services in five of the largest Mozambican cities.

She explained that this amount is in addition to an initial disbursement of €3 million, and is her country's contribution to help Mozambique meet the Millennium Development Goals in the area of water supply. This improvement in access to safe drinking water is also part of the Mozambican government's Action Plan for the Reduction of Absolute Poverty (PARPA).

For his part, Maleiane described water supply as a matter of survival, and thus this French contribution represented a major step towards improving people's living conditions.

Drinking water for primary schools

About 40,000 pupils in Mozambican schools will benefit from clean drinking water, under a modern water supply system, presented in the southern city of Matola on 12 September by a partnership that brings together the Mozambican Ministries of Education and of Public Works, the United Nations Children's Fund (UNICEF), the World Health Organisation, and a private Dutch company, TNT.

The initiative uses pumps that are linked to playground merry-go-rounds. As the children play on the merry-go-round, they turn it, which pumps up water.

A press release issued by the partnership states that the merry-go-round pumps are part of the broader "Flourishing Schools" programme, initiated with a grant of $444,000 from TNT.

The first pump was inaugurated in the Intaca Primary School in Matola. The Ministers of Education and Public Works, Aires Ali and Felicio Zacarias, attended the ceremony, and stressed the government's commitment to attain the Millennium Development Goals (set by the UN's Millennium Summit in 2000) in the areas of education, and access to clean water and decent sanitation.

"The objective is to supply all our schools with water, and this programme is an important step in that direction", said the two Ministers.

WFP representative Angela Van Rynbranch said on the occasion "working in partnerships is essential when we want to help the education and water sectors in Mozambique, which need to recover after suffering so much during the war".

The "Flourishing Schools" programme intends to provide 60 schools in rural areas of southern and central Mozambique with drinking water and sanitation. In the initial phase, 30 merry-go-round pumps will be installed in primary schools in Maputo, Gaza and Inhambane. 30 schools in the central provinces of Manica and Sofala will receive conventional hand pumps.

"Access to clean water and sanitation", said UNICEF representative Leila Pakkala at the Matola ceremony, "is a decisive factor for keeping children at school and helping them learn about a healthy environment".

Under this initiative, which also enjoys support from the World Bank, UNICEF is taking care of the installation of latrines and giving lessons in hygiene, while the WFP and TNT deal with drilling boreholes for water.

Agreement signed on World Bank credit

The Mozambican government and the World Bank on 16 September signed in Maputo a legal agreement on the credit of $120 million to be used in poverty reduction initiatives.

Signing the agreement were the Minister of Planning and Development, Aiuba Cuereneia, and the chief economist at the World Bank mission in Maputo, Gregor Binkert.

Cuereneia pledged that interventions in infrastructures, agriculture, health and education will continue to merit special attention from the government in its drive to reduce levels of poverty.

"It was thanks to the gains from the reforms under way in Mozambique that the World Bank has decided to grant a further credit to assist in the fight against absolute poverty", said Binkert.

A World Bank press statement went into more detail, saying that the first disbursement ($60 million) from this credit was possible because of such measures as the government's allocation of around 65 per cent of the budget to priority areas for poverty reduction, and the introduction of a new law last year on financial institutions intended to improve the functioning of the Mozambican financial and banking system.

The World Bank was particularly pleased with the roll-out of the new computerised state financial management system, known as SISTAFE, which was introduced in the Finance Ministry and all its provincial directorates in November 2004.

The statement claimed that SISTAFE "has already begun to bring benefits, such as speed in the allocation of financial resources, greater transparency, and greater accountability in the management of public funds".

The second tranche of the credit, also for $60 million, will be disbursed in 2006 - but only if the government meets a series of indicators, including the definitive adoption of a new commercial code (replacing a Portuguese code dating back to the 19th century), and reforms in the judicial system. The release mentions specifically the tabling to parliament of a bill to overhaul the functioning of the law courts, and a review of the legal code governing notarial offices.

But perhaps the most important benchmark laid down is that a modern system of procurement, in line with international standards, should be adopted.

The World Bank also wants to see SISTAFE expanded into other Ministries, notably the Ministry of Education, and an increase in the funding for the Central Anti-Corruption Office that operates under the Attorney-General.

These demands are broadly in line with the Aide-Memoire agreed in May between the government and those of its foreign partners (including the World Bank) who provide aid directly to the budget.

The credit is on the usual terms of the World Bank's soft loans arm, the International Development Association (IDA). It is to be repaid over 40 years, with a 1.25 per cent interest rate and a ten year period of grace.

Credit rating for Mozambique

The world's largest credit rating agency, Standard and Poor's (S&P), has rated the Mozambican government for the first time, under an arrangement funded by the United Nations Development Programme (UNDP).

S&P is a private American company, owned by the publishing concern McGraw-Hill. It has tens of thousands of clients, mostly companies, who pay to be credit-rated.

Since 2003, S&P has been working with the UNDP to bring credit ratings to governments in sub-Saharan Africa: the UNDP provides technical and financial assistance to the governments being rated. However, the governments concerned must request rating.

To date, S&P has given credit ratings to 13 African governments. Three of these are in the north of the continent, and ten are in sub-Saharan Africa. Of the latter, seven have been rated under the cooperation between S&P and UNDP.

Speaking at a joint S&P/UNDP seminar on 9 September in Maputo, the S&P managing director for sovereign and international public finance ratings, David Beers, said that S&P has given Mozambique a rating of "B" (identical to that of Burkina Faso and Madagascar).

The ratings range from "AAA", which denotes "extremely strong capacity to meet financial commitments", down to "D" for those countries or companies which have defaulted on one or more commitments.

Mozambique's B means that it is "more vulnerable to adverse business, financial and economic conditions, but currently has the capacity to meet financial commitments".

Perhaps more significant is the S&P outlook for Mozambique. Such outlooks indicate the direction in which S&P believes the credit rating may move over the next two or three years. For most governments, the S&P outlook is "stable" - meaning S&P does not expect the credit rating to change.

But in Mozambique's case, the outlook is "positive", which means that, over the next couple of years, the credit rating may be increased.

Beers said that Mozambique's strengths included the rapid growth in its exports, increased foreign direct investment in the country, and the government's "commitment to deepening reform".

In addition, Mozambique enjoyed a "consistently high level of donor financial support".

But the rating also had to take into account the country's well-known weaknesses - notably its large fiscal deficit, its narrow domestic tax base, and the government's high debt burden (although this has fallen sharply thanks to international debt relief initiatives).

Beers also pointed to Mozambique's "high vulnerability to external shocks".

An S&P credit rating is essentially a forecast: it is the agency's opinion as to the creditworthiness or a government or a company, and thus an estimate of its risk of defaulting on financial commitments.

Governments want to be rated, Beers said, because such ratings demonstrate their financial transparency, and help attract foreign investment. They may also improve access to international bond markets (though this is unlikely to be a consideration in Mozambique's case), and encourage the development of domestic capital markets.

The UNDP resident representative, Marylene Spezzati, told the meeting that credit ratings "can play a role in strengthening investor confidence in Mozambique", and "enhance access to foreign capital".

She argued that the very fact that 13 African countries have requested credit ratings showed "increased financial transparency" in the continent.

Women still disadvantaged - Prime Minister

Prime Minister Luisa Diogo stressed in Maputo on 19 September that "in Mozambique, as in many other countries, women are still at a disadvantage. Women have greater domestic burdens and responsibilities than men, who have more time for leisure and greater involvement in public life", she said, speaking at the end of a march by women who delivered a manifesto to the government, calling for gender issues to be taken seriously in all aspects of life, and stressing the indispensable role of women in the struggles against poverty and against AIDS.

Prime Minister Diogo praised the Women's Forum, the alliance of Mozambican women's organisations, for their role in the world movement putting pressure on governments to take measures on such issues as domestic violence and "the feminisation of poverty".

The Prime Minister noted that a commitment to the emancipation of women dates from the time of the war for Mozambican independence, and that equality of rights and opportunities between men and women is a principle enshrined in the Mozambican constitution.

Training women to play a full role in development was one of the priorities of the government, she said. That also meant that women must have access to and control over resources, and to decision-making.

The fight against the feminisation of poverty, she added, required an approach focused on girls' education, health care, and access to the means of employment or self-employment.

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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