Mozambique News Agency

AIM Reports


No.318, 19th April 2006


Improved electricity supply for Lichinga

President Armando Guebuza on 17 April encouraged the residents of the northern province of Niassa to take advantage of the potential of the new infrastructures now being built and use them in the fight against poverty. President Guebuza was addressing a gathering during the official inauguration of an electricity substation on the outskirts of the provincial capital, Lichinga.

The President likened poverty to a snake that enters our home, saying that, even though the snake is dangerous, no-one abandons his house. "We cannot run away from our house because of a snake, but we should find ways to fight against it and get rid of it", said President Guebuza, shortly before he addressed a rally in Lichinga.

The Lichinga substation, which draws its power from the Cahora Bassa dam on the Zambezi, is part of the Gurue-Cuamba-Lichinga electrification project, funded by Norway and Sweden to the tune of $43.8 million. The work consisted of installing 335 kilometres of power transmission line, from Gurue, in Zambezia province, to Lichinga, passing through Cuamba, Niassa's economic capital.

The Cuamba and Lichinga substations will have a major social and economic impact as the towns have been using electricity from small hydroelectric power stations which cannot meet the needs of the growing number of consumers.

The project to link all provincial capitals to the Cahora Bassa electric grid is now completed, and the publicly owned electricity company, EDM, will now tackle the issue of electrifying rural areas and improving the quality of service.

Briefing President Guebuza during an extraordinary session of the provincial government, Niassa governor Arnaldo Bimbe said that while the new electricity substations raise hopes for improvements in the Niassa economy, the same cannot be said for the province's roads.

Niassa has about 6,000 kilometres of roads, of which only 434 kilometres are tarred. Because of the poor state of the roads, most of them can only be used during the dry season. Bimbe added that although trains resumed using the branch line from Cuamba to Lichinga in 2005, they are very irregular, because of the poor state of the line. These transport difficulties contribute to the high cost of living in Niassa.

The governor also told President Guebuza that traditional authorities and local communities have been denouncing acts of corruption, resulting in 28 civil servants being dismissed from their posts.

He added that the provincial government has been following up the recommendations left by President Guebuza, during his last visit to the province in 2005. Thus the government has been encouraging income generation and self-employment initiatives. Peasant communities have been involved in building schools and health posts, with resort to local materials, and in improving the access roads in the province. Since President Guebuza's last visit, two new secondary schools have been set up in Niassa, in the districts of Mavago and Metarica, thus satisfying a frequent demand from the local people.

Labour body meets to discuss economy

The Labour Consultative Commission (CCT), the tripartite forum between representatives of government, trade unions and employers' associations, met in Maputo on 5 April to analyse the development of the economy in 2005, and the macro-economic factors that should be taken into consideration when increasing the statutory minimum wage.

Speaking to reporters, the Minister of Planning and Development, Aiuba Cuereneia, said that a new minimum wage can only be fixed after analysing the economic performance last year. This would provide the basis for any wage increases. The revised figures for 2005, the Minister added, showed that the Mozambican economy grew at a rate of 8.9 per cent, but that inflation over the year reached 14.9 per cent.

The growth rate is one of the highest in the world, but inflation is much higher than the target of eight per cent.

Cuereneia stressed the government policy of taking the district as the pole for the country's development, and the fact that, as from this year's budget, the district is being treated as a budgetary unit. Each district has been granted seven billion meticais (about $280,000) for investment purposes.

The government, employers and trade unions all had a role to play in district-based development, Cuereneia said. "The minimum wage will be discussed, taking these factors into account".

Francisco Mazoio, the spokesperson of the main Mozambican trade union federation, the OTM, said the unions took a positive view of last year's economic growth - but this had to be translated into a real impact on people's living standards. "The unions want to recover the purchasing power lost because of inflation", he said. "And because there has been economic growth, we have to find ways to ensure that this is reflected in workers' lives".

The OTM wants to see the minimum wage based upon the cost of a monthly basket of basic goods and services for the average five-member family. Currently such a basket would cost 3.7 million meticais (about $148). The current statutory minimum wage for industry and services, however, is only 1,277,139 meticais a month.

Ombudsman proposal debated

The Mozambican parliament, the Assembly of the Republic, on 18 April began debating a government bill establishing the office of the ombudsman. The ombudsman is envisaged in the constitutional amendments passed in late 2004, but without a law on the statute of the ombudsman and his office, it has been impossible to choose anyone to fill the post.

In line with the constitution, the ombudsman must be elected by the Assembly by a two thirds majority. Since the ruling Frelimo Party does not quite have a majority on this scale, the appointment will depend on finding a consensual figure acceptable both to Frelimo and to the opposition Renamo-Electoral Union coalition.

The ombudsman must be at least 35 years old and a person "of recognised probity and impartiality". In the exercise of his duties, the bill states, the ombudsman "owes obedience only to the constitution and the laws". Nobody holding a position in a political party may be elected ombudsman, and the ombudsman must refrain from making "statements of a political party nature

Introducing the bill, Justice Minister Esperanca Machavela described the ombudsman as "a body external to the Public Administration, who should guarantee compliance with and the effectiveness of the legal norms that guide the relationship between the administration and those being administered".

The ombudsman cannot take binding decisions, but should "make recommendations to the relevant bodies with a view to correcting illegal or unjust acts or omissions of the public powers or to improve their respective services".

The ombudsman may also note defects in the law, and suggest amending or revoking legislation. He will also have a public education role in publicising legislation on the rights, duties and freedoms of citizens.

Before issuing a recommendation, the ombudsman must always hear the version of the person or body against whom the complaint is directed - unless the person concerned refuses to speak to the ombudsman.

The major problem facing the ombudsman's office is that it is not in the 2006 budget. The government's original calculations were that the annual cost of the ombudsman would be 65.24 billion meticais (about $2.6 million), but the Assembly's Legal Affairs Commission reduced the bill's costs substantially, by eliminating the two assistant ombudsmen and the provincial ombudsmen, on the grounds that these figures are not envisaged in the constitution.

The Plan and Budget Commission wanted the government's figure of 65.24 billion to be spread over three years, with the relatively small figure of 10.4 billion spent this year. The only way to do this however is to endow the Ministry of Justice with an extra fund for the expenses of setting up the ombudsman's office.

Assembly votes in favour of currency reform

The Assembly of the Republic, on 5 April once again reasserted its view that there is nothing unconstitutional about the currency reform now under way. The reform seeks to make the Mozambican currency, the metical, more manageable, by knocking off the last three digits.

Thus the current 1,000 metical coin will be worth one of what the government calls the "new family" of the metical. The largest of the current banknotes, for 500,000 meticais, will be worth 500 of the new meticais.

The new banknotes and coins should enter circulation as from 1 July. From July to 31 December, both "families" of the metical will be legal tender, but the old coins and notes will gradually be withdrawn from circulation.

The opposition party Renamo, however, claims the proposal is is unconstitutional, because the law approving the currency reform was passed last November by a simple majority, rather than a two thirds majority. Renamo argues that the reform is a change in the currency, which under the constitution, requires a two thirds parliamentary majority.

Renamo appealed to the Constitutional Council, which asked for a detailed opinion from the Assembly. This opinion, citing the relevant laws in great detail, was drawn up by the Assembly's Legal Affairs Commission. Its conclusion was that only a simple majority was required, as there was nothing unconstitutional about striking three digits off the metical.

On 5 April the Assembly plenary passed a motion which simply approved the Commission's opinion.

Cardoso assassin escape attempt fails

The Mozambican police say they have foiled another attempt by the country's most notorious assassin, Anibal dos Santos Junior "Anibalzinho" to escape from prison. Anibalzinho is serving a 30 year prison sentence for his part in the murder of Mozambique's foremost investigative journalist, Carlos Cardoso, in November 2000.

According to the police, on the night of 12 April a guard discovered that Anibalzinho had sawn completely through one of the bars on his cell window.

In March the police frustrated an escape attempt, in which a relative had tried to smuggle equipment into the cell, hidden in the food and hygiene items sent by the assassin's wife. After this, the police banned all visits to Anibalzinho and decreed that he could no longer receive food from outside.

Contacted by AIM, the Cardoso family lawyer, Lucinda Cruz, said the two escape attempts, separated by just a month, showed that she had been right to demand, during the trial in December, that Anibalzinho should serve his sentence in Portugal, the country of which he is a citizen. She predicted future escape attempts, and "this is going to be a nightmare for people permanently threatened by him".

"It's unbelievable!", Cruz exclaimed. "Saws didn't get into the cell miraculously. This means that someone in the police is helping him".

In February, interviewed by the independent weekly "Savana", Cruz said she had received threatening phone calls, one of which came from a man claiming to be Anibalzinho. The voice, she said, sounded like the assassin's, although she could not be certain.

Anibalzinho's niece, Julia Pedro, who had tried to smuggle the escape equipment to him in March was hauled before a court. But she managed to persuade the judge that she had no idea what was hidden inside the parcel she was carrying, and was promptly released. The police are now supposed to be investigating Anibalzinho's wife, Isabel Vicente.

Anibalzinho has escaped twice from the Maputo top security jail - once in September 2002 (to South Africa), and again in May 2004 (to Canada). On both occasions he was caught and repatriated. Seven policemen were arrested in connection with the first one - but the prosecution bungled the case, and all were acquitted. Nobody at all has been detained in connection with the second escape.

The two escapes persuaded the police that the top security jail was not secure at all, and since his return from Canada, in January 2005, he has been incarcerated at the Maputo police command.

Government and donors conclude joint review

The Mozambican government and the 18 donors and funding agencies who provide direct support to the state budget on 13 April concluded their joint review of the government's performance in 2005, assessing it as "positive".

The 18 countries and agencies are known as "Programme Aid Partners". Their budget support amounts to about a third of all foreign aid to Mozambique.

For 2006, 17 of the 18 partners have promised around $300 million of budget support. The 18th, which only joined the group recently, is the African Development Bank (ADB), whose contribution in 2006 is expected to be $60 million. The Programme Aid Partners also include the World Bank, the European Union, most EU member states, Switzerland and Canada. The main aid donors who are still refusing to provide budget support are the United States and Japan.

Opening the meeting between the government and its partners, the Minister of Planning and Development, Aiuba Cuereneia, said the joint review, which took place over 45 days, was marked by "open and frank debate about the performance of both sides, in order to achieve a consensual perspective to seek for better solutions".

Cuereneia reiterated the government's commitment to implement the strategy contained in the recently concluded second Action Plan for the Reduction of Absolute Poverty (PARPA II). "This commitment is guaranteed", he said, "because the government's central mission is the fight against poverty and the continual improvement of the living conditions of the population".

The outgoing chairperson of the donor group, Swedish Ambassador Maj Inger Klingvall, declared that, as a result of the positive outcome of the joint review, the partners were recommending continued budget support for 2007. However, she warned that donors are concerned that the government failed to meet agreed targets in the area of governance. For the entire programme there were 49 targets. The government did well in macroeconomic management where it met all ten of the targets, and in economic development where it met 13 out of 16. But in governance, eight out of 13 targets were missed, thus compromising public sector reform and the fight against corruption.

Nonetheless Klingvall believed there was "strong political will" to make speedy advances in anti-corruption measures, reforming the justice sector, and the public service as a whole, and in improving public financial management.

Klingvall said donors are also concerned at the rapid spread of HIV/AIDS. She hoped that the joint review "has encouraged the government to set its sights higher, and to sharpen still further the fight against this pandemic".

She praised the political leadership shown by President Armando Guebuza in the battle against AIDS, and hoped that the government will prove able "to maximise all resources" in this struggle.

IMF praises tax performance

The International Monetary Fund (IMF) has stopped criticising the Mozambican government for not collecting enough tax, and has instead praised the country's fiscal performance in 2005 as "better than expected".

This is one of the findings contained in a statement issued on 4 April at the end of the visit of an IMF team, led by Jean Clement, that spent a fortnight in Mozambique to review progress of the country's economic programme supported by the IMF's Poverty Reduction and Growth Facility (PRGF).

The talks the team held with Mozambican officials are preliminary to the next discussions of the Mozambique programme by the IMF Board, scheduled for June.

Last year, the IMF strongly criticised the government for an alleged "deterioration" in fiscal performance, and demanded that more taxes be collected.

Now there has been a remarkable change of tune, with the IMF sounding more upbeat about the fiscal situation than the government, despite tax collection in 2005 being 2.7 per cent below target.

The IMF statement said that "the mission found that implementation of the government's program has generally been good in 2005. Fiscal performance was better than expected, on account of higher domestic revenues and lower expenditures. Progress has been made in reforming revenue administration and widening the tax base, as well as strengthening public expenditure management".

In its sole, gentle rap over the knuckles, the mission declared "there is a need to reinvigorate public sector reform, in particular civil service reform".

The IMF found that "prospects for 2006 are for continued strong economic growth, containment of the impact of external shocks on inflation, and maintenance of a sustainable fiscal and external position, consistent with the medium-term goal of sustaining poverty reduction".

Under last year's Multinational Debt Relief Initiative, pushed through by the G8 group of most industrialised nations, Mozambique stands to see its debt stock reduced by about $1.8 billion, according to the IMF's figures. Of this sum, $154 million was debt to the IMF, which the Fund cancelled on 6 January.

Resources released by debt relief are intended to help attain the Millennium Development Goals (MDGs) set by the United Nations Millennium Summit in 2000.

The IMF mission believed Mozambique is on track to meet four of the key MDG targets - to cut the number of people living on less than a dollar a day by half between 1990 and 2015, to cut the under five mortality rate by two thirds and the maternal mortality rate by three quarters, and to halve the number of people without access to safe drinking waters, again all by the year 2015.

But the other MDGs, namely universal primary school enrolment, gender equality, and reversing the spread of HIV/AIDS, "call for a more effective use of additional donor support as well as an expansion in absorptive capacity".

Among the key measures the IMF calls for is "ensuring an appropriate composition of government expenditure with an increasing share of priority expenditure (education, health, and infrastructure)".

The mission also urged the government to "continue prudently the fiscal decentralisation strategy with due regard being paid to sequencing, in particular the need to buttress local administrative capacity and financial auditing and reporting".

Finally, the IMF calls for "strengthening the transparency of natural resource management and exploitation, and ensuring that the country benefits more from activities of the mega-projects, including through the State budget".

This takes up again the IMF's complaints of last year that mega-projects such as the MOZAL aluminium smelter are not paying enough tax. In a visit to Mozambique in July, the IMF deputy managing director, Takatoshi Kato, complained that Mozambique has one of the lowest tax revenues-to-GDP ratios in southern Africa, and called for the elimination of tax exemptions.

German funds for tertiary roads

The German development bank, KFW, has granted euro 12 million for the building and maintenance of 277 kilometres of tertiary roads in the southern province of Inhambane. A contract for this was signed in Maputo on 12 April between the governor of the Bank of Mozambique, Adriano Maleiane, and the director of KFW in Maputo, Carsten Sandhop.

Speaking shortly after the signing ceremony, both Maleiane and Sandhop stressed the importance of tertiary roads in the development of the rural areas by facilitating the marketing of agricultural produce.

The work is budgeted at euro 12 million (about $14.4 million), and the Mozambican Road Fund is to contribute with a further $2.4 million. The undertaking, that should take about 18 months, is to start in the third quarter of this year.

German cooperation with Mozambique has centred its attention on the development of socio-economic infrastructures in three provinces, namely Inhambane, in the south, and Sofala and Manica in the centre of the country.

Company formed for Zambezi development

The Zambezi Valley Planning Office (GPZ) has set up a company, in partnership with Chinese and Portuguese business interests, with the main purpose of attracting Chinese investment to central Mozambique.

The new company is named Zamcorp, and 55 per cent of its initial capital of half a million US dollars has been put forward by the Mozambican state through Sogir, the business arm of the GPZ. Geocapital, a company owned by the Macau magnate Stanley Ho and by his Portuguese associate Jorge Ferro Ribeiro, holds 35 per cent, and the remaining ten per cent belongs to Mozacapital, which consists mainly of private Mozambican investors.

According to a report in "Mediafax" on 17 April, the head of the GPZ, Sergio Vieira, becomes the chairman of the board of Zamcorp. The chairman of the Zamcorp general meeting is prominent Portuguese lawyer, Antonio Almeida Santos. He is a senior figures in the Portuguese Socialist Party, and was once speaker of the Portuguese parliament.

Zamcorp intends to promote a visit to the Zambezi Valley later this year by major Chinese companies.

Ferro Ribeiro declared that the former Portuguese colony of Macau, now a special administrative region of China, "is a privileged platform for deepening economic relations between the People's Republic of China and Mozambique".

Common fund against AIDS

The Mozambican government and seven donors and funding agencies on 3 April signed a Memorandum in Maputo setting up a Common Fund for disbursing assistance for the fight against HIV/AIDS. Under this agreement, the government's partners channel their financial aid through the Common Fund account, managed by Mozambique's National AIDS Council (CNCS), thus significantly reducing the administrative burden involved when the CNCS had to deal with each donors individually.

The Fund may only be used to finance the CNCS Annual Operational Plan, but the partners may not cherry-pick projects within that plan. The CNCS has discretion to use the money to implement anything within the plan, and the Memorandum states "Common Fund partners may not earmark funds for any specific objective".

The seven partners promise to provide their aid "in a way that is aligned with Mozambican instruments, processes and systems of financial management". They also commit themselves to eliminating unnecessary bilateral procedures (such as reporting requirements), and to "mounting joint missions, undertaking joint analysis, using joint procedures, and reducing the number of visits and overlapping activities".

The Memorandum contains an anti-corruption clause, in which the CNCS pledges to ensure that its staff and consultants do not engage in corrupt or fraudulent practices. The CNCS and its partners "will promptly inform each other of any instances of corruption", and the CNCS "will propose specific measures that will be taken to correct the situation".

The seven partners signing the memorandum were the World Bank, Sweden, Britain, Canada, Ireland, Denmark, and the Global Fund to Fight AIDS, Tuberculosis and Malaria.

South African company takes stake in port

The South African shipping company Grindrod has taken a 12.24 per cent share in the Maputo Port Development Company (MPDC), the consortium that has a 15 year lease on Maputo port. MPDC is registered as a private Mozambican company, 51 per cent of whose shares are held by the International Investor Consortium, led by the British Mersey Docks and Harbour Company. The remaining 49 per cent of the shares are held by Mozambique's publicly-owned port and rail company, CFM.

Grindrod acquired its stake in MPDC from the existing private investors, but Grindrod has not revealed how much it paid for the shares.

Grindrod was already involved in Maputo port through its ownership of the Matola Coal Terminal. That occurred in February 2005, when Grindrod took control of the Namibia-registered company, African Portland Industrial holdings (API), which owned both the Matola Coal Terminal and the Walvis Bay Coal Terminal in Namibia.

At the same time as announcing its stake in MPDC, Grindrod also declared that it plans to spend up to $25 million upgrading the Matola Coal Terminal, to lift the terminal's capacity from the current 1.7 million tonnes a year, to six million tonnes.

The commitment of a major South African company to the port and the coal terminal may finally induce the long-awaited increase in South African cargo through Maputo. Maputo port is operating at nowhere near its capacity of 15 million tonnes of cargo a year. Last year it handled about six million tonnes.

This poor performance is doubtless why MPDC has been defaulting on its lease payments to CFM. In March the chairman of the CFM board, Rui Fonseca, announced that MPDC currently owes ten million dollars to CFM.

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

email: Mozambique News Agency

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