Mozambique News Agency

AIM Reports


No.321, 26th May 2006


President Guebuza offers to host ADB assembly

President Armando Guebuza announced on 17 May in Ouagadougou that Mozambique is prepared to host the 2008 General Assembly of the African Development Bank (ADB). Speaking during the ADB Assembly, President Guebuza said that Mozambique possesses all the conditions necessary to host the meeting.

Mozambique has been home to the bank's southern African headquarters since February this year. President Guebuza pointed out that Mozambique has been exemplary in implementing projects financed by ADB, and is up-to-date with its quotas to the bank.

The ADB General Assembly is the most important forum of this institution, and brings together the finance and planning ministers of the member states, other senior political figures, business people from the public and the private sectors, and representatives of civil society.

In his speech, President Guebuza stressed that one of the areas that should deserve full attention of the Africans is the effort to consolidate sustainable, dynamic and competitive economies and their increased insertion into the world market. "Those economies should be empowered to attain high rates of growth over long periods and on a wide-ranging and inclusive basis, with a continuous growth of the private sector", he said.

He noted that only by strongly inserting themselves into the world market will African economies benefit, in the medium and long terms, from access to new knowledge and new technologies.

Speaking specifically of Mozambique, President Guebuza said that the country needs systematic action to develop human resources, infrastructures and adequate institutions, particularly in the areas of education, health, energy, communications, and good governance.

But he also stressed the need to involve the private sector, particularly medium and small companies, as partners of the government because of their potential to contribute to economic growth and to the eradication of poverty by creating more jobs.

President Guebuza was optimistic that a positive impact could result from ADB intervention in strategic areas, such as seeking solutions to problems created by the increase in the oil price.

The president also praised the ADB decision to provide direct support to the Mozambican state budget: the ADB is one of 18 donors and funding agencies that have opted to provide part of their aid to Mozambique in direct budget support.

He also hailed the ADB for approving a debt write off for 33 African countries, including Mozambique, stressing that this is a contribution to those countries' efforts to attain the Millennium Development Goals.

Among the speakers in the opening session were the President of Liberia, Ellen Johnson-Sirleaf, and the head of the transitional government in Ivory Coast, Konan Banny.

Sirleaf, the first African woman head of state President, was strongly acclaimed when she announced that her country is back in the African and world family of nations and ready to embark on the route of development, after long years of destruction in a devastating war, caused in no small measure by her predecessor Charles Taylor, now awaiting trial for war crimes.

For his part, Banny said that his country, where the ADB was born, has been working hard to try and resume its place within this institution, and that all parties involved in the peace process are committed to organising elections on 30 October this year.

Forest sector receives funding

The Finnish government and the International Financial Corporation (IFC), the private sector funding arm of the World Bank, signed an agreement in Maputo on 15 May under which they will grant an additional €200,000 (about $240,000) to support small and medium-sized operators in the forestry sector.

Finnish support to Mozambique totals about $20 million a year, mainly in the form of direct support to the state budget and for the sectors of health, education, and rural development.

The IFC considers that despite improvements in the business environment in Mozambique, "there are still many difficulties for local companies to attract foreign private investment". On the other hand, small and medium-sized companies are unable to generate new taxable revenue, to export their products and to come together to create competitive industries.

The IFC believes that the only way to guarantee the creation of jobs for the poor is through effective support programmes for small-scale private companies. Therefore it will give loans of between $100,000 and $1 million on a commercial basis for existing businesses that show a good potential for growth.

Currently around 20 Mozambican companies are benefiting from IFC finance totalling $9 million.

According to Ronaldo Toledo, manager of the IFC Maputo office, the criteria for eligibility to the IFC funding concern the sustainability of the undertaking. A candidate company must have been in existence for at least three years, and must already be making a profit. It must also present a programme for sustainable expansion.

New labour law under discussion

The Labour Consultative Commission (CCT), the tripartite forum between government, trade unions and the employers' associations, met in extraordinary session on 22 May to discuss finalising the draft of a new labour law, that will go before the country's parliament later this year.

But, despite months of discussion and redrafting, there is still disagreement over key issues. The trade unions are fighting in particular to defend generous, legally enforceable terms for redundancy payments - thus frustrating the hopes of the employers who wanted the existing draft to go through unamended.

The employers have long argued that the current labour legislation is "inflexible", favouring workers and penalising companies. They want to make it easier and less expensive to sack workers.

Under the current labour law, redundancy pay for anyone who has worked in a company for over three years is three months wages for every two years or fraction of two years worked.

The new draft seeks to reduce this dramatically, to 15 days wages for the first year worked, and seven days for each subsequent year. And if the company "lacks economic resources" (i.e. has gone bankrupt), the redundancy pay owing to the workers is cut by half.

The employers argue that such changes will make companies "more competitive": the unions retort that employers will be encouraged to make massive lay-offs of staff, if they know it will not cost them very much.

A further bone of contention is the recruitment of foreigner workers. The employers want the right to recruit up to 12 per cent of their work force from abroad without having to seek authorisation from the Labour Ministry. But the unions are suspicious of the employers' motives for this change, and want to see a law that is tighter in protecting employment opportunities for Mozambicans.

Labour Minister Helena Taipo, who chairs the CCT, told reporters she regard the draft law as "balanced", and "reflecting the interests of the country". She thought discussions had been "positive", and that a new labour law would indeed be in place by 2007.

One surprising change mentioned by Taipo concerns holidays. Under the current law workers do not have any right at all to holidays in their first year of employment. The new proposal would give workers 12 days holiday in the first year, 24 days in the second, and 30 days from the third year onwards.

A change that employers will welcome concerns the ad-hoc public holidays so frequently declared by provincial and district governments. It only needs a visit by a senior official, such as the President of the Republic, for the local authorities to declare that all workers can take the day off (with no loss of pay).

Taipo said that under the new proposal such practices will be illegal, and only the Labour Ministry can announce any additional holidays, with at least two days advance notice.

The spokesperson for the union side, Francisco Mazoio, was also upbeat about the discussions. He told reporters he was sure that when the final draft emerges, it will damage the interests of none of the negotiating parties.

"It's easy to achieve consensus and establish a balance", he claimed. "There's give and take on both sides. For us, that's healthy".

AGM of Maputo Corridor Logistics Initiative

The Maputo Corridor Logistics Initiative (MCLI) has succeeded in creating "a greater awareness of the strategic benefits of the Maputo Corridor for the freight logistics stakeholders of the region, as well as an environment for cooperation and communication between stakeholders", declared the MCLI co-chairperson, Matthews Phosa, at the MCLI annual general meeting in Maputo on 18 May.

The Maputo Development Corridor was launched by the then presidents of Mozambique and South Africa, Joaquim Chissano and Nelson Mandela, ten years ago, in May 1996. The key aims were to upgrade Maputo port, and the road and rail links between Maputo and South Africa, in order to attract more South African traffic to the port.

Whereas the earlier rehabilitation of the Beira and Nacala corridors had relied heavily on donor funds, this time the stress was on private investment, and what Chissano at the time described as "the necessary partnership" between government and the business class.

The MCLI was set up in February 2004, in order to promote the Maputo Corridor as a "first choice" transport route linking the South African provinces of Gauteng, Limpopo and Mpumalanga to world markets via Maputo.

The MCLI is incorporated in South Africa, but its members are companies from both South Africa and Mozambique. It thus has two co-chairmen, Phosa for the South African side, and Antonio Almeida Matos for the Mozambican side.

Phosa declared, "the success of MCLI is solidly rooted in the spirit of working together of the relevant stakeholders from both the private and public sectors".

A great deal had happened in a relatively short time, he said, "but we cannot afford to sit back on our laurels since there is still much work to be done to ensure that the freight logistics capacity created through this pioneering process is fully optimised to the benefit of the state, the private sector investors, service providers and users of this corridor".

The South African High Commissioner to Maputo, Thandi Lujabe-Rankoe, declared that now was "an age of hope" for both South Africa and Mozambique. The opportunities created must be used, she urged, and "we must ask ourselves what can we do as government and as private sector to maximise the opportunities that the Maputo Corridor presents to us".

She warned of two serious problems hindering development of traffic down the corridor.

One is the border post at Ressano Garcia on the Mozambique/South Africa frontier. Not only are the border facilities cramped, but also it is only open for 13 hours a day (from 06.00 to 19.00). There is a proposal to keep the border open until 22.00, but business will only be satisfied with 24 hour opening.

The second problem was the poor state of the Maputo-Ressano Garcia railway. This arises from the failure of a consortium headed by the South African rail company Spoornet to take up its lease on the line.

Thus, while there is now an excellent toll road between South Africa and Maputo port, the railway is still suffering from serious capacity problems.

"Both the Mozambican and the South African governments are aware of how important it is that the rail line should become operational as soon as possible", said Lujabe-Rankoe, "and discussions to solve the issue will take place shortly".

No privatisation of land

Minister of Public Works and Housing, Felicio Zacarias, insisted on 23 May that the government has no intention of opting for the privatisation of land. Speaking at the end of a two-day conference in Maputo on future housing policy, Zacarias said that land privatisation would not solve the problems either of housing or of agriculture.

Land was nationalised immediately after Mozambican independence in 1975. None of the constitutional amendments since that date have changed the position that all property in land vests in the state, and that land cannot be bought and sold or otherwise alienated.

Land tenure takes the form of long term leases granted by the state. The current system is strongly supported by Mozambican civil society which fears that privatisation of the land would rapidly lead to a concentration of land in the hands of the rich and the creation of a class of landless peasants.

Zacarias clearly shares these fears. He warned the conference that, if privatisation were to occur, only a tiny percentage of Mozambicans would become landowners. Peasants might start off with the land that they tilled, but they would be tempted to sell it - particularly at moments of crop failure, if they needed money to buy food.

For Zacarias, in order to defend the greatest asset of the Mozambican people, land must remain state property. "The land is not going to be privatised", he said. "The experience of neighbouring countries shows that privatisation is not viable. More than 90 per cent of the population would be left without access to land if it were privatised".

Participants at the conference had been concerned that land could not be used as collateral for loans, and regarded this as a constraint hindering the building of more houses.

For Zacarias, the solution lay in making it easier for citizens to acquire land titles, and allowing them to use the titles as collateral. "It is possible to take the land use title and make it bankable", said the Minister. "That is what is important right now".

Zacarias said the contributions from this conference pointed the way to a future housing policy document, which he hoped would be ready by 2009.

Key issues indicated by conference participants included how to finance housing, and the high cost of building materials. They suggested tax exemptions for the producers of such materials.

The conference also noted the absence of any regulatory body to check the price and quality of housing, and suggested this was something the government should tackle urgently.

Civil society wants antiretrovirals for all

The Mozambican network of Organizations Against AIDS (MONASO), on 18 May called for speeding up the distribution of the life prolonging antiretroviral (ARV) drugs to HIV-positive people, particularly in the rural areas.

It is estimated that there are about 1.4 million Mozambicans living with HIV, of whom perhaps 350,000 are in need of ARV treatment. But so far only about 17,500 are receiving it.

The coordinator of the Movement for Access to Treatment in Mozambique (MATRAM), Cesar Mufanequico, said these figures clearly show that the country is still far from meeting the targets established for 2010 in terms of treatment. These targets were agreed by governments in 2001 at the special session of the United Nations dedicated to HIV/AIDS.

"Access to treatment is one of the major concerns of the people infected and affected by HIV/AIDS, most of whom do not have the money to pay for the necessary health care and drugs. The shortage of infrastructures and the government's lack of capacity to decentralize these services to the more remote districts, are among the constraints that impede meeting the targets", he said.

He also noted that HIV testing services are available only in health units at central and provincial level, and should be more evenly distributed so that one can know who "is eligible to receive ARV treatment".

By June 2005 Mozambique had 30 units for the distribution of ARV, and MONASO called upon the government to honour its pledge of working towards providing ARV treatment to all those in need.

ARV treatment in Mozambique is being distributed by some national and foreign NGOs, notably the Italian Sant'Egidio Community. Through its "DREAM" programme that began in 2002 Sant'Egidio now operates, within the public health service, 12 centres for free distribution of ARV drugs, catering for about 4,000 patients across the country.

US invests in tourism

The American government, through the United States Agency for International Development (USAID), has granted $5.5 million for the development of tourism in the northern provinces of Nampula, Cabo Delgado and Niassa.

This three year long initiative was launched in Pemba, the Cabo Delgado provincial capital, by Tourism Minister Fernando Sumbana on 18 May.

The programme aims at using tourism as "the main tool for environmental preservation and for overall economic development in Mozambique", and at supporting the Tourism Ministry's vision of making Mozambique "the most vibrant tourist destination in Africa".

USAID has committed itself to supporting the development, promotion and marketing of tourism products, thus attracting investments to the country's private sector, and contributing to professional training, and improvement of the tourism sector's policies.

According to the US Embassy, the idea is also to create a "critical mass of international class attractions, such as tourist icons of historic, cultural and natural value in the northern region of the country, including Ibo Island, the Quirimbas archipelago, the pre-historic paintings in Nampula, the creation of a aquatic wildlife reserve in Lake Niassa, and the development of the Pemba Bay".

USAID adds that by strongly encouraging the private sector, the programme will create conditions for the emergence of regional and provincial forums, that will bring together the tourism and public sectors, community leaders and NGOs, who may share knowledge and experiences to make the northern region of Mozambique a competitive tourist destination of international class.

Tobacco giant withdraws from Mozambique

The tobacco giant Alliance One is pulling out of Mozambique in 2007. Alliance One was formed out of a merger between the US-based companies Dimon and Stancom, both of whom held concessions in the provinces of Niassa, Tete and Manica. They provided peasant tobacco growers with inputs, and purchased their crop.

The reason for the decision to withdraw is that the most productive tobacco concession, in the Tete district of Chifunde was taken from Dimon in 2005, and given instead to Mozambique Leaf Tobacco (MLT), a subsidiary of the US Universal Leaf Africa Company. This was because the government wants tobacco processing to happen in Mozambique, and so urged the concessionary companies to build processing plants. Only MLT responded, and has built the second largest processing plant in Africa in Tete City. Its reward was the Chifunde concession.

Alliance One took the decision to pull out on 16 March: a brief note from Alliance One explained: "the company reviewed its remaining operations without Chifunde district and determined it was not in the company's economic interest to remain in Mozambique without this strategic district. Consequently, after the 2006 crop, for which the company has already made significant commitments, operations within Mozambique will discontinue".

Thus Alliance One will close its three facilities in Mozambique. The company estimated that over 500 of its staff would be affected, and that Alliance One would incur costs of around $6 million, including redundancy payments and "asset impairment".

Coconut palms destroyed

To combat the spread of lethal yellowing disease, about 81,000 infected coconut palms have been destroyed on the orders of agricultural authorities. The disease has threatened to ruin the huge coconut plantations in the southern province of Inhambane and the central province of Zambezia.

The Zambezia Provincial Director of Agriculture, Mariano Jonas, attending a National Meeting of Agricultural Services at Namaacha, on the border with Swaziland, said that since it first appeared in the province, lethal yellowing disease has killed 125,000 palms - resulting in a loss of 625 tonnes of copra.

The disease is continuing to cause damage all along the Zambezia coast. In attempts to prevent further spread of the disease, infected palms are being cut down and new trees, of a Mozambican variety that shows some resistance to lethal yellowing, are being planted.

Jonas said this planting is benefiting 4,000 households in Chinde and Inhassunge districts, where about 20,500 infected palms have been cut down.

Research is continuing into varieties of coconut palm that may prove resistant. 1,800 coconut seeds have been collected in Cabo Delgado, Nampula, Zambezia and Inhambane and their capacity for resistance will be tested. 21 varieties of palm (a total of 7,200 seeds) have been imported from Ivory Coast, and they will be tested to see whether they can tolerate or resist the disease under Mozambican conditions.

To avoid spreading the disease elsewhere, the movement of live palms, and coconut produce from Zambezia has been banned.

New agricultural institutions created

The Mozambican government has created two new institutions to promote the development of agriculture.

One is the Agricultural Promotion Centre (CEPAGRI), described in a note from the Secretariat of the Council of Ministers (Cabinet) as a body that will liaise between the Ministry of Agriculture, and the commercial, productive farming sector.

The main purpose of CEPAGRI, the note says, is to identify "the in-depth problems of this sector in order to allow it to play a greater role in developing strategies to promote agro- business and agro-industry".

The second body, the Agricultural Development Fund (FDA), is a merger of two existing funds, the Agricultural Promotion Fund (FFA), and the Fund for the Development of Agricultural Water Use (FDHA).

This merger, the note says, is intended to rationalise resources, in order to support agricultural development and assist producers.

Malaysia to help develop "smart card"

The Malaysian government has pledged to help the Mozambican authorities develop a "Smart Card", which will allow Mozambican citizens to have all their key documentation on the same electronic card.

To this end, Mozambique's Minister of Science and Technology, Venancio Massingue, on 24 May signed an agreement in Maputo with the Malaysian Deputy Minister of Science, Technology and Innovation, Dato Kong Cho Ha, who is on a three day visit to Mozambique.

"Once the smart card strategy is implemented, any Mozambican can have documents such as his identity card, passport and driving licence, among others, on the same card", said Massingue.

He said this understanding resulted from contacts last November between President Armando Guebuza and Malaysian Prime Minister Abdullah Badawi, during a "Smart Partnership" forum in Lesotho, at which the leaders agreed their countries should cooperate in the technology area.

The visit by the Malaysian delegation seeks to identify specific areas of cooperation, particularly in applications of information and communication technologies.

Massingue added that Malaysia has pledged to assist the Mozambican authorities' "e-government" strategy, particularly in areas such as land management, and the management of the financial system.


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

email: Mozambique News Agency

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