Mozambique News Agency

AIM Reports


No.359, 22nd May 2008


President Guebuza welcomed by Chilean exiles

Hundreds of Chileans who sought asylum in Mozambique during the dark days of the military dictatorship of Augusto Pinochet have not forgotten their adopted homeland, but turned out en masse to welcome President Armando Guebuza on 9 May, as he concluded his three day official visit to Chile. The meeting between President Guebuza’s delegation and the former exiles turned into a party, with the Chileans showing that they still remember the Mozambican revolutionary songs they learnt in the late 1970s and early 1980s.

The sumptuous Chilean restaurant in which this reception was held resounded to the rhythms of African songs and dances – but performed by those Chileans who had found a warm welcome in newly independent Mozambique after they were forced to flee from their homeland.

Links forged then still bind tight. AIM spoke to one couple who lived in Mozambique, and whose two daughters both married Mozambicans. The couple returned to Mozambique a few months ago to see their four Mozambican grandchildren. "Now I have merged the two countries and live in both of them spiritually", remarked this elderly Chilean.

Others at the party were born in Mozambique, and spent their childhood there. Boriana, who left Mozambique when she was eight years old, told AIM that, although she is now 27, she still feels more Mozambican than Chilean, and is considering returning to Mozambique.

Briefing the Mozambican journalists who accompanied this visit, President Guebuza said that the visit had certainly been worthwhile, judging by the emotions displayed by the Chileans he had met, including the country’s leadership. He thought everything indicated that the four social and economic cooperation agreements signed during the visit would not become dead letters.

President speaks to diplomats

On 8 May President Guebuza warned that the impact of the recent sharp rises in the world market prices of oil and of grain makes it imperative to find a solution rapidly.

Giving a lecture at the Chilean Diplomatic Academy in Santiago, President Guebuza said that counter-measures should be taken more quickly than the speed with which fuel and food prices were rising. The cost of not moving quickly would be that some countries could face social, political and economic collapse.

He pointed to the blows the price rises represent for people already living on extremely low incomes. Measures must be taken speedily, he insisted, in order to avoid the worst, which would be the collapse of gains won by humanity over many years of hard work.

Diplomats of the entire world needed to come together and seek solutions that would put an immediate brake on the soaring price of oil, and of basic foodstuffs such as rice, maize and wheat.

Instead of panicking, diplomats and other experts should, as they had done in the past when faced with other catastrophic emergencies, show their skills, work in a pro-active fashion, and draw up possible solutions. Such crises should "catalyse the human imagination", and lead it to counter-attack in the search for alternatives.

No one should imagine, President Guebuza warned, that these problems only affected some countries. Every part of the world is affected, he stressed, since the impact of huge price rises was creating "universal shocks".

"This is a collective challenge for the international community", he said. "Given the growing interdependence between states, there are no moral arguments, no physical barriers, and no force of arms that can defend islands of prosperity and well-being, surrounded by poverty in all its multiple expressions".

"Hunger, disease, shortages of essential goods, and uncertainty about tomorrow generate frustration, despair and hatred", President Guebuza said. "Above all, as a result of this state of spirit, the conditions arise for factors to flourish that can destabilize states".

The price rises, he added, made it urgent to take seriously the eighth of the Millennium Development Goals approved by the United Nations at its Millennium Summit in 2000. That goal is "To develop a global partnership for development". This was needed more than ever, said the Mozambican leader, because "we are faced with a global problem and dealing with it requires the adoption of global solutions".

Mozambicans flee xenophobic violence

The Mozambican government on 22 May decreed a situation of emergency to cope with the crisis caused by the exodus of thousands of Mozambican citizens from South Africa, fleeing the wave of murderous violence unleashed against immigrants.

Foreign Minister Oldemiro Baloi told reporters after a meeting of the Cabinet, called to discuss the violence in South Africa, that the government has decided to activate the National Emergency Operations Centre (CENOE). The last time CENOE was activated was for the floods in the Zambezi Valley in January and February

CENOE is the operational wing of the government's relief agency, the National Disasters Management Institute (INGC), through which the INGC provides support to the victims of disasters.

Baloi confirmed the arrival on 22 May of 620 Mozambicans in 10 buses. These are citizens who had lost all their possessions, and had watched helplessly as mobs burnt down their homes. The Mozambican consulate in Johannesburg accommodated them in tents, while arranging transport to take them across the border.

They join an estimated 10,000 other Mozambicans who did not wait for the consulate to organise transport but fled from South Africa using their own resources.

At least 40 foreigners have been murdered in this bout of violence. Baloi said at least five are known to be Mozambicans. He said the government is in contact with South African agencies to make funeral arrangements.

The Minister said the government was unable to provide detailed statistics about the returnees since most of them, traumatized by the violence they had suffered or witnessed, preferred to make their way, as quickly as possible, to their provinces and villages of origin.

The exodus will worsen. Baloi said that thousands of Mozambicans are in temporary accommodation centres in South Africa awaiting transport. He believed that many of them would need both material and psychological support.

He said the government intends to provide immediate support for these destitute returnees, but must then deal with the long-term consequences. For once the crisis has died down some will wish to go back to South Africa, while others will need help in resettling in Mozambique.

Most of the 50,000 or so Mozambicans who work in the South African gold mines, and whose remittances make an important contribution to the Mozambican economy, seem to be in no immediate danger. Baloi said the mining industry remains generally calm: incidents were reported in only two mines, but were quickly brought under control.

Baloi stressed that Mozambique's relations with South Africa remain good, including in "harmonizing position to solve various problems in the fight against poverty. What is important for us is to face the question calmly to avoid any acts of retaliation, which could have serious consequences".
Contacts were under way between the two governments, and Baloi thought that the decision by South African President Thabo Mbeki to send the army into the townships showed that there was the political will to end the violence.

President hears complaints of tribalism

President Armando Guebuza on 21 May declared that the great secret of success in the struggle against hunger and poverty would be the unity of all Mozambicans, regardless of their ethnic origins, just as this had been key for victory over Portuguese colonialism.

President Guebuza was speaking at a rally in the town of Balama, in the northern province of Cabo Delgado, after citizens had complained of tribalism among the local political leadership.

One local resident, named Candido, told President Guebuza that tribal criteria had been used in allocating the fund for local initiatives (a fund of at least seven million meticais – about $280,000 – from the state budget granted to each of the 128 districts for projects that will increase food production and create jobs). He also alleged that anyone applying for money from this fund had to pay 600 meticais ($24) first. "I don’t understand why they’re charging us this money", Candido said.

He claimed that tribalism was also to be found in the appointment to leadership positions in Balama, and that the District Consultative Council was nothing more than "a club of friends", whose members had been appointed without any consultation with the local population.

Candido claimed that no only was the district administrator from the neighbouring province of Nampula, but so were most of the other members of the district government.

Another citizen, Jose Mamudo, took the floor to declare "it’s not worth lying to the President, telling him that everything’s fine in Balama. We have to tell him the reality about what’s going on". Mamudo accused members of the police of stopping citizens on the streets for no good reason and extorting money from them. He also claimed that the concessionary companies that purchase cotton from peasant producers "swindle them" – which was why peasant were switching their efforts away from cotton to maize, groundnuts and sunflower.

In response, President Guebuza stressed that people who take tribalist attitudes "are wasting their time", and that tribalism "in no way helps us to fight against hunger and poverty". He stressed that without national unity Mozambicans would have found it much more difficult to defeat colonialism and achieve their independence. He also stressed that people should always feel free to speak their minds about the problems they face, and no one should feel intimidated.

Turning to the international food crisis, President Guebuza declared that the solution must be to increase Mozambique’s own food production. "Food is expensive and scarce", he said. "Unfortunately we are continuing to buy this food on the international market, even though we have sufficient land to produce for ourselves and even to export food".

ADB approves fertiliser scheme

The annual meeting of the governors of the African Development Bank (ADB), held in Maputo on 14 and 15 May, approved the creation of an African Fertiliser Facility, which will make fertilizer available to African farmers at affordable prices.

The decision was not unanimous. The chairperson of the ADB Board of Governors, Mozambique’s Planning and Development Minister Aiuba Cuereneia, told reporters that the United States was opposed to the fertilizer facility, "but the Board of Directors voted for it".

"We are now seeing international organisations talking about subsidizing agriculture", said Cuereneia. "This used to be taboo, but now it is being accepted. You can’t manage agriculture commercially without subsidies".

At a closing press conference the ADB President, Donald Kaberuka, noted that African agriculture used to suffer from low producer prices, and farmers had little incentive to produce. Now, with the sharp rise in grain prices internationally, there were incentives – but fertilizer prices had also soared.

"For the signals to reach the farmers, something has to be done", said Kaberuka. "There must be some degree of fertilizer subsidy". Such subsidies should be "market-smart" and targeted, and they would require support from international institutions.

He recognised that fertilizers are not enough, "infrastructures must be working – the roads and the irrigation system ".

Kaberuka also insisted that gender issues must be factored into the approach to agriculture, "If we are to succeed, we must bias policy towards Africa’s women farmers, who are the majority of the continent’s farmers", he said. "Poverty has a woman’s face".

"The time has come for African agriculture to become a viable business", he stressed, "and it is thus very important that we allow markets to function". He insisted that food security was not a problem that could be solved by protectionist measures, and so called on those countries that have imposed bans on grain exports "to allow the markets to work".

But they would not work by relying on the private sector alone, and Kaberuka repeated his call "to rebuild Africa’s Ministries of Agriculture", which were crucial for planning and coordination. But he insisted that the ADB had no intention of dictating how a green revolution in Africa should be run.

The ADB governors also approved the report "Investing in Africa’s Future: the ADB in the 21st Century", produced by a high level panel, co-chaired by former Mozambican President Joaquim Chissano and former Canadian Prime Minister Paul Martin. This report, said Cuereneia, contained recommendations "to make the Bank more African, and to become the chief financial adviser to countries for their development".

Support for Mozambique

In Mozambique the ADB has granted $140 million to be used in the agricultural sector during the two year period, 2009-2010. Development Minister Cuereneia told reporters on 19 May that this money would strengthen the government's financial capacity to face the food crisis affecting many countries across the world.

Cuereneia added that "this is a matter of priority because, faced with the world food crisis, we have to get the resources somewhere. In order not to cut resources from other sectors we will continue seeking resources outside, and this ADB financing is one of them".

The ADB has promised that it will allocate to the agricultural sector 20 per cent of its investment funds. The institution is currently committed to allocating $3.8 billion to this sector, representing an increase by $1 billion.

Over the past 30 years, ADB loans to Mozambique have amounted to $1.2 billion.

Child and maternal mortality rates drop

Mozambique’s infant, under-five and maternal mortality rates have all declined in recent years, but still remain alarmingly high.

Launching the "Road Map" on how to reduce these mortality rates on 14 May, the national director of health promotion, Mouzinho Saide, told reporters that, between 1997 and 2003, the under-five mortality rate had fallen by 18 per cent, from 219 to 178 deaths per 1,000 live births.

Over the same period, infant mortality (deaths within the first year of life) fell by 15 per cent, from 147 to 125 per 1,000 live births. Saide put the current maternal mortality rate at 408 per 100,000 live births.

The Road Map seeks to speed up efforts to achieve the two Millennium Development Goals in this area - to reduce under-five mortality by two thirds and maternal mortality by three quarters between 1990 and 2015.

To achieve these goals the government promises to strengthen the capacity to improve mother and child health, and will attempt to guarantee that all women have access to qualified medical care during pregnancy, childbirth, and the neo-natal and post-natal periods.

Health Minister Ivo Garrido, who chaired the launch ceremony, declared that infant mortality remains an emergency in Africa. He recalled that earlier this year President Guebuza launched an initiative on mother and child care to bring down the mortality rates.

The road Map enjoys the support of UN agencies such as the World Health Organisation (WHO), and the United Nations Fund for Population Activities.

Former Renamo General Secretary dies

Joao Alexandre, a member of the standing commission of the Assembly of the Republic who was once general secretary of Renamo, died of a heart attack in Maputo on 11 May.

Alexandre had been a member of parliament for Renamo, elected from the central province of Manica, since the first multi-party elections of October 1994. He was elected to the Standing Commission, the assembly’s governing board, in 2005.

Renamo leader Afonso Dhlakama appointed Alexandre the party’s general secretary in January 1998, and he held the post for about two years. He was the first Renamo general secretary who had not taken part in the war of destabilisation.

The 60-year-old Alexandre was also a member of the Renamo Political Commission.

Economic report looks at mega-projects

While the Mozambican economy has shown "impressive growth" in recent years, it remains driven mainly by aid inflows, and mega-projects that provide little in the way of direct employment or tax revenue. This is the assessment of Mozambique given in the latest edition of the "African Economic Outlook" published by the African Development Bank (ADB), the United Nations Economic Commission for Africa (ECA), and the Organization for Economic Cooperation and Development (OECD).

"Concerns about the limited job creation capacity of mega-projects lingers", remarks the Mozambique chapter of the report. "The capital intensive nature of these projects pushes up demand for skilled labour, doing little to absorb the surplus of unskilled labour".

Mega-projects such as the MOZAL aluminium smelter on the outskirts of Maputo received very generous tax incentives from the Mozambican government. The report admits that negotiating with multinational corporations is a challenge, and suggests that Mozambique "may not have secured the most favourable terms" in its dealings with MOZAL.

The report notes that the government has taken criticisms of the mega-project strategy seriously "and is now setting tougher conditions for new foreign investment projects".

The report’s authors believe the government should, and can, collect more taxes. "More should be done to mobilise tax revenues", they urge, "especially from mega-projects, in order to reduce dependence on foreign aid, which currently finances more than 50 per cent of the budget".

"It is particularly important to strengthen fiscal transparency in light of the number of large investment projects and concessions in the pipeline", the report adds. Furthermore, foreign aid is expected to decline from 14.2 per cent of GDP in 2008 to 12 per cent in 2010 – additional tax revenue is thus crucial to compensate for the forecast decline in aid, as well as the falling customs revenue that is the inevitable result of the SADC (Southern African Development Community) Free Trade Area that took effect in January.

The report puts Mozambique’s total debt servicing in 2007 at $54 million. But two thirds of this is domestic debt. The foreign debt has been slashed, due to Mozambique’s successful completion of the two stages of the HIPC (Heavily Indebted Poor Countries) initiative, and the benefits of the Multilateral Debt Relief Initiative (MDRI). Foreign debt service fell from two per cent of GDP in 2005 to around 1.1 per cent in 2007.

But the gains from HIPC and MDRI have been compromised by rising levels of domestic debt (which cannot be rescheduled or cancelled), much of which arose from the need to rescue the two privatised banks, the BCM and Austral, which were looted between 1996 and 2001.

As for the balance of trade, this worsened in 2007, "reflecting the high oil import bill and the deterioration of the performance of traditional exports". The latter, the report claims, was caused mainly by the poaching of Mozambique’s prawn resources by illegal foreign fishing vessels.

Exports were overwhelmingly dominated by the products of three mega-projects – aluminium from MOZAL, natural gas from the plant operated by the South African petrochemical giant SASOL in Inhambane province, and electricity from the Cahora Bassa dam.

The report warns of a likely further deterioration in the trade balance, as oil prices continue to rise, while aluminium prices are predicted to fall.

The report also notes the success of the Mozambican sugar industry. The area under sugar cane cultivation is rapidly expanding, and the four sugar mills are expected to produce 273,000 tonnes of sugar in 2008, an increase of 36.2 per cent on last year’s figure. But it adds the caveat that Mozambique’s sugar mills "are small compared with those of the world’s major sugar exporting countries, translating into higher milling costs. In addition, Mozambican competitiveness is hampered by poor transport links and lack of sugar storage and loading facilities at the port of Beira".

While acknowledged the sharp drop in poverty (by 22 percentage points) between 1997 and 2003, the report warns that since then "poverty reduction has apparently stalled, with some sectors and regions not benefiting from good economic performance".

Turning to the political context, the report believes that President Armando Guebuza’s appointment of Augusto Paulino as Attorney General in August 2007 "sent a strong signal" of his commitment to the fight against corruption. This is because of Paulino’s outstanding role in the fight against organised crime, shown in his jailing of the business figures found guilty of the murder of investigative journalist Carlos Cardoso in November 2000. Nonetheless, the report notes concern "that the government’s anti-corruption strategy has delivered too few visible results" – noting in particular "irregularity in the publication of data about the fight against corruption, and the lack of trials of corruption cases in 2006 and 2007".



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


email: Mozambique News Agency

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