Mozambique News Agency

AIM Reports


No.360, 10th June 2008


Flour mills opening throughout countryside

President Armando Guebuza, drawing up a balance sheet of his recent visit to the northern province of Cabo Delgado, told reporters that the most visible result of the Local Initiative Development Fund is that flour mills are now appearing throughout the countryside. Under this fund, each district receives annually at least seven million meticais ($290,000) from the state budget for initiatives intended to increase food production and generate jobs. The money is supposed to be lent to businesses and individuals with viable projects: repayment of these loans will produce a revolving fund that can be continually invested in district development.

The increase in the number of small flour mills, President Guebuza said, meant that peasant farmers did not have such long distances to travel to mill their maize, and the time they saved could be used in other activities.

He was also impressed by the increase in the number of small brick factories, producing construction materials that can be used to build better homes that are more resistant to heavy rains and high winds.

President Guebuza stated that the fund had also stimulated the rise in the number of associations of peasants producing rice, vegetables and cotton. But the President warned against imagining that handing over seven million meticais to each of the 128 districts would solve all problems. It might solve an immediate problem of shortage of funds for development, but other challenges soon arose – such as the need to train those who receive the money in business management.

“We have insisted on the need to train the people who ask for loans”, said President Guebuza. “This is our current challenge”. Such training was needed to ensure that the beneficiaries would be able to repay the interest-free loans.

Asked whether the state would recover the old state farms as a way of contributing to a Mozambican green revolution, President Guebuza said that running farms was not the state’s job. Instead the state “takes responsibility for creating a healthy environment so that agricultural production occurs”. It would encourage producers, including the commercial farming sector, and was concerned to train the necessary high level specialists who could play a key role in increasing production.

High Commissioner apologises for attacks

The South African High Commissioner to Mozambique, Thandi Lujabe-Rankoe, on 4 June officially apologised for the anti-foreigner pogroms in South Africa which have left 62 people, about half of them Mozambicans, dead, and have driven tens of thousands from their homes.

As she delivered a donation to the government’s relief agency, the National Disasters Management Institute (INGC), intended for the Mozambican victims of the mob violence, Lujabe-Rankoe said “there is so much sorrow for what has happened. We offer our sincere apologies”.

She recognised that Mozambicans have lived and worked in South Africa since before she was born, and those who were defending the interests of a tiny handful of people would not be able to change that situation. “We won wars in favour of the unity of our peoples, and today we have opened the borders so that the peoples of the two countries can circulate freely”, she said. “Our enemies are not happy about this. They want to separate us”.

Lujabe-Rankoe said she was confident that the situation in her country will return to normal, thus allowing the Mozambicans who have fled across the border to return to South Africa.

According to INGC national director, Joao Ribeiro, to date about 37,000 Mozambicans have fled.

The government set up a transit centre on the outskirts of Maputo that can hold 2,000 people, but the most that stayed there at any one time was 400.

Partners pledge more budget support but raise concern over corruption

The 19 donors and funding agencies who support the Mozambican state budget on 22 May pledged a total of $774.3 million for 2009 – but two donors, Sweden and Switzerland, have reduced their aid because of fears of corruption and poor governance.

The 19 countries and agencies are known as the “Programme Aid Partners”, or G-19, and on 22 June they all delivered letters to the Mozambican government with their pledges for 2009. The group includes the World Bank, the African Development Bank, the European Commission, most EU member states, Canada, Norway and Switzerland.

The direct budget support promised amounts to $445.2 million compared with $383.8 million pledged for this year. In addition, $329.1 million is promised for sector programmes and common funds (such as PROAGRI in Agriculture and PROSAUDE in Health). This is a substantial increase on the $241 million promised for 2008.

However, these increases are nowhere near as large as they look, due to the weakness of the dollar. Most of the partners give aid in Euros or other European currencies that have appreciated considerably against the dollar over the past year.

In dollar terms, both Sweden and Switzerland have increased their budget support. But when expressed in their own currencies, these two countries have reduced their budget support in protest at the Mozambican government’s failure to deal with corruption.

At the ceremony announcing the 2009 aid, the current chairperson of the Programme Aid Partners, Irish Ambassador Frank Sheridan, said that the government’s performance last year was regarded as sufficiently satisfactory for the G-19 to continue their direct budget support. However, budget support was not being expanded, nor was support to projects and programmes being converted into budget support.

Any apparent expansion, apart from exchange rate illusions, was because “the donors are complying with bilateral undertakings given in their multi-year agreements and strategies”, said Sheridan,

He sent a very clear message to the government, stating “one reason for the low rate of expansion of direct budget support concerns serious disquiet about performance in the area of governance, particularly the lack of substantive indications of progress in the fight against corruption”.

On the positive side, Sheridan said the donors praised the efforts made by the government to deal with natural disasters, particularly the way the government had used its own budget and its own forces to cope with the crisis.

The G-19 was also appreciative of the efforts made in public finance, taxation and in macroeconomic management in general. So “substantial support” would be maintained for SISTAFE (the State Financial Management System) and for the tax authority.

There had also been “considerable progress” in social areas, notably in reducing gender disparities in education. But in health care, there were concerns about the continued spread of HIV/AIDS, and the apparent inability of the National AIDS Council (CNCS) to spend its budget.

Strong economic growth continued in 2007, said Sheridan, with an increase in GDP of over seven per cent. Nonetheless there was continued concern that this growth was not benefiting the poorest strata of society. In practice, there was “a lack of effective support with impact on the productivity, sales and income of peasant families”.

Receiving the G19 pledges, the Minister of Planning and Development, Aiuba Cuereneia, promised that the government would use resources granted in a rational manner. He added that donors should align their activities to the government’s systems, and reduce the costs of managing international aid, in terms of the time and work demanded of the government.

Only four of the G-19 (Austria, Germany, Ireland and Spain) are increasing budget support when expressed in Euros rather than dollars. 13 of the group are keeping their support at much the same level as in 2008, and two are reducing it.

The largest pledges to the 2009 budget come from Britain ($81.6 million), the World Bank ($70 million), and the European Commission ($66.7 million).

IFAD promises more support to agriculture

The President of the International Fund for Agricultural Development (IFAD), Lennart Bage, guaranteed in Maputo on 22 May that his institution, together with its cooperation partners, will step up its credit portfolio to finance projects to fight against hunger in Mozambique.

Bage was speaking shortly after a meeting with Prime Minister Luisa Diogo, where they discussed issues related to ongoing projects.

Bage told reporters that IFAD has been operating in Mozambique since 1983. During that time it has disbursed $143.9 million in loans to finance nine programmes to help fight against rural poverty, and to ensure agricultural rehabilitation and food security.

More recently, it has been supporting specific programmes in rural development, fisheries, livestock, market linkages, and rural financial services.

The main points of the IFAD strategy in Mozambique include increasing income in rural areas through greater productivity of cash crops, support for organizations of small-scale producers, support for women and young people, and strengthening cooperation between donors and the government.

Bage said that in its plans for its three yearly replenishment, IFAD is raising $6 billion for the global fund, of which three billion will be from its own funds, and the other half from cooperation partners.

Cashew production exceeds target

Mozambique produced 95,000 tonnes of cashew nuts in the 2007/2008 harvest, surpassing the target of 85,000 tonnes.

According to the director of the government’s Cashew Promotion Institute (INCAJU), Filomena Maiopue, the production in the latest campaign was “very good and is an indication that, thanks to our efforts, this cash crop is recovering, after a number of years when it was in decline”.

Maiopue told AIM that of the 95,000 tonnes, 32,000 were exported raw, mainly to the Indian market, and the remaining nuts are being processed internally in both the formal and informal sectors.

She put the average price earned by exports of raw cashew nuts at $750 a tonne, a dramatic increase, given that over the previous three years the maximum price for a tonne of the nuts was no more than $500.

Official statistics show that exports in the cashew sector (both the raw nuts and the processed kernels from Mozambican factories) yielded $40 million in 2007, which was a decline when compared with 2005, when the sector earned $48.5 million.

For the 2008/09 campaign plans are to produce 95,000 tonnes. Maiopue explained that in some districts in the northern province of Nampula, the major cashew producing area, work has already started on treating the trees against oidio (the fungus that causes powdery mildew and sharply reduces yields) and there is an ongoing awareness campaign among the residents to treat their plantations.

Maiopue added that two cashew processing factories that had been damaged by cyclone Jokwe when it hit the Nampula coastal region in March have been rebuilt and are now fully operational.

Ten per cent of hydrocarbon company sold

The Mozambican Stock Exchange (BVM) announced on 4 June that it has successfully sold ten per cent of the shares in the publicly owned Mozambican Hydrocarbon Company (CMH), raising a total equivalent to around $6.7 million.

CMH is a company set up in October 2006, as the vehicle for Mozambican participation in the exploitation and processing of natural gas at Temane, in the southern province of Inhambane. CMH is thus the Mozambican partner of the South African petro-chemical giant SASOL, which has the rights to the Inhambane gas fields. A condition of the deal with SASOL was always that Mozambicans would have the right to participation of up to 25 per cent.

Under the initial shareholding structure, 80 per cent of CMH was owned by the public National Hydrocarbon Company (ENH), and the remaining 20 per cent by the Mozambican state. But from 19 to 30 May 10 per cent of the company was sold on the stock exchange, bringing ENH’s holding down to 70 per cent.

In all, 593,412 shares were sold, each with a nominal value of 275 meticais (about $11.4). The minimum purchase was ten shares – representing an outlay of 2,750 meticais.

Demand for the shares greatly exceeded supply. 1,179 individuals applied to purchase 512,010 shares, while 51 companies and other institutions requested 685,470 shares.

A small number of applicants were excluded, and after an operation to allocate the available CMH shares proportionately, 1,173 individuals could buy 296,700 shares, and 49 institutions acquired 296,712 shares.

BVM chairperson Jussub Nurmamade described the response to the public share offer as “satisfactory” and as showing “increased confidence in investing in the stock exchange”. The shares can now be bought and sold on the BVM, and it is expected that they will yield dividends.

$8 million stolen from social security fund

The Labour Ministry puts at $8 million the amount stolen by high ranking officials in the National Social Security Institute (INSS) between 2002 and 2008. This was one of the findings of a commission of enquiry set up by Labour Minister Helena Taipo following denunciations of serious irregularities at the INSS.

During the investigations, the head of the commission, the National Director of Planning and Statistics in the Ministry, Paulino Muthombene, found that the former INSS directorate repeatedly breached norms concerning procurement and the awarding of contracts.

Giving the findings of his commission at a press conference on 2 June, Muthombene said the fraudulent operation had been headed by the former INSS Director of Management and Assets, Dulcinio Loforte. In what Muthombene described as “smart corruption” Loforte and his accomplices used over-invoicing, double payments, the charging of illicit commissions, and manipulation of tenders.

The looting of the INSS, in Muthombene’s view, justified the direct intervention of Taipo, who sacked the INSS general director Abilio Mussane, after he flatly disobeyed her instructions to suspend Loforte while he was investigated. Both Mussane and the head of the INSS computer department are now under investigation by the Criminal Investigation Police.

Japan to finance Nampula-Cuamba road

The Japanese government will finance the complete rehabilitation and tarring of the 400 kilometre long road between the northern Mozambican cities of Nampula and Cuamba, President Armando Guebuza announced on 30 June. He was speaking to Mozambican journalists shortly after the end of the fourth Japan-Africa summit (TICAD IV) in the Japanese city of Yokohama.

President Guebuza said that the money to finance the road will come from the $4 billion, which Japanese Prime Minister Yasuo Fakuda announced that Japan will provide to African countries in grants and soft loans over the next five years.

Mozambique will also benefit, together with Zambia, from Japanese support for electrification in these two member states of the Southern African Development Community (SADC), the cost of which is estimated at $760 million.

President Guebuza declared that he was very pleased by the willingness shown by the Japanese authorities to support the development of Africa. “The experience I have with the Japanese”, he added, “is that when they make a promise, they always honour it”.

He added that Japan had the merit of being the first developed country to break the habit of distrusting Africa, and opted to set up a forum to study, together with African leaders, the best ways of supporting the development of the continent. Japan took that decision 15 years ago, in 1993, recalled President Guebuza, when it was fashionable to speak disparagingly of Africa, even among the multilateral institutions that deal closely with African governments.

“That’s why I think that what is most important is not just the money that Japan has promised to channel towards our development, but this growing understanding of Africa that is now being cemented”, said President Guebuza.

He noted that all the delegates to TICAD IV, whether they came from Africa, or from the developed world, stressed that more support should be given to the African continent. This gave him hope that the world now understands Africa, after decades of misunderstandings that had inhibited investment.

President Guebuza said that SADC leaders in Yokohama took advantage of the summit to discuss other pressing problems of southern Africa, notably the crisis in Zimbabwe, though he revealed no details of these discussions.

Dondo-Marromeu railway rebuilt

The reconstruction of the 265-kilometre railway between the towns of Dondo and Marromeu, in the central province of Sofala, has been completed. This line is a spur off the Sena railway that runs from Beira to the Moatize coalmines in the western province of Tete, and was rebuilt as part of the overall effort to reconstruct the Sena line, as a crucial component in the economy of central Mozambique.

The line is to be handed over for official reopening before the end of this June, after completing the repair of two culverts on the final stretch of the railway between Inhaminga and Marromeu.

This line will be used mainly to transport the sugar produced at Marromeu for export through the port of Beira, limestone from Muanza to the cement factory in Dondo, and timber from Cheringoma.

Health system could treat more HIV victims

Over 100,000 HIV-positive Mozambicans are currently receiving the life-prolonging anti-retroviral (ARV) therapy. However, according to Health Minister Ivo Garrido the national health service has sufficient spare capacity to provide ARV drugs to many more people.

Speaking at a Maputo press conference, Garrido said that the figures as of the end of April showed that 101,198 Mozambicans were receiving ARV. Over a quarter of those (27,406) are in Maputo.

He added that many more people need ARV treatment. They are not being turned away – they have simply not come forward, and many are unaware that they are carrying a potentially lethal virus.

To those who blamed the health service for this, Garrido retorted “I would like them to show me some sick person who went to a health centre and was denied anti-retroviral treatment”.

The reality was that many Mozambicans are in an advanced stage of AIDS, but do not visit the health units. “This is a problem that concerns the Health Ministry”, stressed Garrido.

No figure could be put on the number of people who need ARV treatment and are not receiving it – but Garrido noted “every day people arrive in a very weakened condition because they did not go to the hospitals in good time”.

Garrido declared that the only way to minimize this problem is for more people to take HIV tests.



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


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