Mozambique News Agency


No.222, 2nd January 2002


Contents


President Chissano calls for hard work in 2002

President Joaquim Chissano has called on the nation to work hard to create wealth in 2002. In his end of year message, President Chissano remarked "we have talked a lot about jobs, but we don't talk much about work, or about productive employment. In 2002, I call on all of us to talk about work". "We all want the distribution of wealth. We want our problems solved. We want more roads, more food, more education for our children", he continued. "But there cannot be wealth to distribute without work. And work is not merely being employed to earn a wage".

"We cannot fill up the cities doing nothing for months and years waiting for jobs, and abandoning the countryside which calls out for our intelligence and our labour so that it can be turned into wealth", he stressed.

President Chissano added that work did not just mean turning up at the office on time, staying there for eight hours and going home again. He urged those employed in both the state and the private sector "to carry out your tasks to the full, using every minute intended for work to produce more and better. We should not be content just to show our faces at our jobs - we must be concerned with good results from our work".

"Only with good results, higher productivity, greater production, better quality of goods and services, can we improve our living conditions", the President said.

In 2001, Mozambicans "were able to face with courage and wisdom the various challenges confronting our country", said the President. "We cannot give up in the face of difficulties. Next year, with foresight and determination, we shall also be able to overcome difficulties. The secret lies in unity and solidarity".

"There is space for everyone", Chissano insisted. "We must hold out our hands to each other, and support ourselves mutually. Nobody should be excluded".


Electrification of district capitals

Electrification of all 133 of Mozambique's districts could be complete by the end of 2003, a year ahead of schedule, according to the Minister of Mineral Resources and Energy, Castigo Langa.

Cited in "Noticias" on 27 December, Langa said work on electrifying these small towns had progressed better than expected, despite the floods which struck parts of the country in February 2000, and again in early 2001.

The Minister was optimistic that, if those involved in rural electrification continue to work well, then all the district capitals will have electricity, not by late 2004, as initially planned, but by late 2003.


Tender for mobile phone operators fails

The Mozambican government has rejected all three bids made in response to the international tender, launched in October, for the allocation of two new mobile phone licences.

At a press conference on 28 December, the Minister of Transport and Communications, Tomas Salomao, said that none of the three bids met the tender's technical requirements: thus the three were all rejected on grounds of technical quality, and the financial side of the bids was not even considered.

The three companies were the US-based Telecom-Africa, and two other little-known enterprises, Econat and Fili Modern Nex Sport.


Top police officers sacked

President Joaquim Chissano has sacked the country's two most senior police officers. A press release from the President's office received by AIM on 18 December announced that President Chissano had dismissed the General Commander of the police, Pascoal Ronda, and police chief of staff, Benedito Zinocacassa.

The new commander of the police force is Miguel dos Santos, who was previously the director of public order and security in the police command.

His deputy (who has been given the title Deputy General Commander rather than chief of staff) is Jorge Khalau, who was formerly national commander of the riot police.

Both dos Santos and Khalau are 51 years old, both have spent over 25 years in the police force, and both undertook training in police management in the now defunct German Democratic Republic.


Assembly of the Republic


Growth rate expected to hit 14.8 per cent

The Mozambican government expects growth of 14.8 per cent in the country's Gross Domestic Product (GDP) in 2001, Prime Minister Pascoal Mocumbi told the country's parliament, the Assembly of the Republic, on 18 December.

One factory, the MOZAL aluminium smelter on the outskirts of Maputo, accounts for almost a third of this growth. But even without MOZAL, the growth rate would be around 10.2 per cent, said Prime Minister Mocumbi.

The figures given by the Prime Minister are provisional, as the full data for the last quarter of 2001 are not yet available.

Mocumbi said that, despite the floods in the central provinces in the early months of 2001, agriculture made a strong recovery. Agricultural production declined by about 10 per cent in 2000, but in 2001 it is expected to have grown by 14.2 per cent.

When looked at by sectors, commercial agriculture grew by 11.7 per cent, and peasant household agriculture by 15.5 per cent. The value of fisheries production grew by 10.7 per cent, despite measures by the government to restrict prawn fishing in the Sofala Bank in order to preserve stocks. Mocumbi attributed the growth to improved monitoring of fisheries, and increased quality of fish catches.

Mining production should increase by 20.3 per cent in 2001, reversing the declines of recent years.

There has been a sharp rise in the output of manufacturing industry, which rose by 37.4 per cent. This is overwhelming the result of MOZAL: 2001 was the first year in which MOZAL was operating at full capacity. Without MOZAL, the increase would have been seven per cent.

After a decline of 1.5 per cent in 2000, the transport and communications sector grew by 15.5 per cent in 2001. This was largely due to the full rehabilitation of infrastructures in southern Mozambique, which had been damaged by the floods of February 2000.

Thus movement of trains along the Limpopo railway between Maputo and Zimbabwe was normalised, and the stretches of the main north-south highway that had been washed away were rebuilt.

Intensive reconstruction after the floods of 2000 and 2001, plus a modest housing boom in Maputo, meant that the building industry grew by 8.9 per cent in 2001.

Mocumbi stressed that 67 per cent of state expenditure in 2001 went on the "priority sectors" in the government strategy for reducing absolute poverty - particularly the education and health services.

The number of primary schools in the country rose by seven per cent, and the number of children attending school by 12 per cent. Mocumbi said that almost 10 million school text books were distributed to primary schools during the year.

The health service continued to record results in the vaccination programme that would be the envy of many industrialised countries, let alone developing nations. Vaccination against polio and measles reached 95 per cent of infants, and against tuberculosis 97 per cent.

95 per cent of pregnant women attended at least one ante- natal consultation, 100 per cent of new born children visited a health unit at least once in their first year of life, and 45 per cent of births took place in health units.

The government's exchange rate policy was not so successful. The Mozambican currency, the metical, has devalued this year by over 31 per cent - which is ten percentage points higher than the devaluation of 2000.

Mocumbi stressed that the strong growth in the Mozambican economy occurred despite an unfavourable international context, with the world economy showing strong signs of recession, particularly after the terrorist attacks against New York and Washington of 11 September.

Furthermore, Mozambique's neighbours are in serious trouble. The growth rate in the South African economy was just 2.5 per cent in the first six months of 2001, compared with 3.1 per cent in the same period of 2000. As for the Zimbabwean economy, this shrank by 5.1 per cent in 2000, and the same trend continued this year - with knock-on effects on Mozambican ports and railways, for whom Zimbabwe is a major client.

Economic and social plan for 2002

Turning to 2002, Prime Minister Mocumbi told the Assembly of the Republic that the government's target for economic growth in 2002 is ten per cent.

Introducing the government's Economic and Social Plan for 2002, the Prime Minister said the government also wanted to hold the rate of inflation to between seven and ten per cent: he described low inflation as "the main factor in improving purchasing power and hence the social condition of households".

But it will be an uphill struggle to achieve this inflation target. Inflation for the first 11 months of 2001 was 18.4 per cent: the government target is thus for slashing inflation by half.

The government target for agricultural growth is 10.8 per cent for crop production, and 3.6 per cent for livestock (following two years of livestock decline due to flooding).

There should be a huge rise in the construction sector in 2002: the government projection is for an increase of 132.6 per cent. This is due almost entirely to the expansion of the MOZAL aluminium smelter on the outskirts of Maputo.

MOZAL is doubling its capacity, from 253,000 to 506,000 tonnes of aluminium ingots a year. The total new investment envisaged is about a billion US dollars, and most of the construction will take place next year.

The government envisages continued rapid growth in the education network. The number of schools is set to rise by six per cent in 2002, the number of pupils by 13 per cent, and the number of teachers by 17 per cent.

In health care, the government wants to keep the child vaccination rates (against tuberculosis, measles, polio and hepatitis-B) at 95 per cent or more.

It hopes to raise the number of births in health units from 45 to 50 per cent, and ensure that 90 per cent of pregnant women attend ante-natal consultations.

Mocumbi said that fiscal and budgetary policy for 2002 would be aimed at "promoting private investment, and protecting low income social classes and vulnerable population groups". He promised a sweeping reform of direct taxes, stepped up control over the collection of Value Added Tax (VAT), and a new code on fiscal benefits.

Finance Minister presents 2002 budget

Finance Minister Luis Diogo told the Assembly of the Republic on 18 December that 54 per cent of the state budget for 2002 must be funded by foreign aid. But this is an improvement: around 60 per cent of the 2001 budget was covered by foreign aid.

The total expenditure envisaged in the budget is 27,435 billion meticais (about $1.19 billion). But the state's domestic revenue, mainly from taxes, is estimated at only 11,183 billion meticais - not enough even to cover the recurrent expenditure of 13,005 billion meticais. The deficit before grants is 16,252 billion, most of which will have to be covered by foreign grants and loans.

Diogo said that 66.4 per cent of planned expenditure would be on the "priority sectors" for the struggle against absolute poverty. In the fist place, these are the education and health services: education accounts for 18.6 per cent of the budget, and health (including the struggle against the AIDS epidemic) for 14.9 per cent.

The government's roads programme takes 9.1 per cent of the budget, water supply 8.2 per cent, and "security and public order" (essentially the police force) 5.7 per cent.

One of the most striking aspects of Diogo's presentation was the admission that the state is now spending more on servicing its domestic debts than its foreign ones.

The government has been extremely successful in its fight to cancel the foreign debt. Under the Heavily Indebted Poor Countries (HIPC) debt relief initiative, around three quarters of Mozambique's debt stock has been wiped out, and bilateral agreements, creditor by creditor, are continuing to whittle away the debt.

In 2001, the state budget paid out 244.8 billion meticais in interest on foreign debts. But it paid out 270 billion meticais to service domestic debt. This gap is scheduled to grow much wider next year. The 2002 budget provides for 396.2 billion meticais in interest on the foreign debt, and 692 billion meticais in interest on the domestic one.

The state's domestic debt arises overwhelmingly from the issuing of high interest bearing treasury bonds to rescue two of the country's largest banks, the BCM and Austral, from collapse. The banks were both privatised (the BCM in 1996, and Austral in 1997), but the state maintained a substantial minority shareholding - 49 per cent in the BCM and 40 per cent in Austral.

After three years of disastrous, and possibly criminal, private management, both banks were on the edge of ruin. Letting them collapse was unthinkable, and so the state had to find the money for its share of recapitalising the banks - hence the treasury bonds, and the subsequent interest payments, which will be a burden on the budget for many years to come.

Renamo disruption

Deputies from Renamo tried unsuccessfully to disrupt the debate on the state budget. The two loudest Renamo deputies, Luis Boavida and Jeremias Pondeca, repeatedly claimed that the procedure followed in the debate was improper, because it lumped together two separate laws - the adjustments to the 2001 budget, and the draft 2002 budget.

These two bills, plus the government's Economic and Social Plan for 2002, were being debated together, although voted upon separately. There is nothing unusual about this procedures - it is how the Assembly has always dealt with the budget.

But Pondeca declared "We are faced with three totally separate documents", and so there should be three separate debates.

Boavida claimed that the majority Frelimo Party was trying to bury the amendments to the 2001 budget from public sight (although in fact a few minutes earlier Finance Minister Luisa Diogo was broadcast live on television and radio explaining them in detail).

The budget is always updated at the end of the year, taking into account the devaluation of the Mozambican currency, the metical, and other matters which could not be foreseen when the budget was presented a year earlier.

"Frelimo is stealing from the public treasury to pay for the money it stole from the banks", alleged Boavida, "and you don't want the electorate to know about it. You gentlemen of Frelimo are hurrying to your end".

For Frelimo, Alfredo Gamito pointed out that the methodology for the debate had been proposed the previous day, and nobody had opposed it. "But now we have objections that only seek to hinder our work, to prevent this Assembly from debating key instruments of governance", he said. "Deputies Boavida and Pondeca belong to the backward, the poisonous wing of Renamo".

Budget approved

On 20 December the Assembly approved the budget and plan for 2002, with Frelimo voting en bloc in favour, and most opposition deputies voting against.

The resolution approving the Economic and Social Plan for 2002 passed by 132 votes to 102 with two abstentions. Later in the morning, after one opposition deputy had left the chamber, the state budget for 2002 was approved by 132 votes to 101, also with two abstentions.

In both cases, the abstentions were cast by Rachid Tayob and Jose Lopes, two deputies elected on the ticket of the Renamo-Electoral Union opposition coalition, but who were subsequently suspended from Renamo activities.

Parliamentary ad-hoc commissions fail

The last sitting in 2001 of the Assembly of the Republic, fizzled out on 21 December, with none of the Assembly's ad-hoc commissions reporting significant progress.

Sergio Vieira, chairman of the ad-hoc commission dealing with the Assembly's standing orders, and the rights of deputies, read out a report on possible social security provisions for parliamentarians.

But it turned out that this report was an individual initiative of Vieira himself, and had not been submitted to the full ad-hoc commission, and the parliamentary chairman Eduardo Mulembue ruled Vieira out of order. Since Vieira's document had not been approved by the full commission, it could not be discussed by the plenary.

Renamo deputy Almeida Tambara presented a report from the ad-hoc Commission seeking to draw up a new national anthem. But he had no new lyrics or melody to put before the plenary.

As for the ad-hoc commission reviewing the country's electoral legislation, this has bogged down in irreconcilable differences between the Frelimo majority and the Renamo minority, making the dream of drawing up a consensual electoral law a mere illusion.


Austral Bank handed over to ABSA

The Amalgamated Banks of South Africa (ABSA) on 31 December took control of Mozambique's troubled Austral Bank, paying $10 million for 2.52 million shares - 80 per cent of the bank.

The sale contract was signed at Austral headquarters by Maria Otilia Santos, head of the government commission that negotiated the reprivatisation of the bank, by Godfrey Johnson, head of the ABSA Africa Desk, and Alex Schaffrath, of ABSA corporate finance.

This is the second privatisation of Austral. Under its former name of the People's Development Bank (BPD), 60 per cent of the bank was sold to a Malaysian/Mozambican consortium, headed by the Malaysian Southern Bank Berhard (SBB), in 1997.

Three years of ruinous mismanagement followed, and by 2001 Austral was sinking under a mountain of bad debt. At a shareholders meeting in April, SBB and its Mozambican partners refused to recapitalise the bank, and simply handed their shares back to the government.

The Bank of Mozambique stepped in at once, and appointed a three member provisional board of directors to run Austral. The new board, chaired by Antonio Siba-Siba Macuacua, who was formerly head of the central bank's banking supervision department, was charged with ascertaining the true financial position of Austral, and preparing it for a fresh privatisation.

ABSA won the privatisation tender, and pressed ahead with negotiations, despite the murder of Siba-Siba on 11 August.

The handover of Austral to ABSA was delayed while ABSA awaited authorisation from the South African central bank, the National Reserve Bank, which was not granted until 6 December.


50 year lease for Sena line

Transport Minister Tomas Salomao announced on 28 December that the government will launch a tender to lease out the Sena railway line in central Mozambique in February.

The Sena line runs from the port of Beira for over 600 kilometres to the coal mines at Moatize in Tete, with a spur into Malawi. The line has been paralysed for a decade and a half - it was comprehensively sabotaged by the apartheid-backed Renamo rebels during the war of destabilisation.

To sweeten this prospect, the government will give the successful bidder the right to operate the Beira-Zimbabwe railway (which is fully operational) for 15 years.

There are two scenarios for rebuilding the line - a "minimum" one, budgeted at $100 million, and a "maximum" one that would cost $350 million. The latter would envisage total reconstruction.

Salomao stressed that the viability of the Sena line would depend on exporting the Moatize coal, complemented by other traffic, notably sugar from the mill at Marromeu, on the south bank of the Zambezi, and limestone from the Muanza quarry.

There are huge reserves of coal at Moatize, but currently only a small amount is exported, by road, to Malawi. Moving large amounts of coal to clients overseas depends on repairing the railway. Salomao said that clearing land mines from the route of the Sena line is well advanced, and will permit security during the repair work.


WFP secures food for disaster prone areas

The United Nations World Food Programme (WFP) has already placed some 2,000 tonnes of foodstuffs at strategic points to assist Mozambicans living in areas prone to food shortages.

WFP Information Officer Inyene Udoyen said that the measure aims at mitigating the problems that occur when flooding takes places, since roads are normally cut during such disasters.

The WFP thinks that the quantity is enough to feed about 1.2 million people. Udoyen added that the WFP has a total of 6,000 tonnes of foodstuffs in stock to assist needy Mozambicans.


Last issue of "Metical"

The independent newsheet "Metical" published its last issue on 28 December, which the paper in its final editorial described as "one of the saddest days for the Mozambican press".

"Metical" was set up by Carlos Cardoso in 1997, after he broke with the journalists' cooperative Mediacoop, in a dispute over finance. Cardoso was the founder, owner, editor and chief writer of "Metical".

When he was murdered on 22 November 2000, the ownership of the paper became problematic. Responsibility for what appeared in "Metical" now fell on the shoulders of Cardoso's heirs - his two young children, Ibo and Milena, aged 12 and six.

The Cardoso family thought this situation unsustainable, and warned in early November of their intention to shut the paper. Closure could have been avoided, if an alternative company had been set up to run the paper, or if the "Metical" workers, with or without other backers, had purchased the paper's assets.

Cardoso's widow, Nina Berg, was amenable to negotiating such a purchase.

But time passed, no viable proposal was forthcoming, and so next week one of the best-known names in Mozambican journalism will no longer appear on its subscribers' fax machines or computers.


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