Mozambique News Agency

AIM Reports

 


No.362, 10th July 2008


Contents


Human rights group finds prison improvements

The Mozambican Human Rights League (LDH) believes that the living conditions for inmates of Mozambican prisons have improved this year, despite continued overcrowding and poor diet. According to Arao Zita, an LDH worker in the prison area, in the visits made to prisons between January and April, the LDH did not come across a single case in which prisoners had been tortured. This compares with a total of 161 cases of torture registered in 2007.

Speaking to AIM shortly before presenting a report on human rights and the prison system at a seminar organised by the NGO ARO-Juvenil, Zita said “we found no cases of torture perpetrated by prison guards. This results from the lectures given in the prisons, and the training of guards on this matter”.

The number of people illegally detained seems to be dropping. For most crimes, suspects can only be held for a maximum of 48 hours before a magistrate either confirms their detention or orders their release. In the past, the preventive detention deadlines were routinely ignored. This year, however, the LDH noted an improvement. Thus in the first six months of 2007, there were 219 prisoners in the jails in the south of the country whose term of preventive detention had been exceeded. This year the figure was down to just four.

The improvement was not so startling in the rest of the country. Nonetheless, in the northern jails, the number of prisoners held illegally beyond the preventive detention deadlines fell from 119 to 40, while in the central provinces the decline was from 61 to 15.

Overcrowding remains a serious threat to prisoners’ health. Thus in Maputo Central Prison, the largest jail in the country, 2,538 people are living in premises that were designed to hold 800. The Inhambane provincial jail is much smaller; it should hold no more than 75 people, but currently 339 prisoners are incarcerated there.

Overcrowding means that contagious diseases spread very rapidly. According to the LDH, prisoners are particularly at risk of malaria, tuberculosis and HIV/AIDS. Zita said the situation is made worse by the lack of health posts in many jails, which obliges the prison authorities to send sick inmates to health units that may be many kilometres distant.

The LDH also protested at the poor and monotonous diet served in most prisons. There are some prisons where the problem has been overcome through prison farms where the inmates grow their own food. But that is not the case in most jails.

“There are prisons where the diet is just maize flour and beans every day”, said Zita. “And the beans are just cooked with water and salt. There are also prisons where, instead of three meals a day, there is only one, at midday”.


Seed potato imported from France

Mozambique has imported 200 tonnes of seed potatoes from France in order to step up potato production in Maputo province, as part of the government’s commitment to a “Green Revolution”.

The Maputo Provincial Director of Agriculture, Setina Titosse, told AIM that potato was planted in 800 hectares, and will be harvested next month. Potato is grown in Boane and Moamba districts to supply consumers in Maputo and Matola. As this does not meet demand, the cities depend on the import of South African potatoes. The import of seed potato forms part of a strategy to reduce this dependence.

Meanwhile the Agriculture Ministry is expecting an overall increase in agricultural production of 7.5 per cent this year, due largely to favourable climatic conditions (despite the flooding in the Zambezi Valley at the start of the year).

Sugar is expected to remain Mozambique’s most important cash crop. The latest projections for this year’s sugar harvest, according to the government’s Agricultural Promotion Centre, are 294,000 tonnes, up from 243,600 tonnes in 2007.


Growth falters despite investment in mining

Mozambique’s Gross Domestic Product growth rate is faltering, according to figures released by the Bank of Mozambique on 8 July. In 2007 the economy grew by seven per cent, but growth in the first quarter of this year, compared with the first quarter of 2007, was only 3.5 per cent, the Bank’s spokesperson, Waldemar de Sousa, told a Maputo press conference.

This was essentially due to a poor performance by the manufacturing industry, which showed a nine per cent decline in production. The electricity and water sector also declined, by 10.4 per cent.

However, the government can take heart from continued strong growth in other sectors during the first quarter of this year – in transport and communication (16.4 per cent growth), mining (12.6 per cent) tourism (11.8 per cent), agriculture (8.3 per cent) and construction (8.1 per cent).

The balance of trade worsened over the quarter, with exports declining by 7.1 per cent, while imports rose by 19.5 per cent. This was largely caused by the bill for imported fuels, which rose from $61.7 million in the first quarter of 2007 to $115.7 million in January-March this year. Fuel accounted for 15.5 per cent of the total import bill.

There was also a 31.8 per cent rise in the cost of imported grain, from $40.7 million in the first quarter of 2007 to $53.6 million this year.

Mozambique is importing fewer cars than it did last year. The cost of imported vehicles fell 5.7 per cent, from $46.9 to $44.2 million.

Mozambican exports remain dominated by the aluminium ingots produced at the MOZAL smelter on the outskirts of Maputo. Aluminium exports in the first quarter were valued at $330.3 million, which was 60.8 per cent of all exports. Nonetheless, this was a 13 per cent decline on the $379.5 million earned by Mozambican aluminium in the first quarter of 2007.

The fall is due partly to a 1.7 per cent decline in the world market price of aluminium, and partly to a reduction in MOZAL’s capacity, due to electricity shortages in South Africa. MOZAL is not on the Mozambican electricity grid, and derives its power from the South African electricity utility Eskom. Unable to supply all its customers, Eskom demanded that major industrial consumers, including MOZAL, reduce their consumption of electricity.

There was also a 19.2 per cent decline in the country’s second most important export, electricity from the Cahora Bassa dam on the Zambezi. Exports from Cahora Bassa were worth $64.9 million in the first quarter of 2007, but only $52.4 million this year. Eskom had to reduce its purchases of Cahora Bassa power because of essential maintenance work on the Apollo sub-station in South Africa. Exports to Zimbabwe were also cut.

The January to June inflation rate, measured by the Maputo Consumer Price Index, was 3.8 per cent.

Annual inflation rose from 10.3 per cent in December to 12.1 per cent in March. These figures mean is that the government’s target of an annual inflation rate of 5-6 per cent by December 2008 is likely to be missed.

The country’s net international reserves rose from $1.5 billion in December to $1.684 billion in June (enough to cover six months worth of imports). This is almost exactly on target: the planned figure for reserves was $1.679 billion by June 2008.

Sousa believed that the Mozambican financial sector was stable. Non-performing loans have fallen to a level where any repeat of the collapse of the two privatised banks (the BCM and Austral) in 2000 and 2001 seems quite unthinkable. Bad loans accounted for 3.8 per cent of the entire credit portfolio in 2005, and this figure fell to 3.3 per cent in 2006 and 2.6 per cent in 2007.

Sousa stressed that the country’s risk rating has improved. In the rating of both Standard and Poor’s and Fitch, Mozambique’s classification has risen from B to B plus. Under the World Bank’s Country Policy and Institutional Assessment (CPIA), Mozambique improved marginally from 3.48 in 2005 to 3.53 in 2006 – which is rather better than the average of 3.33 for borrowers from the World Bank’s soft loan facility, the International Development Association (IDA).

The CPIA ranks countries on 16 different factors, including macro-economic management, fiscal policy, regulatory environment, gender equity, property rights, quality of public administration and transparency (including corruption) in the public sector. In the CPIA, scores are from one to six, with one being highly unsatisfactory and six highly satisfactory. A score of four is “good”.

Investment in mining increase

Investment in the research and development of projects in the mining sector have been growing every year since 2001, and by 2007 the total invested reached $686 million.

Initially, growth was slow. There was a steady increase in investment in the sector between 2001 and 2004, but it did not exceed $50 million a year. But in 2005, there was investment of $169 million, rising to $203 million in 2006 and to $217 million in 2007.

The national director of mining, in the Ministry of Mineral Resources, Fatima Momade, attributes this growth to the overhaul of mining legislation. “The whole point of the reform was to attract investment”, Momade told reporters, “and we have achieved that. There are several projects under way, some still at the stage of exploration, some now entering the phase of development, not to mentions those that are already producing, such as the titanium-bearing heavy sands in Moma, the tantalite project in Zambezia, and the gold mining by the company Agrupamento Mineiro in Manica”.

With the developments now under way, Momade expected the contribution of mining to the Gross Domestic Product to rise from the current figure of five per cent to 15 per cent by 2010.

She added that the mining companies are contributing to the state budget through royalties and other taxes, are creating a significant number of jobs. They are also investing in schools, clinics, orphanages and other social projects that benefit the local populations

Momade said that to ensure that this sector keeps increasing its contribution, the government should continue with the legal reform, consolidate licensing procedures in the light of the decentralization policy, and improve tax collection by strengthening the monitoring and inspection of mining companies by the provincial directorates of mineral resources.

She also wanted to see better control over the sale of minerals through coordination between her ministry and the customs services, the police, and the local authorities.


Increase in southern rail freight

The rail network has handled a large increase in freight traffic, although this has been exclusively in the south of the country. In the first five months of this year the railway handled 1.65 million tonnes of freight, an increase of 9.2 per cent on the figure for the same period in 2007.

This growth occurred in the southern rail system – the lines from Maputo to South Africa, Swaziland and Zimbabwe, which handled 1.477 million tonnes. These lines are managed by the publicly owned rail and ports company, CFM.

The two other functioning lines – from Beira to Zimbabwe, and from the northern port of Nacala to Malawi – are run by consortia headed by private companies. Between them, they only handled 173,000 tonnes of freight between January and May, a decline of 43.7 per cent compared with 2007. One of the main factors leading to this decline is the collapse of the Zimbabwean economy.

It is the Ressano Garcia line from Maputo to South Africa, which is the best performer. In the five-month period, it handled 1,063 million tonnes. Just 34,000 tonnes of this was Mozambican traffic, and the rest was international (mainly South African).

There was also a 53.5 per cent increase in the use of the Goba line to Swaziland. Most of this was transport of goods to and from Swaziland, notably coal, and containerised traffic.


Portugal cancels debt

Portugal has cancelled Mozambique’s remaining debt to Lisbon, estimated at $393.4 million, accumulated since shortly after independence until 2005. An agreement to that effect was signed in Maputo on 1 July between Finance Minister Manuel Chang and his Portuguese counterpart Fernando Teixeira dos Santos. Most other European creditors had cancelled Mozambique’s debts long ago.

Chang described the debt cancellation as an acknowledgement by Portugal of the achievements of the Mozambican government in implementing programmes aimed at growth and the socio-economic development of the country. He said that money that would have otherwise gone towards servicing the debt to Portugal could now be used to finance activities included in the government’s Action Plan for the Reduction of Absolute Poverty (PARPA).

For his part, Teixeira dos Santos said that writing off this debt is in line with a commitment by Portugal, as a member of the “Paris Club” of creditor nations, to cancel the debts of Highly Indebted Poor Countries (HIPC).

Explaining the delay, Teixeira dos Santos told reporters that, though negotiations started in 2005, the final agreement was only signed now because Portugal itself had been facing a serious financial crisis as a result of its budget deficit, 6.1 per cent, well above the 3 per cent acceptable to the European Union. He claimed that, before writing off the debt, Portugal had first to stabilize its own economy, which has been finally achieved.

Besides this agreement, the two countries also signed other memoranda, namely a tripartite agreement to grant a €100 million ($148 million) loan, and another on technical cooperation between the two countries' Finance Ministries.

The tripartite agreement was signed between the two Finance Ministries and the Portuguese state bank, the Caixa Geral de Depositos (CGD). This credit will be used to develop socio-economic infrastructures in the areas of agriculture, energy, public works, industry and trade.

On technical cooperation, the two ministries intend to design programmes and step up technical assistance in the areas of customs, public purchases, public debt, planning and international relations, taxes, financial inspections, budgeting and public accounting.


Japan assists health training institutes

The Mozambican and Japanese governments on 4 July signed an agreement to expand the health science institutes and other training centres in all Mozambican provinces.

Under this agreement, signed by Mozambican Health Minister Ivo Garrido and Japanese ambassador Tatsuya Miki, Japan will also invest in the acquisition of new equipment for the 12 institutes and training centres that currently exist. To this end the Japanese government is donating $9.6 million to be used in these areas over the next three years.

“This agreement makes it possible to train more health staff”, said the Japanese diplomat. “There will be a total increase of 390 classrooms for students”.

“We hope that with more trained health workers, the quality of health care in Mozambique will be lifted”, he said. “We will remain firm in supporting Mozambique in the sector of human resources, since this is one of the key sectors for development”.

Ivo Garrido praised the Japanese support, which would “expand the government’s efforts to train staff for the health sector”.

This is not the first Japanese assistance for health training institutes. In 2005, the Japanese government financed the building from scratch and the equipping of a new health science institute in the central city of Quelimane.


Oil refinery planned

If all goes according to plan, by the middle of the next decade there could be two oil refineries operating in Mozambique, one at Nacala in the north of the country, and one in the district of Matutuine, in the far south of the country.

The southern refinery is a project of Oilmoz, a company founded by former foreign minister Leonardo Simao. On 27 June Oilmoz signed a Memorandum of Understanding with the world’s largest services company, PriceWaterhouse Coopers (PWC), under which PWC will undertake feasibility studies for the project.

Other areas covered in the memorandum are the identification of strategic partners, consideration of tax, legal, insurance and regulatory requirements, risk management, marketing the project to “key stakeholders”, and finance modelling.

Oilmoz says that the total capacity of the refinery will be 350,000 barrels a day, and it will cost about eight billion US dollars to build. The Oilmoz Chief Executive Officer, Fausto Cruz, told AIM that the funding will come from a consortium of banks, and that negotiations with the banks are now being finalized.

Cruz said that around 95 per cent of the production from the refinery will be exported, mostly to other

members of SADC (Southern African Development Community). Currently SADC imports about 506,000 barrels of refined fuels a day, and by 2014, the year Oilmoz expects the refinery to start operating, the figure will have risen to over 600,000 barrels a day.

Matutuine is an environmentally sensitive area, noted for its biodiversity, and its pristine beaches. A press release from Oilmoz promises that “the erection of the refinery and the petrochemical processing plant will be undertaken in accordance with the latest environmental, industrial and engineering standards applicable in Mozambique, the European Union and North America”.

It continues that “strict environmental standards will be imposed in regard to the use of resources, air, noise and soil pollution, and the discharge and disposal of waste products, in liquid, gas and solid forms”.

Also part of the package is a 500-megawatt gas-fired power station. This additional electricity will be a welcome spin-off from the project, given southern Africa’s current critical shortage of power. The lack of electricity has put several major industrial projects on hold, including a third phase of the MOZAL aluminium smelter on the outskirts of Maputo.

Oilmoz expects that 15,000 jobs will be created during the construction phase, and a further 2,000 direct, permanent jobs once the refinery is operational.

The company is working with the Joaquim Chissano Foundation (of which Simao is executive director) to design a package of social projects to assist the communities living in the refinery area. The foundation will also take responsibility for all of Oilmoz’s training projects.

The refinery planned for Nacala has as its main shareholder the US company Ayr Logistics. Known as the Ayr-Petro-Nacala project, its capacity will be somewhat smaller than that of the Oilmoz refinery, with a projected production of 300,000 barrels a day.

 


 

This is a condensed version of the AIM daily news service - for details contact aim@aim.org.mz

 


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