The mission from the International Monetary Fund (IMF), which visited
Maputo from 22 to 29 September, while welcoming recent economic
measures taken by the government, has not promised any immediate
resumption in financial support to Mozambique.
A statement issued on 29 September by the head of the mission, Michel
Lazare, dashed any hope the government may have had that normal
relations with its international partners could be restored in the near
Lazare said, “the authorities have requested the Fund to resume
discussions on financial support as soon as possible. A solid track
record of implementation of sound macroeconomic policies and an
effective initiation of the audit process in the near term would help
to create the conditions for a possible resumption of program
discussions with the IMF”.
The audit in question is of three loans from European banks (mostly
from Credit Suisse and the Russian bank VTB) to quasi-public companies
that were guaranteed by the previous government under President Armando
The loans were to the Mozambique Tuna Company (EMATUM – $850 million),
and to the companies Proindicus ($622 million) and Mozambique Asset
Management (MAM – $536 million). The government guarantees for these
loans added 20 per cent to the country’s foreign debt.
These loans were granted in 2013-2014, but only the EMATUM loan was
public knowledge. The Proindicus and MAM loans were not disclosed,
either to the public or to the country’s international partners,
including the IMF.
When the loans became public knowledge in April, the IMF suspended its
programme with Mozambique, including the second instalment of a $283
million loan under the Fund’s Standby Credit Facility (SCF). Other
partners followed suit, including the 14 donors and funding agencies
that used to provide direct support to the state budget. Further
disbursements of budget support were suspended.
The IMF made clear that the basic condition for the resumption of
normal relations is an independent, international audit of the three
loans, to establish exactly which happened to the money.
The government accepted the need for an audit and at the recent meeting
in Washington between President Filipe Nyusi and IMF Managing Director,
Christine Lagarde, it was agreed that the next IMF mission would
discuss the terms of reference for the audit, in which the lead
Mozambican agency will be the Attorney-General’s Office (PGR).
The PGR has already begun investigations and has declared that it has
found signs of criminal behaviour.
The IMF mission did not result in terms of reference for the audit, but
only began discussions on them. Lazare’s statement said the mission
“made considerable progress with the Attorney General’s Office on the
drafting of detailed terms of reference (TOR) for an international and
independent audit of EMATUM, Proindicus and MAM”.
Lazare added “Drafting of the TOR is ongoing, and is expected to be
completed soon”. The objective of the audit, the IMF said, is to
“strengthen transparency, governance, and accountability to avoid
recurrence of past debt problems”.
Lazare said Mozambique “is facing a challenging economic environment”,
with economic growth now in decline. The forecast growth for this year
is 3.7 per cent in 2016 (down from 6.6 per cent in 2015). This, he
said, “is significantly below levels observed in recent years”.
Inflation had risen sharply, with the annual inflation rate reaching 21
per cent in August, while the Mozambican currency, the metical has
depreciated by over 40 per cent since the start of 2016.
“At the same time, a significant decline in imports has been more than
offset by a weakening of exports, foreign direct investment, and donor
financing”, Lazare added. “This has maintained pressure on
international reserves, which have continued to decline”.
The mission, he said, welcomed the measures taken recently by the
government, including the amended 2016 budget, which includes measures
“to contain non-essential spending”. Lazare also expressed approval of
the Bank of Mozambique’s monetary measures, including an increase in
the benchmark interest rate by 300 base points (so that the rate is now
17.25 per cent). This, Lazare claimed, would “reduce excess liquidity”.
He thought it appropriate that the exchange rate has been allowed to
fluctuate “to help restore balance between supply and demand for
foreign exchange and support the needed ongoing balance of payments’
adjustment, while limiting the loss of international reserves”.
Lazare added that “further policy tightening is needed to safeguard
macroeconomic stability”. He approved of the austerity budget for 2017
which the government will bring before parliament later this year. He
believed that budget “is set to further consolidate the state of public
finances while preserving critical social programs”. The IMF also
“welcomed the central bank’s intent to continue adjusting its monetary
stance to help reduce inflationary pressures”.
From Lazare’s words it is very clear that normal relations between
Mozambique and the international financial institutions will only
resume once the audit of EMATUM, Proindicus and MAM is held.
More than 213,000 people affected by drought are befitting from the
distribution of food aid in the western province of Tete, according to
the permanent secretary of the provincial government, Lina Portugal.
The drought mostly affects districts in the south of the province, such
as Changara, Marara, Cahora Bassa and Magoe, as well as parts of
Moatize, Doa and Mutarara,
Despite repeated attempts to plant crops, peasant farmers in the
affected areas have been unable to bring in any significant harvests,
with crops withering in the intense heat.
The Tete government has launched a domestic solidarity campaign to
collect goods and money for the drought victims, and Lina Portugal told
reporters on 3 October that there has been a positive response.
As for distributing food, those who are unable to work receive it free
of charge, but people with productive capacity are enrolled in the
“food for work” programme.
Portugal said the food for work programme will continue until March,
when it is hoped that peasants will be able to bring in the first
harvests of 2017.
Gunmen of the opposition party Renamo attacked the locality of Mecua,
in Meconta district, in the northern province of Nampula before dawn on
Locality head Olga Ussene, who appeared traumatized by the attack,
could not provide many details. “There was an attack but we haven’t yet
confirmed if anybody was killed”.
Nampula provincial police spokesperson Zacarias Nacute confirmed the
raid. The raiding party consisted of 13 men.
“During the attack the Renamo gunmen burnt a motor-cycle, a car and
various documents”, said Nacute. “They went into the health post where
they stole two sheets and blankets, a mattress and distilled water”.
He claimed that, due to police intervention, the attackers fled from
Mecua, and the situation returned to normal.
Health units have become a favourite target for Renamo in its raids,
which are continuing despite the negotiations between the government
and Renamo in Maputo.
Four illegal Ethiopian migrants died, and a further 40 were injured,
when the truck they were travelling in overturned and collided with
another vehicle on 30 September in the northern Mozambican province of
The incident occurred in Nangade district, on the border with Tanzania.
The Ethiopians were hidden inside a container carried by a Mitsubishi
Canter truck, which was driving from Nangade to the Cabo Delgado
provincial capital, Pemba. The national immigration service (SENAMI)
believes they entered the container in Nangade (after crossing the
Rovuma River, which forms the Tanzanian border).
The injured Ethiopians received medical treatment in the provincial
hospital in Pemba. 21 have been discharged and are now in a Pemba
police station waiting repatriation. The others are still in hospital.
Once they are well enough to travel, they too will be repatriated.
SENAMI spokesperson Cira Fernandes said the truck driver fled the scene
after the accident, and the police authorities are still looking for
him. They are also trying to locate the owner of the truck.
Fernandes said that none of the 44 Ethiopians were in possession of
passports or any other form of identification.
The Bank of Mozambique has been obliged to intervene in the fourth
largest of Mozambique’s commercial banks, Moza Banco, because its
solvency ratio had gone negative, according to the director for banking
supervision of the central bank, Joana Matsombe.
The solvency ratio of any company is calculated by dividing net income
and depreciation by total liabilities. In general, the higher the ratio
the more financially sound the company is. But a low solvency ratio may
indicate that the company will find it difficult to meet its
Interviewed by the independent television station STV, Matsombe said
the solvency ratio of a bank should not fall below eight per cent. But
in Moza Bank’s case, the solvency ratio was “below zero”.
“For this reason, the financial situation of the bank had deteriorated,
and it was incapable of meeting its obligations”, she said. “When this
happens, in any financial institution, the central bank has to
That intervention, Matsombe added, meant that all deposits in the bank
were guaranteed. The intervention was intended to protect the clients
of Moza Banco, but also to avoid any run on the banks.
Moza Banco was founded eight years ago, and grew rapidly. The latest
research on the banking sector, from 2014, undertaken by the
consultancy company KPMG, in partnership with the Mozambican
Association of Banks, showed that Moza Banco had a 7.2 per cent market
Only three banks had a larger share of the Mozambican market –
Millennium-BIM (30 per cent), BCI (29 per cent) and Standard Bank (14
per cent). Moza Banco had overtaken Barclays-Mozambique, whose market
share had fallen to 6.8 per cent. Several smaller commercial banks
accounted for the remaining 13 per cent.
The Mozambican government has promised that the increase in fuel prices
which took effect on 1 October will not affect passenger transport,
which remains subsidized.
Licensed minibuses used in passenger transport (and known colloquially
as “chapas”) currently pay only 31 meticais (about 40 US cents, at
current exchange rates) for a litre of diesel. Interviewed by the
independent television station STV, Transport Minister Carlos Mesquita
said this subsidy will remain in place, with the government picking up
the bill for anything above 31 meticais.
The cost of diesel at the pumps rose on 1 October from 36.81 to 45.83
meticais a litre. The government is committed to paying the fuel
distributors the difference between 31 meticais and the real price.
Mesquita said there was therefore “no reason to increase transport
fares” – but the owners of the minibuses disagree, partly because the
subsidy only benefits licensed operators, and many of them are
unlicensed. They also protest that fuel is only one of their overheads
– they must also pay for tyres, spare parts, and maintenance, all of
which have increased in price.
The current flat rate fares on chapas in Maputo and the neighbouring
city of Matola are seven or nine meticais, depending on distance.
The National Director of Energy, Almirante Dimas, said that, although
the price of oil has been falling on the world market, this has been
more than cancelled out by the devaluation of the metical against the
US dollar. The price Mozambique had to pay for those imports, when
expressed in meticais, was continually rising.
The Joint Commission set up between the Mozambican government and the
opposition party Renamo has suspended its meetings until 10 October.
On 30 September, the coordinator of the foreign mediating team, the
Italian Mario Raffaelli, told reporters that the interruption is to
allow the government and Renamo delegations to establish the
methodology to be used in an attempt to achieve consensus as quickly as
The Joint Commission was established in order to prepare a face-to-face
meeting between President Filipe Nyusi and Renamo leader Afonso
Raffaelli said that, although the full commission will not meet, the
sub-commission charged with drawing up draft legislation and
constitutional amendments on decentralization will continue its work.
The mediators do not plan to return to their home countries, but will
remain in Maputo.
“There will be no suspension as regards looking in depth into the theme
of decentralization”, Raffaelli promised.
The decentralization legislation is crucial for the appointment of
provincial governors from Renamo. Unless the Constitution is amended,
the only way for Renamo to acquire the governors it demands will be for
President Nyusi to appoint them. Under the current constitution (passed
unanimously, including by the entire Renamo parliamentary group, in
2004), the President of the Republic has the sole prerogative of
appointing provincial governors.
Renamo claims the right to govern six central and northern provinces,
on the grounds it won the October 2014 general elections in those
provinces. In fact, although Dhlakama topped the presidential poll in
five provinces (Sofala, Manica, Tete, Zambezia and Nampula), Renamo
only won in the parliamentary elections in Sofala and Zambezia.
The Joint Commission has made no progress at all on the other points on
its agenda, such as inclusion of members of the Renamo militia in the
armed forces and the police, and the demilitarization and disarming of
Mozambique’s National Director of Forests, Xavier Sacumbuera, has
confirmed that, as from January, all exports of logs of any type will
be banned, assuming that the Mozambican parliament, the Assembly of the
Republic, approves a government proposal at its sitting in mid-October.
Speaking to reporters in Beira, where a national meeting on forests
took place, Sacumbuera said the government has submitted an amendment
to the forestry law, which is with the Assembly, “so that, as from
January 2017, the export of logs from all species of Mozambican trees
will be forbidden”.
He added that this ban is intended to stimulate the processing of
timber inside Mozambique, creating more jobs, adding value to wood, and
only exporting processed wood.
There have been many haphazard attempts in the past to outlaw the
export of logs from particular species of hardwoods, but this would be
the first blanket ban on the export of all logs. A complete ban means
that forest wardens and customs inspectors will no longer have to
determine what kind of trees the logs come from, since all log exports
will be illegal.
Current estimates are that Mozambique is losing 220,000 hectares of
forest a year. This is due not only to logging, but to the use of wood
fuel, uncontrolled bush fires associated with slash and burn
agriculture, and the clearing of land for building purposes.
The Minister of Mineral Resources and Energy, Pedro Couto, left the
government on 29 September to take up the position of chairperson of
the Board of Directors of Hidroelectrica de Cahora Bassa (HCB), the
company that operates the Cahora Bassa dam on the Zambezi River.
A statement from the office of President Filipe Nyusi announced that
Couto was relieved of his duties. At much the same time, HCB announced
that, at an extraordinary meeting of HCB shareholders, Couto was
elected chairperson of the company for the period 2016-2018. He
replaces Paulo Muxanga who became chairperson of HCB in 2007.
Couto inherits a financially healthy undertaking. The main task he will
face is negotiating the construction of a second power station at
Cahora Bassa. The existing power station, on the south bank, can
generate a theoretical maximum of 2,075 megawatts. A second station, on
the north bank, could add a further 1,250 megawatts.
So far, President Nyusi has not announced a replacement for Couto at
the Ministry of Mineral Resources and Energy.
Mozambique’s Central Office for the Fight against Corruption (GCCC) has
arrested Setina Titosse, the former Chairperson of the Board of the
government’s Agricultural Development Fund (FDA), charging her with
corruption, embezzlement, abuse of office and trafficking in influence.
According to the GCCC, Titosse was charged alongside 13 other FDA
staff, two employees of the electricity company EDM, and an official of
the Tax Authority (AT).
Titosse and the others are accused of setting up phoney agricultural
and livestock projects, which received funding from the FDA. Some of
the livestock projects were partly implemented, through the acquisition
of cattle. But once the money was deposited in the accounts of the
farmers, between 50 and 70 per cent of it was transferred to Titosse.
When the FDA hired services, the companies that won the tenders did so
because they paid bribes to Titosse. In addition, sometimes on public
holidays, Titosse ordered the illegal payment of extra allowances,
equivalent to a month’s wages, to herself and to other FDA officials.
When she travelled inside the country, Titosse ordered that her
expenses be paid, not in Mozambican currency, but in US dollars, and at
a rate that exceeded the table of expenses laid down for use in the
The GCCC has charged a former Financial Director of Mozambique Airlines
(LAM) with abuse of his office.
The GCCC does not name the official charged, but the LAM Financial
Director at the time of the alleged crimes (2008-2014) was Jeremias
He is accused of ensuring that LAM signed 25 contracts with a building
company owned by his brother, who is also a LAM employee. LAM paid this
company a total of 5.3 million meticais (about $190,000, at the
exchange rate of the time).
The GCCC also investigated allegations against the then Chief Executive
Officer of LAM, Marleyn Manave, but declined to charge her with any
criminal offence for lack of sufficient evidence.
The Mozambican government on 27 September approved the draft Economic
and Social Plan for 2017, which envisages an economic growth rate of
5.5 per cent. The Council of Ministers (Cabinet) approved both the plan
and the accompanying state budget, which will now go before the
country’s parliament, the Assembly of the Republic.
The government spokesperson, Deputy Health Minister Mouzinho Saide,
told reporters that one of the priorities of the plan is to increase
domestic food production, in order to overcome this year’s deficit in
“To deal with the current macro-economic scenario, the Plan seeks to
develop actions that will improve the quality of the national financial
and exchange system, with the main aim of preserving macro-economic
stability and the value of the national currency”, added Saide.
As for the budget, it would remain restrictive, holding down public
expenditure to “sustainable levels”. Saide said reforms will continue
to increase state revenue and the efficiency and effectiveness of
He promised that, despite the restrictions on expenditure envisaged,
the government would prioritise the allocation of expenditure to the
key sectors of education, health, agriculture and social welfare.
The water storage and distribution capacity in Maputo city has doubled
following the conclusion of work on rebuilding the water distribution
centre in neighbourhood of Alto-Mae.
The Minister of Public Works, Carlos Bonete, inaugurated the
distribution centre on 23 September. Its storage capacity has increased
from 4,500 to 10,000 cubic metres of water.
The new centre allows increased reliability in the neighbourhoods of
Alto-Mať, Central, Malanga, Maxaquene, Polana and Mafalala. Previously
these parts of the city faced limitations due to low water pressure.
Speaking after the inauguration ceremony, Bonete said the Alto-Mae
centre is part of the second phase of the rehabilitation and expansion
of the water supply system in Maputo, the neighbouring city of Matola
and the district of Boane, which will cost an estimated total of ten
billion meticais (about $132 million at current exchange rates).
The project also involves building a new water treatment station on the
Umbeluzi River; the installation of 27 kilometres of water main between
the Umbeluzi station and the Matola distribution centre; the
construction of new distribution centres in Tsalala, Matola Rio, Belo
Horizonte, Boane and KaTembe; the building of 16 small scale water
supply systems in the northern parts of Maputo and Matola
municipalities; and laying about 1,000 kilometres of water pipes with
their respective home connections.
These actions, Bonete said, benefit about 1.5 million people in the
Greater Maputo Metropolitan Area, and will boost industry and trade in
Maputo and Matola cities.
At Alto-Mae, a new pumping station was built and equipped, and
generators were installed to ensure that water distribution will
continue even in the event of a power cut.
This work has been co-financed by the Mozambican government and the
French Development Agency (AFD).
The National Cashew Institute (INAJU), in the northern province of
Nampula, in the current campaign has sprayed 2.5 million cashew trees
against mildew and other pests.
Speaking to the press in Nampula city, the INCAJU provincial delegate,
Jaime Chissico, said that this was only 15 per cent of the 14 million
trees in the province. Because of the lack of funds it was not possible
to spray all the trees.
Given this situation, Chissico urged cashew producers to use other,
cheaper forms of treatment, such as cleaning and pruning their trees by
Chissico said that in this campaign Nampula expects to market about
45,000 tonnes of cashew nuts. Most of these nuts will be sold to the
local cashew processing factories.
In the 2015-2016 campaign, Nampula, the largest cashew producing
province in the country marketed 44,000 tonnes of nuts. There are now
13 cashew processing factories in Nampula, but only 11 of them are
Mozambique’s National Agricultural Mechanisation Programme (PNMA) will
benefit 35,000 people through the Agricultural Service Centres (CSAs)
spread across the country, according to Agriculture Minister Jose
Speaking on 22 September at the opening session of the Second National
Meeting on Agricultural Mechanisation, in the central city of
Quelimane, Pacheco stressed that the vision of the CSAs is to provide
excellence at all levels – in attending to the needs of producers, in
making available services for preparing the land, for sowing, for
harvesting and for transport and storage. The CSAs also sell inputs and
provide technical assistance.
“An estimated 35,000 producers are benefitting from this programme”,
said Pacheco, with “each CSA working, on average, an area of 1,600
hectares and with a level of efficiency of at least 80 per cent”.
The government’s Agricultural Development Fund (FDA) has set up 73
CSAs, covering all provinces in the country. By the end of the year a
further 18 will be installed, bringing the total to 91. Each CSA is
equipped with four to six tractors, and with agricultural tools for
ploughing, harrowing, fertilizing, sowing and harvesting.
This equipment forms part of the “More Food Programme”, valued at $97
million, covering a total of 513 tractors and more than 2,000
agricultural implements. The intention of the programme is to raise
productivity and transform subsistence into commercial agriculture.
So far the equipment has been used to work on about 1,500 hectares,
benefitting 1,800 producers with estimated production of 62,000 tonnes
The country has 36 million hectares of arable land, but only 1 per cent
of this is currently under cultivation. Of the arable land, 3.3 million
hectares has the potential for irrigation, but only 14 per cent is
being correctly exploited.