Printer-friendly versionSend by emailPDF version

Two Mauritian business partners of Nyimpine Chissano, son of president Joaquin Chissano, have been accused of involvement in embezzling $20 million from the national pension fund.


News summary and clippings
on the things people ask me about,
circulated by Joseph Hanlon
([email protected])
14 March 2003


partners of Nyimpine Chissano, son of president Joaquin Chissano, have
been accused of involvement in embezzling $20 million from the national
pension fund. At the request of the Mauritius independent commission
against corruption, a court on 22 February froze bank accounts and assets
of Dev Manraj and of the London-based Teeren Appasamy. In Mozambique, the
two are owners of Belle Beach Holdings, which in turn owns Expresso Tours.
Other shareholders are Nyimpine and N'Naite Chissano, Apolinario
Pataguana, and Egas Mussanhane. Giving evidence at the Cardoso murder
trial, Nyimpine Chissano justified delays in making various payments on
the grounds that he was waiting from money from Appasamay in London.

admitted she lied to the court during the Carlos Cardoso murder trial, but
claims she was coerced into doing so by Nyimpine Chissano, at a meeting
set up by Apolinario Pateguana and his sister Stella, according to the
weekly newspaper Savana. Cossa also said that while she was with him, she
watched Nyimpine telephone Interior Minister Almerino Manhenje and talk to
him twice.

SONS HAVE LAND. Nyimpine Chissano and Mussumbuluco Guebuza, sons of the
two top leaders of Frelimo, Joaquin Chissano and Armando Guebuza, both
have land in a disputed area on the edge of Maputo, according to the daily
MediaFax. Both deny this. Nyimpine's lawyer claims the land is held by the
office of the first lady which is controlled by Nyimpine's mother,

"Domingo" reports convicted assassin Anibal dos Santos Junior
("Anibalzinho") was allowed out of prison in mid-February to visit his
mother, and roamed around Maputo in a Mercedes-Benz saloon that day. The
General Command of the Mozambican police claimed the story was "totally
false", But "Domingo" stuck by the story, saying it had several sources,
including high-ranking people in the state apparatus.

SIBA-SIBA PETITION. As part of the campaign to force an investigation of
the assassination of economist Antonio Siba-Siba Macuacua, a group of
prominent Mozambicans has nominated him posthumously for the Transparency
International Integrity Award. A petition in support of the nomination
(below) is now being circulated, and if you wish to support it, please
reply to [email protected] by Monday 17 March.


LEAST RAIN IN 50 YEARS. Maputo has had the least rainfall in a "rainy"
season for 50 years which means the drought in the south has extended into
a second year, according to the Famine Early Warning Systems Network (FEWS
NET). It warns that food shortages are expected to worsen over the next
year, after "a near-total crop failure in some zones, following a poor
harvest last year." Perhaps 1 million people in parts of six provinces -
Tete, Manica, Sofala, Inhambane, Gaza and Maputo - will need food aid. But
harvests should be good in parts of Zambézia, Nampula and Sofala. However
a northern surplus does little to lessen shortages in the south; there is
no longer a state grain marketing board and no longer a national grain
policy, and private traders move relatively little grain from north to
south. And when the free market does not work, Mozambique has to turn to
the donors.

Simao said that the natural disasters do not warrant the declaration of a
state of emergency. He admitted pressure on the government to declare an
emergency by institutions which "depend on emergency funds. When the
government does not declare an emergency, these institutions don't have
access to that money. So a perverse effect is created. You have to declare
that an emergency exists, even when it doesn't, in order to enable these
institutions to have access to money. But we can't use that as a
criterion. The criterion must be the scale of the disaster."

DONOR POLICY WORSENING FOOD CRISIS. World Bank, IMF and donor policy have
reduced food security because poor farmers have less support, according to
an article published by IRIN, the United Nations Integrated Regional
Information Networks. Policy prevents government intervention, and looks
at short-term financial considerations rather than medium-term food
security, critics argue. Subsidised inputs such as fertiliser were
stopped, social services starved of funds, and the commodity boards that
fixed producer prices and collected farmers' produce abolished. The poor,
for the most part, are now on their own.

CYCLONES AND FLOOD. Two cyclones have hit Mozambique this year, Delfina in
the north in January and Japhet, which is currently causing serious floods
on the River Save which was badly affected in the floods of 2000.
Thousands of people were evacuated after early warngins, but some still
needed rescue; 49 people died in Delfina and 11 are known to have died in


NO RENAMO DISRUPTION. The new parliament session opened peacefully,
without the promised Renamo disruption.

ELECTION DELAY. Municipal elections in are behind schedule admitted
Antonio Carrasco, director of the Electoral Administration Technical
Secretariat (STAE). It will take at least six months to organize all the
stages of the registration and election process, which suggests elections
could not be held until October. The exact dates of elections are fixed by
the government, which normally just endorses the date suggested by the
CNE. So far, CNE as not suggested a date. One possible source of further
delay is the Renamo demand that, as set out in the law, the CNE must
appoint a new director of STAE, after seeking candidates through publicly
advertising the job. Carrasco remains in post and could run the local
elections before a replacement is named; indeed, he could apply for the
Meanwhile, Frelimo has named Political Commission member Alcinda Abreu
the new head of its election office. She was Minister for Social Welfare
1994-97, and a Frelimo appointee to the 1998 and 1999 CNEs.

INDUSTRIAL CRISIS. If one leaves aside mega-projects such as the MOZAL
aluminium smelter, Mozambican industry is stagnating, or even declining,
warned economist Carlos Castel-Branco "Outside of the mega-projects (which
are very localised with few economic linkages), there is little to show
change and transformation". Mozambican GDP had grown - but this growth has
not generated new technological capacities, or promoted a broadened and
diversified production base. Apolinario Panguene, a consultant for the
Confederation of Mozambican Businesses (CTA), said 30 per cent of
Mozambique's small and medium sized industries closed down or changed
their activity between 1998 and 2002. Of those that still exist, "many are


Agence France Presse , February 22, 2003 Saturday

PORT LOUIS, Feb 22. The supreme court in Mauritius has frozen the assets
of four individuals and eight businesses as part of an inquiry into a
20-million-dollar fraud case at the Mauritius Commercial Bank (MCB), court
officials said on Saturday.

The 163-year-old bank, the largest private bank in the Indian Ocean island
state, announced on Thursday that 600 million rupees (20 million dollars,
18 million euros) had been illegally transferred into its accounts from
the national pension fund. At the request of the independent commission
against corruption (ICAC), the court has frozen the assets of retired MCB
director Robert Lesage, who is currently in prison awaiting the start of
his trial on Monday.

Lesage is accused of involvement in the fraud case. He has been charged
with stealing 500 million rupees and laundering 372.9 million rupees.

The court has also frozen the assets of former finance ministry official
Dev Manraj, London-based Mauritian businessman Teeren Appasamy and
Mauritian economist Donald Ha Yeung.

The assets of eight businesses of which Appasamy is majority shareholder
have also been frozen.

The bank has said the 600 million rupees will be repaid to the pension
fund, along with nine million dollars in interest.

Trading in MCB shares, suspended on Monday after the disclosure of the
serious irregularities, is to resume on February 24. (Copyright 2003
Agence France Presse)

The Indian Ocean Newsletter, February 22, 2003

A Mauritian businessman is at the heart of a financial scandal that runs
the risk of comprising political figures of every political camp in Port

A Mauritian businessman who made his fortune in real estate in Great
Britain is at the heart of a financial scandal that runs the risk of
comprising political figures of every political camp in Port Louis. Teeren
Appasamy is suspected of having been the beneficiary of the embezzlement
of 500 million rupees ($ 1 equals 27.7 rupees) from the National Pension
Fund (NPF). The money was deposited in a Mauritius Commercial Bank (MBC)
account in the name of the ministry of social security and national
solidarity. The manager of these funds at the MBC, Robert Lesage, is
accused of having embezzled this money in collusion with high-level
employees at the bank. Arrested by the Independent Committee Against
Corruption (ICAC) and detained since February 18, Lesage revealed the
names of the people that were supposedly involved in this affair: former
financial secretary Dev Manraj, who was T. Appasamy"s consultant for his
hotel projects in Mauritius and Mozambique; Donald Ha Yeung, an economist
and a partner at Price WaterhouseCoopers who has served on the boards of
several of Appasamy's companies, including Angel Resort Ltd; and
high-level MCB officials. Appasamy's defense. Appasamy, who holds 60% of
the newspaper Le Dimanche and 40% of Siddick Chady's (a labor MP and
cinema owner) company, doesn't want to take the blame in this affair. He
rejected fraud accusations by claiming that he simply took out a
300-million-rupee, 15-year loan from the MCB. He also pointed an
accusatory finger at vice-prime minister Paul Berenger, who, according to
him, was behind these revelations in an effort to tarnish Dev Manraj
politically. In fact, Manraj is a likely MSM (ruling coalition) candidate
for this year's legislative by-elections to replace Anerood Jugnauth in
parliament when he becomes president of the republic. Manraj could then
succeed Berenger as finance minister when Berenger becomes prime minister
in Jugnauth's place in September.

Wide-ranging political ties. Considered a close associate of Vasant
Bunwaree, the Parti travailliste's (opposition) general secretary,
Appasamy is said to have financed his electoral campaign in the south of
the island. Bunwaree is marked in this affair, since he helped Appasamy in
his efforts to obtain bank loans when he was finance minister (1997-2000).
Even though the present scandal doesn't have any apparent links to the UOB
affair, Bunwaree had already had discussions with a representative of the
Swiss bank in 1997 about possibly placing NPF money abroad (ION 1026). T.
Appasamy has also long known G. Ollivry, a lawyer and leader of the UDM
(opposition), which he financed. It's G. Ollivry who introduced Appasamy
to R. Lesage, then MCB's senior manager, to help him obtain financing. R.
Lesage is the brother of the former UDM leader, Maurice Lesage. However,
Appasamy's connections aren't limited to members of the opposition, and he
is also close to Jayen Cuttaree and Nanda Bodha (tourism minister), and at
the same time has friendly ties with the MCB's number one, Pierre Guy

Ramifications in Mozambique. This affair could have ramifications in
Mozambique, where Manraj and Appamasy have interests. The two men are
partners in Belle Beach Holdings (BBH), which owns the travel agency
Espresso Tours. Other shareholders in the company are the Mozambican
president's two sons, Nyimpine and N'Naite Chissano; as well as Apolinario
Pateguana; and Egas Mussanhane, the president of Credicoop, the banking
institution that just went bankrupt in Maputo. BBH has several projects in
Mozambique. In addition to plans for a luxury hotel in Ponta de Ouro and a
conference center in Maputo, the company acquired a 6-hectare plot of land
close to Maxaquene to build a 40 -apartment development, manage a seafood
quota (400 tons of shrimp and 120 tons of fish) and own 200 hectares of
land for the construction of a luxury hotel on the cape of Sao Sebastiao
(close to Vilankulo). This is the same place that the Mozambican minister
John Kachamila, in partnership with South African entrepreneurs, has a
project that's facing opposition from the local population. (Copyright
2003 Indigo Publications)


Maputo, 28 Feb (AIM) - A key witness in the Carlos Cardoso murder
trial, the wealthy businesswoman Candida Cossa, has admitted that
she lied to the court - but claims she was coerced into doing so
by Nyimpine Chissano, the oldest son of President Joaquim
Chissano, and one of his associates, Antonio Malo.

Cossa's admission came at a hearing with the Maputo City
branch of the Attorney-General's Office on 3 January. The minutes
of that hearing have been obtained by the weekly paper "Savana",
which published them on Friday.

Cossa requested the hearing herself in order to "clarify"
questions raised during her testimony at the murder trial.

Central to the case were a series of cheques presented as
evidence by loan shark Momade Assife Abdul Satar ("Nini"), one of
those charged with ordering the murder of investigative
journalist Carlos Cardoso.

Satar admitted making payments equivalent to over 50,000 US
dollars to Anibal dos Santos Junior ("Anibalzinho"), the man who
organised the death squad that murdered Cardoso. But Satar
claimed he made the payments at the request of Nyimpine
Chissano - the money, he insisted, was a loan to Nyimpine, and it
was secured by a series of post-dated cheques, signed by
Nyimpine, and drawn on an account in the name of his rent-a-car
company, Expresso Tours.

Satar thus presented himself as a mere middleman, suggesting
that it was really Nyimpine Chissano who paid for the
assassination. Satar said he did not cash Chissano's cheques, and
handed all seven of them, totalling 1.29 billion meticais (about
54,000 dollars), to the court.

Called to the witness stand, Chissano's explanation for the
cheques was that they were security for a loan, not from Satar,
but from Candida Cossa. He claimed he could not understand why
Cossa had "negotiated" them with Unicambios, the foreign exchange
bureau owned by Satar's brother, and co-accused, Ayob Abdul

But when Cossa took the witness stand, on 6 December, she
did not corroborate this story, and started telling the court of
a series of dubious deals involving Expresso Tours, Unicambios,
and various South African companies.

6 December was a Friday, and when judge Augusto Paulino
interrupted the trial for the weekend, Cossa's testimony was far
from finished. When she went home, she found she was under
pressure to change her story.

In the 3 January hearing, Cossa said that on the afternoon
of 6 December she began to receive a series of threatening calls
on her mobile phone. So she switched it off, and fell asleep.

When she awoke, at about 20.25, she found a message had been
left by Stella Pateguana, sister of Apolinario Pateguana
("Nanaio"), one of Nyimpine Chissano's partners in Expresso
Tours, asking her to contact Nanaio urgently.

Some time later, Stella Pateguana came to Cossa's house in
person, and asked her to come immediately to Nanaio's house.
Cossa agreed, but to her surprise the destination turned out to
be the home, not of Nanaio, but of Nyimpine Chissano, where
Nanaio was waiting for them.

The two Pateguanas were acting as intermediaries, since
Cossa's relations with Chissano and Malo had deteriorated

Once in Chissano's house, Cossa found that he and Malo were
urging her to back up his story. The minutes of the hearing
state: "Nyimpine and Malo asked Candida to tell the court that
there was never any direct business between Expresso Tours and
Nini, but a business in which she (Candida) was the

Cossa said she could not do that, but promised she would try
to "attenuate" the situation in court. Which was why she told the
court on 9 December that she and Malo had taken the cheques to
Nini Satar, but in fact, according to the minutes cited by
"Savana", Cossa "knew nothing about the cheques presented by Nini
in court. She did not see how they reached Nini, and does not
know what business they referred to".

While she was in Nyimpine's house, she watched him ring up
Interior Minister Almerino Manhenje. Initially he used his normal
cell-phone, paid for by contract with the company M-Cel.
Manhenje, however, demanded that he use the more anonymous pre-
paid cards: Chissano switched to a second phone, using the pre-
paid method, and requested that Manhenje send men to protect
Cossa's house. The following day policemen were indeed stationed
on her house.

(It is more expensive to use the pre-paid cards than to sign
a contract, but the calls are less traceable, since M-Cel does
not, as a matter of course, provide detailed invoices. M-Cel
invoices for phones on contract proved very useful evidence for
the prosecution during the trial.)

After Cossa's evidence, she received further messages from
Stella Pateguana attempting to set up a meeting with Nyimpine
Chissano in Expresso Tours. But Nyimpine told her not to bring
her lawyer, Espirito Santo Monjane. Cossa consulted the lawyer,
and on his advice, did not attend this meeting.
pf/ (819)

Maputo, 7 Mar (AIM) - Despite letters from lawyers,
the independent newsheet "Mediafax" on Friday reaffirmed its
claims that, according to local residents, Nyimpine Chissano, the
oldest son of Mozambican President Joaquim Chissano, and
Mussumbuluko Guebuza, son of Armando Guebuza, general secretary
of the ruling Frelimo Party, have land in Guava, a part of
Marracuene district on the outskirts of Maputo city.

The paper reports that last Tuesday, Marracuene district
administrator Andre Wade met with the Guava population to discuss
land disputes in the area. The main such dispute concerns 200
hectares which the private "Zambeze Valley" company says has been
allocated to it for a low cost housing scheme. But half this land
has been occupied by people who claim to have bought plots there.

During the meeting, Guava residents also mentioned
Nyimpine Chissano and Mussumbuluco Guebuza. Wade told the meeting
that, as far as he knew, the land in question had been allocated
legally to Zambeze Valley, to a church, and to the office of the
first lady, Marcelina Chissano.

But the Guava neighbourhood secretary retorted that nobody
had ever told him previously that the plot in question belonged
to the First Lady's office - he said it was always Nyimpine
Chissano who visited the place, and presented himself as the

"He always told us that the land was his, and that he wanted
to build a project of a social nature", said the secretary.
"Nobody ever came in the name of the Office of the First Lady".

"It's Nyimpine that we know, and not the First Lady", he
said. "We also know Guebuza's son, who has an area here. It was
Mr Ruben who brought those two here".

In its reports of the land disputes over the past week,
"Mediafax" has claimed that the mysterious Ruben is at the
centre of the illicit buying and selling of land - illicit
because, under the Mozambican constitution, all land is state

A member of the local land commission told the meeting that
Nyimpine Chissano's plot was "large" because it was more than two
hectares in size.

Wade advised the Guava residents to treat the dispute in an
"orderly and civilised manner", and promised another meeting with
all the parties involved next week.

Also on Friday, Mediafax published letters from the lawyers
for Nyimpine Chissano and Mussumbuluco Guebuza, respectively
Jorge Oliveira and Mario Seuane, denying the claim made by the
paper last Monday that the two men quarrelled over land in Guava.

Oliveira declared "Nyimpine Chissano does not possess land
in Guava. He has not quarrelled with Mussumbuluco Guebuza, with
whom he has the most cordial relations".

The lawyer says that "any serious investigation on the
ground would prove that these statements are dishonest".

Seuane's letter describes the "Mediafax" Monday story as "a
gross attempt at disinformation, the purpose of which only its
author can explain".

Both lawyers demand a formal apology - which "Mediafax"
refuses to provide. The paper replies that the best thing the
lawyers can do for their clients is to visit Guava "so that you
can be better informed about what is going on".
pf/ (453)


Maputo, 2 Mar (AIM) - The Maputo Sunday paper "Domingo" is
sticking to its story that convicted assassin Anibal dos Santos
Junior ("Anibalzinho") was allowed out of prison in mid-February
to visit his mother, and roamed around Maputo in a Mercedes-Benz
saloon that day.

The "Domingo" story infuriated the General Command of the
Mozambican police which claimed it was "totally false", and that
Anibalzinho is in solitary confinement in a "disciplinary cell".

Anibalzinho was tried in absentia from November to January
for his part in the murder of the country's top investigative
journalist, Carlos Cardoso. He was not present at his trial,
because he had been illicitly released from the Maputo top
security jail on 1 September.

Only on 30 January did the South African police track him
down to a house in Pretoria and re-arrest him. He was extradited
to Maputo the following day.

The police statement attacked "deceitful, untrue and
distorted" news items, which, it claimed, gave the public "the
wrong idea" about the performance of the police.

In its latest issue, "Domingo" does not retract a word of
its story. Under normal rules of ethics, it points out, a
newspaper can publish a story "as long as the journalist has
obtained it from sufficient credible sources, that provide him
with the moral certainty of its truth. That is what happened with
us. There were a variety of sources, from citizens in the street
to authorities in high-ranking positions in the state apparatus,
who told us that Anibalzinho left the prison, visited his
mother's house, and travelled in a Mercedes".

"We cross-checked the sources, several journalists worked on
the story and we had the moral certainty that it was true", said
the paper.

"Domingo" believed it was its duty to publish the story,
precisely because of the indignation it would cause. for
Anibalzinho "is not just any prisoner. The court declared him an
''habitual delinquent'', and his behaviour does not lead us to
conclude that he has repented of his crime".

The paper admits that there is always the possibility of
getting the story wrong. Despite the variety of sources, in
journalism there can never be "any absolute truth of the two plus
two equals four variety". But while "Domingo" may not be the
indisputable depository of truth, "neither is the General Command
of the Police".

In questions to do with Anibalzinho, the police command is
not a reliable source, the paper says. "It is public and well-
known that Anibalzinho has enjoyed protection from the top levels
of the police", it accuses. "It is certain that before the murder
of Carlos Cardoso there were already case files against this
notorious criminal gathering dust in police drawers".

The police public relations department, "Domingo" notes, has
not seen fit "to explain why this happened inside the
organisation which should be at the fore in the fight against

Furthermore, the police have not yet explained Anibalzinho's
September "escape", although it was obvious that his cell door
could not have been opened without "police complicity at the
highest level".

Even worse, the police command, including Interior Minister
Almerino Manhenje, had been warned well in advance (by the former
head of the Maputo Criminal Investigation Police, Antonio
Frangoulis) that Anibalzinho might try to escape. "So far the
police public relations department has not bothered to inform us
why timely measures were not taken to avoid the escape, just as
it has not informed us why Frangoulis was removed from the murder
investigation", comments "Domingo".

It is also certain that a Mercedes seized from Anibalzinho
disappeared from the police car park, where it was placed on the
orders of the Maputo City court. Somehow this car found its way
from the car park to the hands of a relative of Anibalzinho, a
journey which judge Augusto Paulino, on the final day of the
murder trial, described ironically as "miraculous". This is
something else that the police have not yet been able to explain.

"It seems that the police does not know, or does not want to
know, who was the author of this ''miraculous gesture''", remarks
the paper.

The police command is equally silent on how mobile phones
continue to be smuggled into the top security prison, for the use
of Anibalzinho and of the others convicted of murdering Cardoso.
Ever since the initial arrests, in early 2001, the assassins have
never had difficulty in communicating with the outside world. The
phones can only enter the prison with police complicity,
"Domingo" points out.

The police also claim that Anibalzinho is "incommunicado" in
his disciplinary cell. But it is known that Anibalzinho, shortly
after his return to prison, came to blows with another of the
assassins, Nini Satar. How was this possible, if he was in
solitary confinement ?, the paper asks.

"Domingo" also accuses the police command of lying about the
circumstances of Anibalzinho's re-arrest. The police statement
paints the re-arrest as "joint work" between the Mozambican and
South African police forces. In fact, President Joaquim Chissano
entrusted contacts with the South African police, not to the
Interior Ministry, but to Attorney-General Joaquim Madeira, and
the Mozambican police had nothing to do with the arrest.
pf/ (873)


In November 2000, journalist Carlos Cardoso was assassinated for
investigating bank fraud. Initially there was no investigation. But there
was an international campaign, including an award by Transparency
International. Under this pressure, the killing was investigated, and in
January 2003 six people were found guilty of that murder. A similar
campaign can force an investigation of the assassination of Siba-Siba. A
key step would be a TI award, and we ask economists and all those
interested in Mozambique and in justice and integrity to sign this
petition to Transparency International.
Alan Harding, Centre for Study of
African Economies, Oxford
Joseph Hanlon, Open University

If you wish to support this petition, which will be sent to the
Transparency International office in Berlin, Germany, please reply to [
mailto:[email protected] ][email protected] by 15 March stating
your name, address (city, country) and, optionally, your professional
affiliation. Also, please circulate this petition to your friends and


"We, the undersigned, wish to support the recent nomination of Antonio
Siba-Siba Macuacua for the 2003 Transparency International Integrity
Awards. We believe that Siba-Siba would be a worthy recipient of this
reward in recognition of his outstanding courage, determination and
integrity as a government official seeking to investigate and publicise
widespread fraud and high-level corruption in the Mozambican banking
sector. We also believe that this award would play an important role in
putting necessary pressure on the Mozambican authorities to instigate a
full and comprehensive investigation into his brutal assassination on
Saturday 11 August 2001, which, to date, has been sadly lacking.

In his short career, António Siba-Siba Macuacua had already demonstrated
that he possessed the necessary qualities to be a role model for a new,
younger generation of Mozambican leaders wishing to work for a society
based upon transparency, justice and the rule of law. His assassination
was designed to send a clear message to those involved in Mozambican
public life that such a society is not achievable. By supporting his
nomination for this award and by demanding that those involved in his
murder be brought to justice, we wish to declare our solidarity with all
those in Mozambique who are working for higher standards in public life
and against the forces of crime and corruption."



Maputo, 11 Mar (AIM) - The river Save, which marks the boundary
between southern and central Mozambique, has burst its banks and
flooded the towns of Nova Mambone, in Inhambane province, on the
south bank, and Machanga, in Sofala province, on the north bank.

The governor of Inhambane, Aires Aly, on Monday made an
urgent appeal for helicopters and boats to rescue hundreds of
flood victims, who were stranded in trees and on rooftops when
the flood waters hit Nova Mambone.

After overflying the flooded areas, Aly said it is urgent to
rescue those people, who have been cut off by the waters for the
last two days. He said that at least 13,000 people have been
affected in Nova Mambone, of whom only 600 have been rescued to
safety, in the locality of Malovane.

"I overflew the area and saw that the town has been
seriously affected, houses are totally submerged, with children
and women on the treetops, awaiting rescue", he said.

There is a similar situation in Machanga. According to the
Sofala provincial director for state administration, Eduardo
Chilundo, the offices of the district administration, and many
homes have been swamped, and residents are seeking safety on
higher ground.

The road which links Machanga to the main north-south
highway has been cut, making it impossible to enter the town
overland. One of the people unable to return to Machanga was the
district administrator, Joao Bata, who had been on a visit to the
provincial capital, Beira.

The flood was caused by the torrential rain brought to the
area last week by cyclone Japhet. The save reached flood alert
levels on Sunday: the river rose in 24 hours from 5.7 to 8.05
ju/bm/pf (289)

Maputo, 10 Mar (AIM) - The Mozambican authorities have issued a
flood warning for the basin of the Save river, which forms the
conventional boundary between southern and central Mozambique.

The rise in the level of the Save has led to the evacuation
of people from the towns of Machanga and Nova Mambone, on the
northern and southern banks of the river.

According to a note received by AIM on Monday, the country's
relief agency the National Disasters Management Institute (INGC),
has made a helicopter available to the governor of Inhambane
province, Aires Aly, so that he can overfly the area and monitor
the situation.

The level of the Save has been rising since Saturday, thanks
to torrential rains in the area, brought by Cyclone Japhet, which
hit Inhambane a week ago. The cyclone has dissipated, but the
rains have continued. There are also fears of flooding in the
Buzi basis further north.

The INGC warned people living near the Save to remain on
maximum alert, and to stay away from the river's banks.
dt/pf (181)

Maputo, 7 Mar (AIM) - The number of known deaths caused by
cyclone Japhet in the Mozambican provinces of Inhambane and
Manica now stands at 11, while a further seven people are
reported missing in Sofala province, reports Friday's issue of
the Maputo daily "Noticias".

The torrential rains brought by the cyclone have also led to
the interruption, since Tuesday, of traffic along a 2.5 kilometre
stretch of the main north-south highway near Muxungue town in
Sofala. This has effectively halted toad transport between Maputo
and Beira.



MOZAMBIQUE: Serious deterioration in food security

JOHANNESBURG, 3 March (IRIN) - Two recent reports point to a serious
deterioration in the food security situation of vulnerable populations in
Mozambique's southern and central areas.

Statistics from a December vulnerability assessment indicated that about
650,000 Mozambicans required food aid to survive, but this estimate was
made before drought-related crop failure became evident.

The latest Famine Early Warning Systems Network (FEWS NET) report said
food shortages were expected to worsen over the next year.

"A near-total crop failure in some zones, following a poor harvest last
year, has been the primary cause of the current situation. Food insecurity
is most critical in remote zones where household access to food and income
is heavily dependent on rain-fed agriculture, such as the interior of Gaza
and Inhambane and southern Tete," the FEWS NET report warned.

A World Food Programme (WFP) situation report agreed that the food
security situation in the drought-affected provinces was deteriorating.
The report added that WFP was "currently assessing the food security
situation in two localities in drought-stricken Maputo province following
reports of deaths from malnutrition".

The cumulative rainfall from October 2002 to January 2003 in Maputo was
the lowest in more than 50 years, according to official statistics.

FEWS NET noted that other factors have contributed to the worsening food
security situation in southern and central Mozambique, including HIV/AIDS,
and foot-and-mouth disease that has hit livestock.

"Malnutrition rates after last year's poor harvest were already higher
than most other countries in the region. These rates are likely to
increase markedly in the coming year after households consume whatever
crops they harvest and exhaust their already weakened coping strategies,"
the early warning unit agency said.

Given that the next significant harvest in the most affected areas was not
until February 2004, FEWS NET has recommended that food aid distributions
be re-targeted.

"The food security picture has changed dramatically since the
November/December VAC [Vulnerability Assessment Committee] report. Some
districts in Zambézia, Nampula and Sofala included in the VAC report are
expecting a good harvest so the food security situation should improve
rapidly in the coming months. Scarce food aid should be diverted now to
meet more urgent needs and to avoid disincentives for producers," FEWS NET

WFP said it would continue to "monitor the situation to ensure that food
assistance is reaching the most vulnerable people".

FEWS NET added that the rapid distribution of agricultural inputs, such as
seeds appropriate for second season planting, was also crucial.


London, 7 Mar (AIM) - The US-funded Famine Early Warning
Systems Network (FEWS NET) has warned that rainfall in Maputo in
the period October to January was the lowest in more than fifty

An analysis by FEWS NET found that the current drought is
much more severe than last year's, and is similar in severity to
the 1991/92 drought.

FEWS NET has issued a warning that a growing number of
people are, or about to become, highly food insecure. The
organisation points to the more remote parts of Gaza, Tete and
Inhambane Provinces as areas of most immediate concern. The
situation is at its most critical in areas where crop failure is
combined with lack of access to other sources of food and income.

In some remote areas much of the population was already food
insecure because of last year's drought. Near total crop
failure has led people to resort to extreme measures, including
moving to nearby towns - or even across the border into South
Africa - taking children out of school, and eating dangerous or
unpalatable wild foods.

The warning stated that "a serious deterioration in the food
security status of vulnerable populations in southern and central
Mozambique is occurring and is expected to worsen over the next
twelve months. A near-total crop failure in some zones, following
a poor harvest last year, has been the primary cause of the
current situation."

It added that "Food insecurity is most critical in
remote zones where household access to food and income is heavily
dependent on rain-fed agriculture, such as the interior of Gaza
and Inhambane and southern Tete. Other contributing factors
include human, plant and animal diseases, as well as the economic
situation in neighbouring Zimbabwe".

The FEWS NET warning also claimed that malnutrition rates
"are likely to increase markedly in the coming year after
households consume whatever crops they harvest and exhaust their
already weakened coping strategies."

The organisation used data from the Maputo rainfall station
as it is one of the few stations with good historical data,
largely unaffected by war and disasters. An analysis of the
rainfall pattern shows that the October to January period has
seen the lowest rainfall since modern records started in

FEWS NET points out that the most severe drought in recent
memory was the 1991/92 drought. It compares satellite images of
vegetative growth between then and now, which show stark
similarities. FEWS NET warns of clear parallels between the two
seasons, especially for Gaza Province and elsewhere in southern

Ironically, this warning came as Cyclone Japhet hit the
coast of Inhambane, bringing torrential rain to much of
Inhambane, Sofala and Manica provinces. The rain itself is too
late to assist what harvest remains, and has in fact made
things worse.
jhu/pf (464)


Maputo, 13 Feb (AIM) - Mozambican Foreign Minister Leonardo Simao
said in Maputo on Thursday that the natural disasters that have
struck the country recently do not warrant the declaration of a
state of emergency.

Speaking to journalists during an interval in a meeting
between the government and donors on the food security situation,
Simao said "We cannot just go on making emergency appeals. We
must endow the country with its own capacities so that it can
deal with natural disasters when they strike. Any appeal will
always depend on the scale of the disaster".

This year Mozambique has faced two quite separate disasters.
In the south and parts of the centre of the country, the rains
have failed for the second year running. But in parts of the
north, there has been too much rain, resulting from the passage
of tropical depression "Delfina" in January: flimsy houses were
washed away, roads rendered impassable and crops inundated.

Based on the data currently available, Simao said the
government would continue to depend on the normal assistance from
its cooperation partners, and thought there was no need to
declare a state of emergency.

But Simao admitted that there was some international
pressure on the government to declare an emergency. Certain
institutions (which he did not name) "depend on emergency funds",
said Simao, "and when the government does not declare an
emergency, these institutions don't have access to that money".

"So a perverse effect is created. You have to declare that
an emergency exists, even when it doesn't, in order to enable
these institutions to have access to money", said the Minister.
"But we can't use that as a criterion. The criterion must be the
scale of the disaster. Because if you declare a state of
emergency, without the proper justification, then you begin to
lose credibility, and on the day when there is a really serious
catastrophe, nobody will help you".

The latest assessment made by the vulnerability committee,
formed by representatives from the government and the donors, is
that there are about 655,000 people who may need food aid before
the next harvest.

This is actually much fewer than the numbers in the
contingency plans drawn up by the government last year. "When we
made our estimates last year, these indicated that 1.2 million
people might need food aid", said Simao. "But the number of
people affected is less than we envisaged".

Simao denied that there was any reluctance on the part of
donors to channel food aid to Mozambique. "Food stocks are going
to arrive gradually", he said, "since our estimates are for the
period up to April. Food aid has never all arrived at the same
time. It's always been gradual".

Mozambique was already receiving aid for the victims of
drought in the southern and central provinces. But needs have
increased with the damage done by "Delfina" north of the Zambezi,
particularly in Nampula province.

The known death toll from "Delfina" was 46 in Nampula, three
in Zambezia and one in Cabo Delgado. About 35,000 homes were
destroyed in Nampula, and a further 5,000 in Zambezia and Cabo

"Every effort is being made to restore the access roads, to
allow support to reach the affected areas", said Simao, "and to
help people rebuild their houses".

But the second year of drought south of the Zambezi means
that this year's harvest will not provide the hoped-for relief.
The current projections are that, in the commercial year that
begins in April 2003, the number of people in need of food aid
will rise to 1.475 million, well over twice the number currently

The director of the government's relief agency, the National
Disaster Management Institute (INGC), Silvano Langa, told the
meeting that the country has 15,000 tonnes of food aid available,
which is only enough for the next two months. He thought that a
comfortable figure, that would cover all needs until the next
harvest (April/May) would be 25,000 tonnes.

As for the future, Langa estimated the requirements for the
2003/04 commercial year at 32 million US dollars.
dt/pf (676)

UN Integrated Regional Information Networks (IRIN)
January 20, 2003

Southern Africa's food crisis is not a short-term transitory
phenomenon that will be over when this year's harvest is gathered.
It points, instead, to a failure of development policies and the
impact of HIV/AIDS, for which there are no easy solutions,
humanitarian officials acknowledge.

Over 14 million people in six countries are at risk through a
combination of poverty, the HIV/AIDS epidemic, government policy
mistakes, and the collapse of social services and traditional
safety nets. UN agencies and NGOs have called for a rethink of
development strategies and partnerships that can help lift the
region's subsistence farmers out of chronic food insecurity.

Although the immediate humanitarian response "has gone someway to
stabilise the situation ... the outlook is clearly not good and
there are not many reasons for hope," Chris Kaye, the Regional
Disaster Response Advisor of the Office for the Coordination of
Humanitarian Affairs said.

By the end of December the food component (US $507 million) of the
UN's US $611 million consolidated appeal for the region was only 62
percent funded. Donors were even less generous towards non-food
projects, providing only 20 percent of the money needed. An
anticipated El Nino year in 2003 threatens another drought, but
that is likely to be overshadowed by the expected war in Iraq,
which will divert attention from the Southern Africa crisis, Kaye


The humanitarian response of providing food aid "will not solve the
problem because the underlying causes of the HIV/AIDS pandemic will
not make this famine a normal famine. There is no end to it because
people are too weak to plant, too weak to harvest so this will go
on. The problems don't go away with better weather. That means the
response of governments and the international community make must
recognise that," Urban Jonsson, the UN Children's Fund (UNICEF)
Regional Director for Eastern and Southern Africa told IRIN in

"There are no answers at the moment," Michael Drinkwater, the
regional coordinator of the development NGO CARE International
conceded. "We are looking at a situation where countries will need
ongoing assistance for many years to come in agriculture, health,
at the macro-economic level ... Throwing money at it is not going
to help, we need to work much more strategically."

The failure of rains over two consecutive seasons should not have
precipitated a crisis as deep as the region has now experienced.
The current emergency, therefore, points to a slow erosion of
people's coping mechanisms exposing a more deep-seated and complex
problem of vulnerability. According to UNICEF, for example, 59
percent of Zambian children under five were already malnourished in
2000. In Malawi it was 49 percent, 44 percent in Lesotho and 27
percent in Zimbabwe.

Even under normal conditions, subsistence farmers in Malawi can
only grow 90 percent of their food needs. From December until the
next harvest in March, many eke out an existence by providing
casual labour known as "ganyu" within the community, using money
earned to buy food on the market. But if the planting season has
been poor, labour opportunities dry up and the price of food on the
market rises.

"That daily wage rate has not changed in five years, it's about 20
kwacha [US 27 cents] per day. But the inflation rate in Malawi has
been outstanding. So you have this inflation rate, to which all the
other prices get adjusted accordingly - fuel transport, maize
prices, they're all directly linked. But the casual labour rate
hasn't budged - it's a precarious situation," Nicholas Haan,
Regional Programme Advisor of the World Food Programme's (WFP)
Vulnerability Analysis and Mapping unit told IRIN in June.



But at the policy level, there is also little room for new thinking
by African governments. They are constrained by the "Washington
consensus" on market reforms championed by the World Bank and
International Monetary Fund (IMF) as the ideologically correct
development path. It frowns on government intervention, and looks
at short-term financial considerations rather than medium-term food
security, critics argue. The debt burden also robs governments of
development resources.

The role of the state has been downsized - it is no longer that of
a food security guarantor, however inefficiently it operated in the
past. Subsidised inputs such as fertiliser were stopped, social
services starved of funds, and the commodity boards that fixed
producer prices and collected farmers' produce abolished. They were
supposed to have been replaced by the private sector, but in most
cases local entrepreneurs could not rise to the challenge or lacked
the profit incentive to reach the more remote regions.

The poor, for the most part, are now on their own. "The reform
programmes, yes are necessary, [but] they are painful ... I think
we need some contingency plans in order to minimise the worst
effects," said Mugwara. [Reggie Mugwara, the director of the Southern
African Development Community (SADC) Food and Natural
Resources Unit.] "You can't go back to the old ways, but we
cannot also ignore the present realities ... that the vulnerable
are much more vulnerable than they were."

Smallholder agriculture, the predominant source of livelihoods in
Africa, had proved to be at least as efficient as large farms when
farmers received similar support services in inputs like seeds,
fertiliser and credit, the International Food Policy Research
Institute (IFPRI) said in a report last year. Raising their output
would stimulate the rest of the economy. Each 1 percent increase in
agricultural productivity had been shown to reduce poverty by 0.6
percent, the institute said.

But public investment in African agriculture has been falling for
many years. World Bank lending for agriculture slumped from about
31 percent of its total lending in 1979-81 to less than 10 percent
in 1999-2000. The funding levels required to boost agriculture
"depart sharply from recent trends", IFPRI acknowledged.

In a report on the food crisis released in June, Oxfam warned that
until the right to food was put at the top of the agenda of
international financial institutions and national governments, food
security would remain precarious. It said Africa needed policies
that were carefully thought-out and implemented, and not driven by
dogma, political opportunism or hypocrisy.

"At the same time as African farmers are told that they can no
longer have free seeds or fertilisers, US farmers are receiving an
average US $20,000 a year in subsidies - which is soon to increase
by 70 percent - and EU [European Union] farmers US $16,000," noted
the briefing paper.

It cited an IMF evaluation that found that in Zambia between 1991
and 1994, the liberalisation of state marketing had contributed to
a 30 percent increase in rural poverty. "It is clear that without
some form of state intervention as a safety net, poor people have
become much more vulnerable to shocks such as erratic weather.
Unfortunately, the IMF and other donors are not learning this

African countries also face gigantic hurdles in establishing an
agro-export economy to trade their way out of poverty, due to
tariff barriers and produce dumping by European and US producers.
"Rich countries spend vast sums of money protecting the interests
of their producers, while at the same time forcing poor countries
to open their markets to subsidised imports," Oxfam argued.

Chris Kaye believes that both regional governments and the
international community need to reform the way they operate, and
develop a "compact" on the way forward.

"Governments must wake up to their responsibilities and show they
are caring for their own people, because if they don't, no
self-respecting donor will do that for them." By the same token, he
said, the depth of the problems confronted by the region required
a "much more concerted effort by donors ... otherwise Southern
Africa will go down the tube".


Maputo, 3 Mar (AIM) - The first sitting in 2003 of the Mozambican
parliament, the Assembly of the Republic, began quietly on
Monday, since the main opposition party, the former rebel
movement Renamo, did not implement its threats to continue
disrupting parliamentary sessions.

In December, Renamo rioted for four consecutive days, at the
end of the previous parliamentary session. It was demanding that
five Renamo dissidents, including a former head of the Renamo
parliamentary group, Raul Domingos, be expelled from the

When this issue was put to a vote, and Renamo lost, the
Renamo deputies went berserk, shrieking, chanting, banging on the
tables and wrecking the Assembly's sound system. They threatened
that this would continue into the first sitting of the New Year,
and that Renamo would not halt its disruptive behaviour until the
five dissidents were thrown out of parliament.

But on Monday not a whistle was blown, not a table was
thumped, not a slogan was chanted: Renamo was on its best
behaviour for the formal opening of the sitting - perhaps because
of the presence of the diplomatic corps in the public gallery.

Even more surprising, the leader of the Renamo group, Ossufo
Quitine, did not so much as mention the five dissidents, who have
successfully demanded the status of "independent deputies",
during his lengthy speech.



Maputo, 3 Mar (AIM) - Mozambique's main opposition party, Renamo,
on Monday performed a somersault in its attitude towards the
trial of the six men found guilty of murdering Mozambican
investigative journalist Carlos Cardoso.

Two months ago, Renamo leader Afonso Dhlakama issued a
statement praising the trial - yet on Monday, in his speech at
the opening of a sitting of the Mozambican parliament, the
Assembly of the Republic, the head of the Renamo parliamentary
group, Ossufo Quitine, dismissed the trial as "a farce".

Quitine claimed that the sentence in the trial, read out on
31 January by judge Augusto Paulino, had been written before the
trial even began. There can hardly be a more serious defamation
against a judge.~~~


"Those who really ordered the murder of Carlos Cardoso have
not been found", claimed Quitine. "It was all a piece of


Quitine also claimed that the ruling Frelimo party is
already engaged in fraud to win this year's municipal elections.
The only example of "fraud" that he cited was the election of
Lutheran pastor Arao Litsuri as chairman of the National
Elections Commission (CNE).

Litsuri won with the votes of the ten CNE members chosen by
Frelimo, against the eight chosen by Renamo. So Renamo has
redefined fraud to mean any vote that goes against it.


Maputo, 28 Feb (AIM) - Antonio Carrasco, director of the
Electoral Administration Technical Secretariat (STAE), the
electoral branch of the Mozambican civil service, acknowledged on
Thursday that municipal elections in Mozambique are behind
schedule, but he assured reporters that they will be held before
the end of this year.

Addressing journalists during a seminar on electoral
coverage, organized by the Mozambican Journalists Union (SNJ),
Carrasco explained that STAE needs at least six months to
organize all the stages in the electoral process, starting from
the announcement of the election dates up to the voting itself.

The first municipal elections were held on 30 June 1998, and
the mayors and municipal assemblies elected then had a five year
term of office. So the second elections ought to be held in June
of this year: however there is simply not enough time before June
to do all the preparations that are necessary

"We are now at the end of February, and it is technically
impossible to organize the municipal elections in just four
months", said Carrasco. "We have timetables strictly established
by law, that we cannot violate".

He noted that there is an established period for the
electoral campaign, for the submission of candidates, and other
procedures. Furthermore, the electoral registers have not been
updated since 1999.

Carrasco said that only on Wednesday did STAE submit its
work plan to the National Elections Commission (CNE), the body in
overall charge of the elections. The CNE must now study that
proposal, and decide whether to endorse it.

The exact dates of elections are fixed by the government,
but on the proposal of the CNE. In practice, the government will
simply endorse the date suggested by the CNE.

Carrasco said that STAE is suggesting that the update of the
electoral registers take place in July, and the election be held
in August. However, according to reports on Mozambican
Television, it is more likely that the elections will be
postponed into November, or even early December.

Carrasco said that around 70,000 people will be working as
electoral staff, "and the priority is the training of staff for
the electoral bodies. We are going to train trainers at national
level, who will be recruited through public advertisements in the
media. National trainers will train others at district level, and
the latter will do the same at local level".

As for funding, Carrasco said that the government has, so
far, disbursed only 18 per cent of the 25 million US dollars
necessary. "What we know is that the government is working to
raise financial support from its international partners", he

Carrasco added that extra money might be needed for an
eventual second round in some of the municipalities, should none
of the candidates for mayor win an outright majority on the first

Carrasco's assessment of the timetable is not to the liking
of the main opposition party, the former rebel movement Renamo,
which has instantly claimed that Carrasco does not have the legal
power to determine the dates of the elections.

"Carrasco's past his expiry date. He shouldn't be in STAE
any more", declared Renamo spokesman Fernando Mazanga. He pointed
out that the CNE must appoint a new director of STAE, after
seeking candidates through publicly advertising the job.

This is true, but, until somebody else is chosen, Carrasco
remains director, and has the duty to advise the CNE on such
matters as electoral timetables. And there is nothing to stop
Carrasco applying for the post when it is advertised.

The delay in the municipal elections is entirely due to
Renamo's obstructionist tactics last year in the country's
parliament, the Assembly of the Republic, where it delayed
amendments to the electoral legislation until September, and the
appointment of a new CNE until December.
mu/bm/pf (633)

Maputo, 14 Mar (AIM) - Mozambique's ruling Frelimo Party has
appointed Political Commission member Alcinda Abreu the new head
of its election office.

She replaces Mariano Matsinha who ran the party's election
office for both the 1994 and 1994 general elections.

Abreu was Minister for Social Welfare Coordination from 1994
to 1997, when she was sacked by President Joaquim Chissano.
However, she seemed fully rehabilitated by the time of the
Frelimo Eighth Congress in June last year, when she was elected
to the 15 member Political Commission.

Abreu has plenty of electoral experience. She was a Frelimo
appointee to the National Elections Commission (CNE) in 1997/98.
This was the body that organised the country's first municipal
elections. Frelimo chose her again for the 1999 CNE, which was in
charge of that year's presidential and parliamentary elections.

Frelimo is preparing its electoral machinery months before
this year's local elections. No date has yet been fixed, but the
elections cannot possibly be held earlier than August.

Frelimo general secretary Armando Guebuza has been
travelling round the country preparing the ground for the party's
election campaign. Officially, Frelimo exudes optimism:
interviewed in the latest issue of the weekly paper "Savana", the
Frelimo Central Committee secretary for mobilisation and
propaganda, Edson Macuacua, predicted "a resounding victory", in
both the municipal elections, and in next year's general

"Comrade Armando Guebuza enjoys great popularity among the
party members", he said. "We are working to keep up the
enthusiasm of our militants". He guaranteed that Frelimo would
not make "triumphalist" mistakes, as its opponents hoped.

Victory for Frelimo in the elections was "a national
imperative", said Macuacua, "because Frelimo is the only force
for change, and because Frelimo has a clear mission to combat
absolute poverty".

Macuacua denied that Frelimo has chosen any candidates yet
for the municipal elections. "There's a very strong internal
democracy in our party", he said. "Our candidates will emerge
from a transparent process. They will be chosen as a result of
the projects for work that they present".

Frelimo would shortly hold municipal electoral conferences
to choose its candidates. "Party members are free to put
themselves forward", said Macuacua.
pf/ (358)


Maputo, 5 Mar (AIM) - If one leaves aside mega-projects such as
the MOZAL aluminium smelter, Mozambican industry is stagnating,
or even declining, warned prominent economist Carlos Castel-
Branco on Wednesday.

Speaking at the Seventh Annual Conference of the Mozambican
public sector, Castel-Branco said that the country's economy
remains unstable, and plagued by structural problems that cannot
be addressed merely by monetary measures.

The weight of manufacturing industry added value in the
gross domestic product has changed very little over the past four
decades. It is currently just 13 per cent - and much of that is
accounted for by MOZAL. Without MOZAL, this figure would be the
same as in 1961.

Castel-Branco said that industry is excessively concentrated
in just a few sectors. MOZAL's aluminium ingots, plus the food,
drink and tobacco industries amount to over 80 per cent of
industrial production. Engineering and chemical industries only
account for seven per cent of production and this figure is
rapidly shrinking.

This level of concentration has been increasing. The ten
main products accounted for 50 per cent of industrial production
in 1959. In 2001 ten products accounted for 80 per cent of
production. What had once been key industrial sectors (such as
cashew processing) have virtually disappeared, and the only
significant new product added to Mozambican industry in recent
years has been the aluminium ingots of MOZAL.

Excessive concentration can also be found within each
industrial sector. Thus 75 per cent of production in the textile
and clothing sector is simple cotton ginning.

"There are no substantial signs that new dynamics and new
capacities are being created to diversify and broaden the base of
development", Castel-Branco warned. "Outside of the mega-projects
(which are very localised with few economic linkages), there is
little to show change and transformation".

It was certainly true that Mozambican GDP had grown - but
this growth was not such as to generate new technological
capacities, or promote a broadened and diversified production
base. "Above all, this growth is continuous only in some sectors,
and in most others it is occasional, momentary or non-existent",
said Castel-Branco.

Furthermore, the Mozambican economy remains highly dependent
on imports, with a heavy deficit on the balance of trade.
Whenever investment expands, imports are sucked in, and the
balance of payments goes into crisis. This, Castel-Branco argued,
showed structural instability in the economy.

Apolinario Panguene, a consultant for the Confederation of
Mozambican Businesses (CTA), pointed out that about 30 per cent
of Mozambique's small and medium sized industries closed down or
changed their activity between 1998 and 2002. Of those that still
exist, "many are moribund", he said.

Although MOZAL and other mega-projects had increased the
country's exports, and in the long run improved the balance of
payments, "they are not the solution for reducing absolute

Panguene said the mega-projects create relatively few jobs,
and those jobs are expensive. On average, each job in a mega-
projects "has cost between one and two million dollars, while the
average cost per job in older investments was 15,000 dollars".

Outside of the mega-projects, industry is, at best, just
ticking over. On average, industry uses just 51 per cent of its
installed capacity, said Panguene.

Among the range of problems facing Mozambican industries
were the prohibitive interest rates charged by commercial banks,
and the lack of sufficient alternative sources of funding.

Transport costs, whether by road or sea, between the north
and south of the country were enormous. Companies also had to
deal with unreliable water and electricity supplies, obliging
them to make additional investments in emergency generators and
their own wells.

Panguene also pointed to the lack of skilled Mozambican
labour. This could be overcome by recruiting foreigners from
neighbouring countries, but bureaucratic obstacles are thrown in
the way of such recruitment which must be approved by the Labour

Panguene summarised that industry faces "a poor business
climate caused by administrative barriers, defective
infrastructures and unsatisfactory public services". Furthermore,
the government lacked an industrial policy aimed a "technological
development and increased productivity".
pf/ (672)