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Despite Dhlakama’s positive response to President Nyusi’s request to create a joint commission tasked with preparing the

terms of reference for the resumption of dialogue (pages 68-69) there have been further attacks on buses (pages 79-80).

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Return to Contents Page

TABLE OF CONTENTS

BUSINESS INDEX .......................................................................................................... 8

ECONOMY & BUSINESS ............................................................................................. 11

GRAPH 1: MOZAMBIQUE CURRENCY EVALUATION ......................................... 11

Macro-Economy: ...................................................................................................... 12

How can Mozambique manage its debt crisis? .......................................................... 12

Mozambique can’t make US$178 million payment on secret loan ............................. 14

Mozambique can hardly avoid asking for IMF help – Coface chief economist ........... 14

IMF wants to work with Mozambican authorities to assess implications of undisclosed

debt ............................................................................................................................ 15

IMF to send delayed mission to Mozambique in June................................................ 16

Phantom tuna fleet leaves Mozambicans on the hook ............................................... 16

Exposing the global links of secret Mozambique financial deals ................................ 18

“Fundamental change is essential for Mozambique” – João Mosca .......................... 21

President sets off for China at a delicate point in time ............................................... 22

Chinese financing in Mozambique: the other side of the coin .................................... 24

Now is the time to invest in Mozambique – President Nyusi tells Chinese business

people ........................................................................................................................ 25

Global Strategic Partnership between Mozambique and China ................................. 26

Mozambique’s benchmark lending rate remains unchanged at 12.75% .................... 27

Mozambique’s economy slows to 5.3% in the first quarter of 2016 ............................ 28

Banco de Moçambique suggests review of 2016 economic targets ........................... 28

Cost of living increases again in Mozambique ........................................................... 29

Strengthening rand increases Mozambique’s food import prices ............................... 30

Deputy Minister Mondlane in Rome for Italy-Africa conference ................................. 31

Africa now more partial to IMF in times of distress ..................................................... 31

African growth story is still on the move ..................................................................... 33

Click on a title to follow the link to the related articles. To return to the Contents Page, click on the link

at the top-right hand corner of the page.

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Reserve Bank cuts South Africa’s growth target ........................................................ 36

Financial Services:................................................................................................... 36

Renaissance Capital moves into Mozambique in deal with Dominio ......................... 36

Banco Terra de Moçambique registers first positive results ....................................... 38

Barclays Africa division weighs joint venture with Barclays plc .................................. 38

Opinion: can corporate governance cushion Africa’s investors against commodity

slump? ....................................................................................................................... 39

Oil and Gas: .............................................................................................................. 40

“State oil firm could do more for economy” – Prime Minister Rosário ........................ 40

South Africa establishes LNG import unit for gas-to-power programme .................... 41

South Africa, not Mozambique, to industrialise with Mozambican gas – Hanlon ........ 42

Gas industrialisation could be a game-changer, say industry players ........................ 42

Manuel Cuambe appointed Non-Executive Director of Sasol .................................... 43

ENI invested US$37 million in Mozambican social projects over a five-year period .. 43

Mining: ...................................................................................................................... 44

Government discusses falling mineral prices with industry ........................................ 44

Mustang Resources letter to shareholders: development strategy and Share Purchase

Plan ............................................................................................................................ 45

The commodity that no one knows about but everybody wants to buy ...................... 47

Premier African in limestone play ............................................................................... 48

Former Pemba mayor digs in over illegal excavation ................................................. 49

Energy: ...................................................................................................................... 49

Power trading in Africa can drive electricity sector over next five years ..................... 49

Cahora Bassa exceeds first quarter production target ............................................... 51

Cabo Delgado and Zambézia reduces energy deficit ................................................ 52

Transport & Construction: ...................................................................................... 52

Armando Guebuza wants his own airline ................................................................... 52

Maputo-Katembe Bridge: a project that inspires ........................................................ 52

Locations fixed for Maputo Ring Road’s five tollgates ................................................ 53

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Portuguese construction companies say that Mozambique remains a promising

market ........................................................................................................................ 54

Agriculture: ............................................................................................................... 55

Mozambique firm to invest US$12 million for developing rubber production .............. 55

Other: ........................................................................................................................ 55

Graça Machel wants to be queen of business ........................................................... 55

Mozambique earned US$193 million from tourism last year ...................................... 56

Businesspeople argue that human resource development is “fundamental” for

Mozambique .............................................................................................................. 57

AfDB: ease visa rules to promote trade and tourism .................................................. 57

Matchedje Motors donates four vehicles to Maputo police ......................................... 59

POLITICS ...................................................................................................................... 60

Mozambican government apologises for undisclosed debts ...................................... 60

Parliamentary hearing on the government’s undisclosed debt ................................... 60

Frelimo accuses Western countries of “importing Springs” to Mozambique ............... 63

Former president’s son implicated in Ematum, Proindicus and MAM weapons

purchase .................................................................................................................... 63

Political parties organise demonstration in repudiation of debt situation .................... 65

Force of arms must not be used for political goals ..................................................... 67

Portuguese President acts as negotiator and upsets the generals ............................ 68

Dhlakama appoints team to prepare meeting with President Nyusi ........................... 69

MDM questions the “many shadows” over resumption of peace talks in Mozambique

................................................................................................................................... 70

EU spokesperson on the appointment of negotiation teams for the peace talks in

Mozambique .............................................................................................................. 71

Friends of Mozambique should help the debate, but not mediate – Andrea Riccardi 71

“There is no reason to resort to violence in the country” – Macamo .......................... 72

“Defects remain in district administration” – President Nyusi ..................................... 72

President Nyusi in China - Official programme .......................................................... 73

Paulino Macaringue appointed Ambassador to Madagascar ..................................... 76

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Mpumalanga Director-General to lead technical delegation to Mozambique ............. 76

South Africa denies entrance to Mozambicans holding emergency certificates ......... 77

Authorities suspend granting of Mozambican citizenship ........................................... 77

SECURITY .................................................................................................................... 78

83 summary executions in Manica, Sofala, Tete and Zambézia ................................ 78

Government acknowledges criminal aspects in the case of the 13 bodies discovered

in Manica .................................................................................................................... 79

Renamo wants inquiry into possible police death squad ............................................ 79

Renamo attacks leave three dead in Zambézia and Manica ...................................... 80

Three die in Renamo attack against Correios de Moçambique bus ........................... 81

Renamo member escapes alleged assassination attempt in Manica ......................... 81

Renamo men kill chief of Samoa town ....................................................................... 81

General Weng San ‘secretly’ in Zambézia ................................................................. 82

Government pledges continuing support for PRM’s peace keeping efforts ................ 82

Nanjing Military Academy impresses President Nyusi ............................................... 82

CRIME ........................................................................................................................... 83

MAP 1: KIDNAPPING INCIDENTS IN CENTRAL MAPUTO 2014 – 2016 ............. 83

GRAPH 2: REPORTED KIDNAPPINGS PER YEAR ............................................. 84

GRAPH 3: TIME OF KIDNAPPINGS 2014 - 2016 .................................................. 84

GRAPH 4: KIDNAPPINGS PER GENDER / AGE-GROUP 2014 - 2016 ................ 85

Governor Auade challenges police to arrest those who kidnap and murder albinos .. 85

50 arrested in Nampula over crimes against albinos ................................................. 86

Albino grave exhumed in Tete ................................................................................... 86

PRM arrest eight suspected robbers in Beira ............................................................. 87

Elderly man kills wife and commits suicide in Maputo ................................................ 87

Mother arrested for beating her child to death in Gaza .............................................. 87

Body discovered in Ferroviário area, Maputo ............................................................. 87

Two Portuguese nationals held on forgery charges ................................................... 87

Internet facilitates organised crime in Mozambique, analysts say .............................. 88

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HUMAN RIGHTS, SOCIAL DEVELOPMENT AND NGO’S ......................................... 89

EU will continue projects despite withholding aid ....................................................... 89

Mozambique wrestles with drought, debt and conflict ................................................ 89

UNHCR needs US$15 million for Mozambican refugees ........................................... 90

More than 900,000 drought victims waiting for food assistance in Mozambique ........ 91

Mozambique and Swaziland partner in fight against drought ..................................... 92

IFRC pledges CHF110 million to help drought-stricken Southern Africa .................... 92

SADC regional situational update on El Niño-induced drought .................................. 93

Zimbabwe drought: five million face food shortages .................................................. 95

EU and UNICEF provide €30 million to tackle child malnutrition in Mozambique ....... 95

WILDLIFE AND ENVIRONMENTAL PROTECTION .................................................... 96

South Africa misses rhino conservation opportunity ‘of a lifetime’ .............................. 96

South Africa conviction rate ‘pitiful’ for rhino crimes? ................................................. 98

Ivory sales by Zimbabwe and Namibia could ‘create demand spike’ ....................... 100

Elephant numbers continue to decline in Mozambique despite anti-poaching efforts

................................................................................................................................. 102

Mozambique mulls tax on charcoal use ................................................................... 102

HEALTH ...................................................................................................................... 103

Health authorities roll out yellow fever checks, vaccination for travellers ................. 103

Consumption of sweet potatoes promoted to combat chronic malnutrition .............. 104

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BUSINESS INDEX

Abu Dhabi Mar 20

AfDB 31, 57, 58

African Medical Investments 20

Agriterra 20

Anadarko 12, 13, 42

Anglo American 47

Apollo Global Management LLC 47

Argonaut Securities Pty. 48

Atlas Mara Ltd. 37

Banco de Moçambique 12, 19, 27, 28, 29, 30

Banco Terra de Moçambique 38

Bank of America Corp 48

Barclays 38, 39

Barrick Gold Corp. 48

BPI 24

Carlyle Group LP 37

Charlestrong Engengharia, Tecnologia e Consultoria 57

Cheniere Energy 41

China Molybdenum Co. 47

China National Oil Company 74

China Road and Bridge Corporation 23, 52

China Tong Jian Investment 60

CNPC 27

Coface 14

Companhia Brasileira de Metalurgia e Mineração 47

Constructions Mecaniques de Normandie 17

Correios de Moçambique 81

Cradle Resources Ltd 47

Credit Suisse 12, 16, 17, 18, 19

Deca 20

Devex 93

Dominio Capital Group 36

EdM 43

Electrotec 52

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Ematum 12, 13, 17, 19, 29, 30, 62, 63

Energy Aspects 41

ENH 27, 42

ENI 13, 42, 43, 44

Etrago 70, 81

Eurochem Group AG 48

ExxonMobil 37

Fitch Ratings Ltd. 14

GAPI Sociedade de Investimentos SA 48

Gemfields 45, 46

Geonext 54

Gigawatt 50

GIPS 61

Global Witness 19, 20

GSMA Intelligence 34

Happy Valley Resort 92

HCB 51, 52

Hega 55

Holding Mozambique 55

IMF 12, 13, 14, 15, 16, 17, 18, 21, 22, 30, 31, 32, 34, 35, 37, 61, 62, 63, 74

Intelec Holdings 52, 56

Investec Plc 48

IPIM 57

IWI 64

Jin Rong Foodstuff Co. 74

Jinan Rolling Stock Company 74

King Shaka Aviation 52

Legend Aviation 52

Linhas Aéreas do Zambeze 52

Magris Resources Inc 48

MAM 12, 14, 16, 29, 30, 61, 62, 63

Maputo SUL Development Company 53

Matchedje Motors 59, 60

McKinsey Global Institute 32, 33

Mercury - Visabeira 54

Metal Bulletin Ltd 47

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Mosaic Co. 48

Mota-Engil, 54

Mozbife 20

Msumbiji Investiments 64

Mustang Resources 45, 47

Nagi 70, 80

NamPower 51

Nedbank Group 39

Petromoc 40, 41

Premier African Minerals Ltd. 48

Privinvest 20

Proindicus 12, 14, 19, 29, 30, 62, 63

RBC Capital Markets 48

RenCap 36, 37, 38

Rwanda Development Bank 58

Sasol 43, 50

SK Group 64

South African Reserve Bank 36, 39

South32 Ltd 48

Standard Bank 49, 50

Standard Chartered Bank 32, 64

TCT Industrias Florestais Ltd. 48

Timabes AG 64

Transport Commodity Trading Mozambique Ltd. 48

UraMin 48

Valartis Bank 64

Vale 47

Vodacom 56

VTB 12, 16, 17, 18

Whasintelec 55

Whatana Investment Group 55

World Bank 22, 28, 31

X2 Resources 47

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ECONOMY & BUSINESS

Mozambique Exchange Rate and Fuel Prices: 20 May 2016

GRAPH 1: MOZAMBIQUE CURRENCY EVALUATION

Mozambique Fuel Prices

Fuel Type Price Per Litre

Petrol 47,52MT

Diesel 36,81MT

Prices only valid for Maputo, Beira and Nacala

Mozambique Metical (MZN) Exchange Rate

Currency Buy Sell

Euro (EUR) 58,26 59,44

U.S. Dollar (USD) 52,00 53,06

S.A. Rand (ZAR) 3,30 3,36

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Macro-Economy:

How can Mozambique manage its debt crisis?

Mozambique President Filipe Nyusi’s official trip to China comes as his government faces its greatest test since the end of the civil war in 1992. Undisclosed loans and debt, worsening armed conflict with the former rebel group Renamo and bad drought in the south and centre of the country highlight the fragility of the Mozambican state.

Over the last month, six previously unacknowledged loans worth US$1.482 billion have been revealed by the government. Added to a dubious US$850 million loan to the Ematum company for a tuna fishing fleet (that included US$500 million worth of maritime security vessels), Mozambique has at least US$2.32 billion of new commercial debt to pay back. These loans make up 17% of a foreign debt burden of US$9.89 billion – up 20% a year over the last five years and now over 90% of gross domestic product (GDP), according to the International Monetary Fund (IMF).

According to the Banco de Moçambique, foreign currency reserves decreased to US$1.8 billion in April. Mozambique’s currency, the metical, will further decline and inflation – already at 13% – is on the rise. Ratings agencies have downgraded Mozambique and a possibility of a sovereign default in 2016 is increasing as the interest costs alone on the debts are over US$200 million; the annual debt service costs are likely to be as high as US$500 million.

Borrowing peaked in 2013 and 2014 during the tail end of the previous administration of Armando Guebuza. It

was based on an assumption that Mozambique would quickly become a global gas exporter. The loans to Ematum, Proindicus (US$622 million) and Mozambique Asset Management, MAM, (US$535 million) all provided for maritime security and logistics for gas projects to private companies linked to the Mozambican intelligence agency.

Nobody anticipated the dramatic slump in commodity prices and, worryingly, lessons from the global financial crisis seem not to have been learned, given the predatory lending by Credit Suisse and VTB Bank. All of these loans also broke Mozambique’s own budgetary ceilings and agreements with donors. None of Mozambique’s institutions were consulted.

The banks are not the only ones to blame. Oil and gas company Anadarko talked up their prospects of gas production by 2020, but no final investment decision (FID) has been announced. The IMF also predicted that Mozambique’s economy could grow by over 24% from 2021 because of gas – adding to the anticipation. There are also four suppliers’ credits valued at US$221 million issued to an undisclosed country for military equipment from 2009 to 2014 by the Ministry of the Interior.

Belief that over US$100 billion was being invested into gas prompted the country’s elites to seek to carve out their share. Promises of riches from gas – and to a lesser extent coal – also partly explain the renewed conflict with Renamo and the fragmentation of the party of government Frelimo.

Due to the lack of credible institutions in Mozambique, personality and elite politics have got out of control. The armed conflict with Renamo resumed in late 2015 and has seen 11,000 Mozambicans fleeing to

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Malawi as refugees, several hundred dead and over 500 injured – far worse than the mini-insurrection of 2013-14. Efforts to mediate or find a military solution to the conflict with Renamo have not worked. In late 2015 the government, or factions within it, tried to humiliate at best, or even kill the Renamo leader twice. Not surprisingly there is an acute lack of trust between both sides.

Investors are now questioning whether Mozambique should attract more of their capital. FDI fell by 24% in 2015, and 14 donors and funding agencies suspended their direct budget support in April, threatening the US$467 million in aid pledged for 2016 – 12% of public expenditure. The IMF has raised its risk profile for lending to Mozambique to ‘high’ which, along with ratings agency downgrades, has made borrowing from the market much more expensive.

Mozambique’s debt burden is likely to also impact other projects, including plans for the US$6 billion, 2,600-kilometre African Renaissance Pipeline from northern Mozambique to South Africa.

This gas pipeline will be funded mostly by Chinese banks and officially – if unrealistically − could be operational by 2020. China is Mozambique’s largest bilateral creditor so what transpired during President Nyusi’s first official visit to Beijing between 16 and 21 May is significant − more borrowing, however welcome in the short term, would make Mozambique’s total debt burden even more unsustainable.

The key challenge for Mozambique will be meeting its financial liabilities, and rebuilding trust with its international development partners and investors. Tax from any sale of gas equity or acreage

may help a bit, putting further pressure on Anadarko to clarify when it will reach its FID. But new loans based on gas futures − including from China − will not be enough. The government will need to significantly cut back on its spending and consider privatising assets, in addition to renegotiating repayment terms of the other loans.

Already facing an acute liquidity crisis, with growing uncertainty over its ability to pay its bills, and the cost of bread and other goods rising, officials are worrying about a repeat of the urban riots of 2010. President Nyusi is struggling with least-worst options. Cleaning up the bad debts of the Guebuza era is painful but achievable − coming clean on Mozambique’s current debt burden is a good start.

Further gas investments will also help. Frelimo factions compromised in February, allowing the government to approve the plan of development for another major gas investor, ENI, for its Coral FLNG project. This is a key step towards a FID. This helped the Ematum loan to be restructured from 2020 to paying the full principal amount in 2023, when Coral FLNG is operational.

If there are no further loan surprises and the government comes up with a credible, accountable and transparent road map for repayment of these loans, and empowers Mozambique’s institutions to ensure that this does not happen again, donor suspensions will be lifted over time and the ratings agencies will also consider upgrading Mozambique.

But many other problems will remain. Though Frelimo factions compromised in February, uniting its leadership behind the presidency will be difficult. Ending the

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spiralling conflict with Renamo, combating inequality and poverty, and action to mitigate the effects of drought are all urgently needed, but will present an even greater set of challenges.

Source: Chatham House/Alex Vines

Mozambique can’t make US$178 million payment on secret loan

On Wednesday 18 May, Finance Minister Adriano Maleiane revealed that cash-strapped Mozambique won’t be able to honour a US$178 million debt-interest repayment, which is due next week, for a previously undisclosed loan extended to a state-run company.

Minister Maleiane told lawmakers in Maputo that the nation holds total public debt of US$11.64 billion, of which US$9.85 billion is owed to foreign investors. Last month, the nation owned up to holding more than US$1.1 billion in hidden loans that it failed to tell investors about as it restructured another facility to a state-owned fishing company.

MAM, whose payment is due on 23 May, is negotiating with lenders to restructure the US$535 million loan, Minister Maleiane said while making the first official explanation about the undisclosed debt. The company is one of two whose loans the government kept hidden from creditors.

The second, Proindicus, made a US$24 million payment on 21 March for its US$622 million facility. The next payment, amounting to US$119 million, is due on 24 March 2017, the minister said.

Fitch Ratings Ltd. estimates that, when factoring in the newly revealed loans,

government debt was equal to 83% of GDP in 2015.

Since the discovery of undeclared loans by the IMF, European nations and multilateral lenders have withheld funding, while rating companies have downgraded Mozambique’s credit. Its currency has fallen 13% against the US dollar this year, after depreciating 32% in 2015. The inflation rate accelerated 17.3% last month, as a drop in commodity earnings and the weakness of the metical pushed prices up.

Following Minister Maleiane’s announcement yields on Mozambique’s US$726 million of bonds due January 2023 rose 177 basis points on Wednesday 18 May, to a record 17.41% by 14:57hrs in London.

Source: Bloomberg

Mozambique can hardly avoid asking for IMF help – Coface chief economist

On Wednesday 18 May, the chief economist of credit risk insurer Coface said that Mozambique “could hardly avoid” seeking IMF help, and that the country has the highest sovereign debt risk among Portuguese-speaking countries.

“It will be very, very difficult for Mozambique to avoid seeking IMF help, because we find gathered here all the classic components of an emerging country sovereign risk crisis”, Julien Marcilly said.

Sovereign risk in Mozambique is the highest among the Portuguese-speaking countries, mainly due to loose fiscal policy, the fall in the price of raw materials and the depreciation of the metical.

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“The sovereign risk of Mozambique is the highest of all Portuguese-speaking countries because, as is the case with many African countries, public debt has risen significantly in recent years, he said.

For Marcilly, there are three main reasons as to why Mozambique beats Brazil to the top of the sovereign risk countries list.

“First of all, [Mozambique] had a very expansionary fiscal policy, in particular with the strong increase in salaries of civil servants, and then it suffered from the price of raw materials, which has fallen sharply in recent months and undermined many countries in Africa”.

The third reason has to do with the devaluation of the metical against the US dollar.

“An issue that has been less talked about, but which is also very important, is the depreciation of the currency, which affects public debt because much of the debt is denominated in foreign currency”, so that any fall in the value of the metical means, in practical terms, an increase in the amount owed.

Mozambique recently acknowledged undisclosed debts amounting to more than US$1.4 billion, which led to the suspension of financial and budgetary support by donors and a freeze on the payment of the second instalment of a US$282.9 million loan agreed with the IMF late last year.

“All things considered, the country is in a very complicated situation”, Marcilly concludes.

Source: Lusa

IMF wants to work with Mozambican authorities to assess implications of undisclosed debt

The IMF has announced that it intends to continue working with the Mozambican authorities to “constructively” assess the macro-economic implications of undisclosed debt.

“Since the Mozambican authorities confirmed the existence of a large amount of debt which had not been notified to the Fund, the authorities have worked closely to ascertain the facts”, IMF spokesperson, Gerry Rice, told a news conference at the headquarters of the Fund in Washington.

“In the next steps, we will work with the authorities to assess constructively the macro-economic implications of these revelations”, he added.

Rice confirmed that an IMF technical team would visit the country in June, adding that the visit was originally scheduled to take place in April, but was postponed when the undisclosed loans information came to light.

The team will continue to gather facts and information, carry out investigations if necessary and assess the macro-economic implications. As for the conditions, “all this will be discussed during the mission”, the IMF spokesperson said.

Asked if it was possible that the IMF will grant Mozambique a bailout, Rice said that the Policy Support Instrument (PSI) is being reviewed and this is something that “will be discussed during the visit”.

The PSI is an IMF instrument designed for countries that do not need financial support for their balance of payments.

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According to the Fund, it “is available to low income countries that have broadly achieved and maintained a stable and sustainable macroeconomic position, including debt sustainability, consistent with poverty reduction and strong and sustained growth”. It helps countries design effective economic programmes that, once approved by the IMF Board of Directors, are welcomed by donors, multilateral development banks and markets as a signal that the Fund endorses the member country policies.

Source: Lusa

IMF to send delayed mission to Mozambique in June

The International Monetary Fund (IMF) will send a mission to Mozambique in June after the original trip was postponed from April in the wake of disclosure of more than a $1 billion of secret government-backed borrowing, it said.

In a news conference transcript posted online, IMF spokesman Gerry Rice said the team would assess the implications of the additional borrowing, which has pushed Mozambique’s foreign debt to around 80 percent of GDP.

Asked about a potential bailout, Rice said it was all “under discussion“. At a parliamentary budget commission this week, finance minister Adriano Maleiane admitted that state firm Mozambique Asset Management (MAM) would be unable to make a $178 million loan repayment that is due on May 23.

According to the official AIM state news agency, MAM had told the government it was trying to restructure the debt to avoid a default that would trigger an automatic sovereign guarantee.

MAM took out the $535 million loan from Russian bank VTB to build shipyards in Maputo and the northern city of Pemba to aid maritime security and service Mozambique’s nascent offshore natural gas sector, according to an IMF source. However, the gas projects have been delayed and there is no sign of the shipyards, leaving MAM with no sources of revenue.

VTB did not respond to requests for comment.

AIM said Maleiane admitted the government was having “short-term payment difficulties” but that overall public debt was under control. According to government figures, total public debt at the end of 2015 stood at $11.64 billion, of which $9.89 billion is dollar-denominated.

Maleiane has announced tough budget cuts but anlaysts say Maputo has very little chance of meeting its obligations, especially after the IMF and donors, who were kept in the dark about the extra borrowing, withdrew budget support.

Source: Reuters

Phantom tuna fleet leaves Mozambicans on the hook

The Mozambican government and international financial institutions made bad deals, and it is ordinary Mozambicans who will suffer.

For the past three weeks, nothing has dominated public conversation in Mozambique like the latest ‘debt scandal’. The government confirmed that between 2013 and 2014 it provided sovereign guarantees for state companies to borrow roughly US$1.5 billion from Credit Suisse Group AG and VTB Capital Plc. A big

17


chunk of the money was meant for tuna fishing boats, but was used instead to buy weapons. To make matters worse, the loans were contracted in secrecy, without Parliamentary debate or approval, as required by law, and were not even registered in public accounts. Poor performance of the companies and other factors has resulted in their inability to pay back the money; and because the Mozambican government was guarantor of the loans, the US$1.5 billion is now public debt.

As a result, the IMF suspended disbursements of US$165 million of a US$286 million emergency loan it agreed to with government in October 2015. The major bilateral donors known as Group of 14 (G14), have also suspended budgetary support to Mozambique in protest. A lot of the coverage has correctly questioned and even criticised the Mozambique government over the secrecy, and its decision to back the operation with a loan guarantee that breached its own annual budgetary ceiling on external borrowing. Yet there are further questions beyond the government actions that Mozambicans deserve the answers to.

Could Credit Suisse and VTB have handled this better?

Though it has to be emphasised that the government is primarily responsible for adhering to its own laws, there are two key problems with how the financial institutions dealt with the Mozambique’s debt issues. First, the obvious risk profile of the projects demanded more due diligence. It remains a mystery why these institutions would advance such significant loans without even ascertaining whether the application followed the country’s national laws.

Second, the lack of rigor in the analysis of project feasibility raises additional questions. It turns out the 24 fishing boats bought under through a deal with Ematum are currently moored and rusting in the harbour of Maputo. The project is reportedly struggling to take off due to mismanagement and grossly exaggerated projections. In fact, Ematum’s results published last year pointed to the fleet catching just US$450,000 worth of tuna per year, compared with the US$18 million sales forecast for this stage of the project in the government’s 2013 feasibility study. How could the financiers not question the amusingly optimistic projections?

It also doesn’t help that Andrew Pearse, who as a Credit Suisse employee, helped structure the Ematum debt deal and then immediately left the bank to work for Lebanese French billionaire Iskandar Safa whose companies, Constructions Mecaniques de Normandie and Abu Dhabi Mar, supplied the boats and weapons on the Ematum deal. All this may not necessarily be illegal, but it does raise issues of power and information asymmetry at least on the part of the Mozambique government.

How does this affect ordinary Mozambicans?

The G14’s suspended budgetary support to Mozambique in the wake of the debt scandal (approximately US$476 million per year). This is money that could have improved the nation’s health and education services. Moreover, Mozambique was expected to spend 12.6% of government revenue on external debt payments in 2016, compared to a prediction by the IMF of 6.7% three years ago. The fresh scandal means a lot more money will be spent paying back uncritical

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lenders like Credit Suisse and VTB, diverting much needed resources from the country.

What else can creditors and donors do?

Creditors may never recover their money if key donor countries and the IMF completely shut the door on Mozambique. Isolation has rarely worked in history. It is important to support Mozambique’s non-state actors in this conversation. In fact, donor countries like Switzerland could play a critical role in engaging their private sector on voluntary disclosure of loans to governments, and advancing a more robust monitoring framework of overseas investments in emerging markets like Mozambique. A more practical way of doing this is encouraging more and better interactions between the in-country economic affairs departments of EU member states and civil society to share and act on intelligence of the social impact of donor investments in Mozambique

The controversial involvement of the French government in the provision of weapons alongside the fishing boats deal raises questions on whether the French government took heed of Criteria eight of the EU Code of Conduct on Arms Export, which stipulates that EU member states will take into account whether a proposed export would hamper the sustainable development of the recipient country. In this context, EU member states are to consider the recipient country’s relative levels of military and social expenditure, and any EU or bilateral aid.

International financial institutions, like the IMF, may also need to take this opportunity to improve relations and collaboration with civil society. Oxfam has successfully supported such an

engagement among civil society in Ghana, the IMF, and the government. It not only improves country ownership of important conversations like these, but also enhances financiers’ political economy analysis of Mozambique.

Of course, one can’t understate the importance of insisting on contract transparency as a condition for financing future projects and addressing debt. The IMF should insist on full public disclosure of loans on a project-by-project basis, and take punitive measures against government officials who contravene these provisions.

A debt audit could help ascertain whether some of this debt incurred is odious or illegitimate and thus not enforceable. If, as has been arguably established in this case, the banks were uncritical and negligent and Mozambican officials erred by hiding the loans from the public, why should the debt be considered legitimate and, consequently, a burden to the Mozambican people?

The once promising southern African nation is now on the hook for a massive debt that threatens the social, economic and political fabric of the country. And the biggest tragedy is that it could have been avoided.

Source: Oxfam America/Titus Gwemende

Exposing the global links of secret Mozambique financial deals

Three important investigations were published during the course of the week 6 to 13 May, into secret and dubious financial dealings of the Mozambique government, which underline the global nature of the problem. Two of these articles relate to the secret tuna and arms

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deals, and are available on free access from normally paid newsletters. The other, by Global Witness, is on a foreign investor.

Africa Confidential: Secret security debts devastate economy:

The most comprehensive and understandable summary of the US$2 billion secret loans, with an excellent chart, was published on Friday 13 May by Africa Confidential.

The newsletter talks of “growing calls for a forensic audit and an international police probe into the officials and entities involved in this massive fraud. … Mozambicans now face the prospect of penury under the yoke of debt repayments on an epic scale”. But it adds that: “The role of the banks involved in the deals, whose terms were far above market rates, is also attracting regulatory interest and criticism”. This issue is raised by the Zitamar investigation, below.

The Africa Confidential investigation goes further than the secret loans, and says: “Sources close to Rosario Fernandes, ex-head of the revenue authority, the Autoridade Tributaria de Mocambique, have told us of systematic diversions of taxes straight into the pockets of the Frelimo elite, especially in the later years of President [Armando] Guebuza’s term of office, when he exercised enormous patronage. Massively inflated contracts were commonplace. The latest to emerge is the extravagant, nearly complete, Banco de Moçambique building in Maputo, which boasts a helicopter landing pad on the roof. Originally estimated to cost US$90 million, the final cost is reckoned at at least US$300 million, with kickbacks and ‘commissions’ accounting

for the cost inflation, say Frelimo sources”.

The newsletter claims that the Ematum boats, which are not being used, cannot be worth more than US$100 million. While it had earlier been claimed that the rest of the loan went on military expenditure, it is now clear that was the Proindicus loan – “so the unexplained sum may reach over US$700 million”.

“The authorities, including [Prime Minister] Antonio Carlos do Rosário and senior military personnel, are now trying to give the impression that large amounts of defence equipment were purchased, we hear. But security sources on the ground see little evidence of that, even though Mozambique’s defence and security spending now equates to around a quarter of the national budget, Africa Confidential can reveal. As a percentage of gross domestic product, the amount allocated to defence is among the highest in the world, at a staggering 5%. But it has little to show for its money, and a more probable scenario is that the money enriched individuals”.

Zitamar: Revealed: Ex-Credit Suisse banker in business with Ematum ship-builder:

“A senior banker for Credit Suisse who was involved in putting together the deals that now threaten to bankrupt Mozambique left the Swiss bank shortly afterwards to go into business with a key beneficiary of the deals, Lebanese businessman Iskander Safa”, the new Mozambican newsletter Zitamar reported on 11 May.

The loan was for US$850 million, of which US$17 million was fees for the banks, and the remaining US$836 million was

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transferred directly to Abu Dhabi Mar, a company owned by Privinvest, a Safa family holding company, according to Zitamar.

Global Witness: The deceivers: Edmonds and Groves: the former England cricketer, his business partner and their stock market empire built with bribery and scams:

Phil Edmonds resigned as chair of Agriterra on 22 April. This was his third venture in Mozambique. He was behind the failed Procana sugar plantation in Gaza in 2008, which was always seen as dubious because it claimed it would produce four times as much ethanol as any similar project in Mozambique. He was also chair of African Medical Investments (AMI) which opened the AMI private hospital in Maputo in 2010; he resigned as chair in 2012. Agriterra runs Mozbife and Deca in Manica Province and plantations in Sierra Leone.

Zambian born Phil Edmonds is a former England test cricketer (1974-87) who resigned as chair of Agriterra on the same day he replied to allegations about him by Global Witness, which published a detailed investigation on 12 May about Edmonds and his partner Andrew Groves.

Global Witness says: “Edmonds and Groves carried off a multi-million-dollar heist on their own shareholders, funnelling profits into offshore trusts”. Edmonds and Groves deny any wrongdoing. According to Global Witness, they paid themselves substantial fees and salaries, and in the chapter on their Mozambique investments, Global Witness said “using secretive offshore companies as cover, they [Edmonds and Groves] siphoned off millions of US dollars by selling assets to

their own listed companies at bumped-up prices”.

According to Global Witness: a company owned by Edmonds, Groves and Vivek Solanki in 2008 bought a property on Avenida Julius Nyerere in Sommerchield for US$2.2 million and sold it to AMI, which they controlled, for US$5.5 million. AMI then built its hospital there. The report includes more details of opaque deals in Mozambique.

The looting machine:

Financial Times correspondent Tom Burgis last year published ‘The Looting Machine: Warlords, Oligarchs, Corporations, Smugglers, and the Theft of Africa’s Wealth’, in which he argues that: “the looting [of Africa] now is accelerating as never before. As global demand for Africa’s resources rises, a handful of Africans are becoming legitimately rich but the vast majority, like the continent as a whole, is being fleeced. Outsiders tend to think of Africa as a great drain of philanthropy. But look more closely at the resource industry and the relationship between Africa and the rest of the world looks rather different. In 2010, fuel and mineral exports from Africa were worth US$333 billion, more than seven times the value of the aid that went in the opposite direction”.

His book does not deal with Mozambique, but the similarities are there. African elites are indeed getting rich, but it is Western corporations, banks, and stock market speculators who are really profiting. And the three investigations published last week show how linked the Mozambican crisis is to these dubious global networks.

What will President Nyusi learn in China this week?

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On Friday 13 May, it was announced that a top adviser to the former Chinese president, Hu Jintao, will be tried on corruption charges, accused of taking “massive” bribes. Ling Jihua was side-lined in a corruption scandal in 2012. Hu was replaced as president by Xi Jinping at the end of 2012, and he began an anti-corruption campaign. The (London) Guardian quotes analysts to say that President Jinping has had to move slowly to consolidate power, and could not initially move against those close to his predecessor. The decision to put Ling on trial means only now, more than three years after taking office, does President Jinping feel that he has sufficient power to tackle corruption at that level.

Source: Mozambique News Reports & Clippings/Africa Confidential/Zitamar/Global Witness

“Fundamental change is essential for Mozambique” – João Mosca

Managing the debt crisis is a major challenge for the Mozambican government at a time when international donors are freezing aid because of undisclosed loans.

The recent discovery of undisclosed state-guaranteed debts of US$1.4 billion will accelerate inflation and undermine the country’s economy. The group of 14 donors to the Mozambican State Budget has frozen payments, and the United States announced a review of its US$400 million annual funding to Mozambique.

In an interview with Deutsche Welle Africa, Mozambican economist João Mosca says that to recover the confidence of foreign lenders it is necessary, first of all, to promote transparency and hold

those who committed the alleged irregularities responsible.

Secondly, it is necessary to renegotiate Mozambique’s debt with donors, especially with the IMF.

DW Africa: How can Mozambique get out of this debt crisis?

João Mosca (JM): At this point, there is only one way to overcome the crisis, and that is a continuation of the large external inflows, mainly financing the balance of payments and financing what is determined in the State Budget as correctly ‘fundable’.

However, it is clear that, for almost all donors, direct funding of the State Budget will virtually cease to exist, and they will opt for financing specific projects with concrete goals and deadlines to make co-operation more efficient.

DW Africa: President Filipe Nyusi is on an official visit in China, one of Mozambique’s main financiers. If implemented, could new loans further aggravate the crisis of the Mozambican debt?

JM: I do not know what the outcome of this visit to China will be. But if China partially covers the debt, by lending to pay off the previous debt, there will only be a postponement of the problem and perhaps a long-term increase, because we would be paying interest on interest. I do not think this is very good idea, except to alleviate short-term need for money.

DW Africa: How can we reduce this debt?

JM: At this point, the Mozambican State is consuming more than 45% of national wealth. It is a state where just the

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spending on civil servants accounts for 11% of GDP, or about 60% of the State Budget. Maybe you could start there. Moreover, I think that it would be a great opportunity for the government to initiate fundamental economic policy changes, leading to a major restructuring in depth of the current economic model of development.

This is a very heavy and inefficient state. It is necessary to modernise the public sector to make it more efficient and lighter and with greater enforcement capacity over economic and social activity, ensuring that current laws are complied with, particularly in the matter of land, the exploitation of natural resources and certain kinds of exports. There is a certain wild market development that benefits neither the country nor Mozambicans. These aspects have to be reviewed and the State should enable the monitoring and enforcement of the law in Mozambique, which today is lacking in many sectors of economic activity.

DW Africa: Do you think rising prices and the inability of the Mozambican government to manage its accounts might lead the people to take to the streets, as they did in 2010?

JM: Prices are increasing, especially from low-income families, and imports of essential goods are decreasing. Crime in the capital is increasing dramatically. All these are strong indications of a tense social situation that could spill over at any time. The State has also maintained subsidies – for fuel, public transport, energy and water, for example, but I do not think it has the financial resources to continue this type of support.

Source: Deutsche Welle

President sets off for China at a delicate point in time

On Monday 16 May, President Filipe Nyusi arrived in China for his first official visit to the Asian country since being inaugurated as head of state in January 2015. Industrial co-operation – particularly in natural gas and in manufacturing – topped the agenda for discussions with his Chinese hosts, according to the Chinese ambassador to Mozambique, Su Jian.

In an interview with the Chinese news agency Xinhua, Ambassador Jian described President Nyusi’s visit as a “milestone” in bilateral relations, and key for Mozambique to embark “on a self-reliant and sustainable development path”.

Although the visit must have been planned months in advance, it comes at a time of crisis in Mozambique’s relations with its Western partners, in the wake of revelations in April that over US$1 billion worth of government-guaranteed loans had not been disclosed, either to the Mozambican public, or to the country’s partners, including the IMF and the World Bank.

In protest over the undisclosed loans, the IMF cancelled a mission that was to have visited Mozambique in mid-April, and suspended the second instalment of a US$283 million loan from the IMF’s Standby Credit Facility (SCF). The group of 14 donor countries and financial institutions that provide direct support to the Mozambican budget followed suit, and suspended further disbursements of financial aid.

The government reacted to this suspension of donor funds by promising

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to cut public expenditure this year, and by seeking to re-establish Mozambique’s credibility with its international partners.

Ambassador Jian, while not mentioning such setbacks, stressed the potential in President Nyusi’s visit of advancing Sino-Mozambican economic cooperation “to the interests of both countries”.

Ambassador Jian claimed that President Nyusi had told him “several times” that his government would prioritise ties with China. Ambassador Jian added that China was also prioritising ties with Mozambique, which it regarded as “a key partner”, in China’s push for international industrial co-operation.

Ambassador Jian said that China will transfer knowledge, management and equipment to help African countries fast-track industrialisation and build up industrial chains to add value to the continent’s vast natural resources.

Ambassador Jian recalled that In February, the Chinese Foreign Minister, Wang Yi, visited Mozambique and the two countries “agreed that co-operation would focus on natural gas exploration and manufacturing, commencing with the construction of infrastructure, training professionals, and providing financial support”.

Quoting the official Chinese figures, Ambassador Jian said that the stock of Chinese direct investments in Mozambique rose to US$1.2 billion by the end of 2015. Much of the Chinese investment is in large scale construction projects. Hence, the China Road and Bridge Corporation is currently building what will be Africa’s longest suspension bridge, between central Maputo across the Bay of Maputo, to the urban district of

Katembe. The bridge should be completed in 2017. The road links between Katembe and the tourist resort of Ponta de Ouro and the South African province of KwaZulu-Natal are being upgraded as part of the same project. The time taken to drive from KwaZulu-Natal to Maputo will be drastically reduced.

China also financed the new Maputo Ring Road, and the complete rehabilitation of Maputo International Airport. Other buildings completed in the recent past by Chinese companies include the new Presidential offices, the national sports stadium in the outlying Maputo neighbourhood of Zimpeto, and the Foreign Ministry. In the meantime, the Director General of the Department of African Affairs of the Chinese Ministry of Foreign Affairs, Lin Songtian, recently said that Mozambique, along with Angola, is a priority partner in Africa for Chinese co-operation.

In its daily briefing commentary the Africa Monitor newsletter last week said that: “besides being able to negotiate new credit lines and attract investment, [President Nyusi] may signal, in the diplomatic field, that the country has strategic economic and financial alternatives to the East. This is a similar path to the one followed by Angola in 2002 when funding from financial institutions for bilateral and market development was scarce compared to investment needs and it was affected by what it considered intrusive measures to improve governance and transparency in the use of public funds”.

According to the same source, the “Chinese investors have shown greater flexibility in their investment intentions, compared to the West”.

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President’s delegation:

The composition of President Nyusi’s delegation gives some indication of the economic rationale behind the visit. Among the senior government figures accompanying the President are the Minister of Industry and Trade, Ernesto Tonela; the Minister of Public Works, Carlos Martinho; and the Deputy Minister of Economy and Finance, Maria Isaltina Lucas.

A large business delegation is accompanying President Nyusi. 71 business people registered for the trip with the Confederation of Mozambican Business Associations (CTA). As on previous state visits, President Nyusi also invited deputies from the three political parties represented in the National Assembly.

Renamo refuses presidential invitation:

The ruling Frelimo Party accepted the invitation as did the opposition Mozambican Democratic Movement (MDM). But, just as on previous visits, Renamo spurned the invitation and is boycotting the delegation.

During the six-day visit, President Nyusi will meet in Beijing with Chinese President Xi Jinping, and other Chinese officials. The Mozambican delegation will also visit Shandong and Jiangsu provinces on the east coast of the country. Figures compiled by Portuguese bank BPI show that Mozambique’s debt to China was US$886 million in 2014, 160% more than in 2012, when the main bilateral creditor to Mozambique was still Portugal

Source: Xinhua/Lusa/Agencia de Informacao de Moçambique/MacauHub

Chinese financing in Mozambique: the other side of the coin

According to economist Eduardo Sengo, Mozambican entrepreneurs are excluded from Chinese-financed public projects, hindering economic development. As such, the time has come for Maputo to raise the matter with Beijing.

The China-Africa Summit in 2005 was a landmark in relations between the two countries, and facilitated a substantial increase in public investment. Millions of US dollars have since been made available to Mozambique and applied in several areas.

“China’s loans are chiefly not commercial; they are mainly concessionary or moderately commercial. In general, they are affordable. The funding has helped us to improve the infrastructure deficit. They were a milestone”, Sengo says.

Ministries, research and education centres, roads and bridges are just some of the visible examples. But in road construction, for example, Chinese vehicles and workers also arrive. It is said that even the nails used come from China.

Tied aid keeping out local business people:

Financing like this, where most of the loan doesn’t even leave the donor country, does little for the development of Mozambican industry and business. Sengo believes that: “What has happened is that the infrastructure itself benefits existing businesses, but in terms of what we call local content in projects, participation has been minimal”.

However, this trend is not only a Chinese phenomenon. The same applies to the

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US, the economist notes, although it is “not as blatant”.

Mozambican analyst and journalist, Ericino Salema, has also spotted this trend. “This has to do with what you call tied aid. If the funds are Chinese, Japanese or Portuguese, it has to be a company from the donor country that gets the work. In this regard I think that it is best explained by what is called the development industry”, he said.

Mozambican government must negotiate with Beijing:

With the economy in crisis and the business community in dire need of empowerment, what will be the consequences of Mozambican industry continuing to be excluded?

Replies Sengo: “I think China’s aid cannot continue in the same way, because it will not empower local entrepreneurs. On the contrary; it will increase the balance of payments deficit”.

The economist cites some obvious solutions. “We can implement projects in areas where we can reduce the problem that exists today – paying for imports. A project that increases imports will not help at all, because it will exacerbate exchange rate pressure. But an agro-processing project, for example, can help solve this exchange rate pressure by increasing the indigenisation of the economy”.

Is President Nyusi seeking financial support in China?

Mozambique is experiencing an unprecedented financial crisis due to undisclosed government borrowing valued at approximately US$1.4 billion. Traditional donor countries in the West

have begun to reduce disbursements or freeze aid just as President Filipe Nyusi commenced a visit to China.

Sengo recalls that the visit has been planned since the beginning of this year, and acknowledges that China could be a part of the solution. “Given the current situation, I suppose one cannot overlook the opportunity to secure other financing, given the urgent need that the country has for financial resources to continue to grow, and continue projects that may otherwise be cancelled”.

At the 2105 China-Africa Cooperation Forum in South Africa, China announced the availability of US$60 billion in assistance and loans to African countries. This includes US$5 billion in interest-free loans and US$35 billion in concessionary loans and preferential export credit.


Now is the time to invest in Mozambique – President Nyusi tells Chinese business people

On Tuesday 17 May, President Filipe Nyusi told a group of Chinese business people from the southern province of Jiangsu that: “Now is the time for you to invest in my country”.

President Nyusi was opening a Mozambique-Jiangsu Business Forum in the provincial capital, Nanjing, on the first full day of his state visit to China.

60 Mozambican business people from sectors such as the building industry, tourism, agriculture, mining, energy and agro-processing attended the event.

The Chinese side includes 48 business people from 20 Jiangsu companies, covering a wide variety of areas,

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particularly construction, agriculture and science and technology.

President Nyusi told the meeting that China is a “strategic partner” for Mozambique, because of its investment and trade. He said that the Mozambican authorities have, over the past five years, approved 92 Chinese foreign direct investment projects, which would involve investment of US$823 million, and could create 14,000 jobs.

The President stressed that Mozambique “has everything necessary to become a regional economic power”, including its “hard working people” and a welcoming attitude towards foreign investment.

There is huge potential in areas such as agriculture, livestock, fisheries and tourism, President Nyusi told his audience. Despite the recent discoveries, the country’s enormous coal and gas reserves had yet to be exploited, and the Mozambican subsoil contained a wealth of other minerals, including graphite, precious stones, gold and limestone.

The President said that the government’s aims include job creation, increasing exports, and substituting imports. He added that investment in Mozambique would help “internationalise Chinese companies”.

Zhang Lei, the Vice-Governor of Jiangsu province, said that over the last two years the trade between Jiangsu and Africa amounted to US$3 billion. 10 companies from the province were already active in Mozambique, mainly in construction.

“We are willing to consider Mozambique as a key partner”, said Zhang. “We are prepared to respond to Mozambique’s socio-economic plans”.

He believed there could be “great complementarity” between Mozambique and Jiangsu, and promised that Mozambique would benefit from the transfer of technology from Jiangsu investors.

Source: Agencia de Informacao de Moçambique

Global Strategic Partnership between Mozambique and China

On Wednesday 18 May, the Chinese Deputy Foreign Minister, Zhang Ming, told reporters that Mozambique and China have agreed to build a “global strategic co-operation partnership”.

The announcement was made after talks in Beijing’s Great Hall of the People between delegations led by the Presidents of the two countries, Filipe Nyusi and Xi Jinping.

Deputy Minister Ming said that such a partnership would “include co-operation in all areas – political, security, economic, commercial, cultural etc.”. The two sides had agreed “to strengthen political co-operation in areas of vital importance”.

“Mozambique is a country with an enormously long coastline”, said the deputy minister, “and China would like to strengthen co-operation in the maritime economy”.

Deputy Minister Ming said that the two delegations had agreed in principle “to strengthen co-operation in security and public order”, and to “help Mozambique boost its defence capacity”. The deputy minister gave no further details of this area.

The talks followed full military honours due to a visiting head of state. In the

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courtyard of the Great Hall of the People, in front of Tiananmen Square, President Nyusi was given a 21-gun salute and reviewed a guard of honour from the three branches of the Chinese armed forces.

After the talks, the two heads of state witnessed the signing by ministers of five agreements. One was aimed at developing productive capacity in Mozambique. Deputy Minister Ming said that this was intended to encourage more Chinese companies to invest in Mozambique. Key areas for such investment would include manufacturing, agriculture and infrastructures.

A second agreement seeks to establish Special Economic Zones. The deputy minister noted that President Nyusi had already visited one Chinese province, Jiangsu, renowned for the development of high technology industries. The President had expressed an interest in these poles of development and in their professional and technical training institutions.

The other three agreements concern the building of a Chinese-Mozambican Cultural Centre in Maputo, co-operation between Mozambique’s National Hydrocarbon Company (ENH) and the China National Petroleum Corporation (CNPC), and a donation of grain to Mozambique.

No details were given of how much grain China is donating or when it can be expected to arrive. Mozambique is in need of food aid because of the damage done to this year’s harvest by severe drought in the south and centre of the country.

Asked about Mozambique’s current economic problems, Deputy Minister Ming said that: “Mozambique and China are

good friends and this is shown both in good and in difficult moments”.

Among the assistance China could offer, he added, was “encouragement to Chinese companies to invest in Mozambique, and provide technology and equipment and financial co-operation”.

Such co-operation was a matter of “mutual benefit”, said the deputy minister. “Helping Mozambique is helping ourselves”.

But when a journalist from Rádio Moçambique asked how much money the agreements signed would involve, Deputy Minister Ming refused to answer and abruptly ended the press conference.

No member of the Mozambican delegation spoke at the press conference.

Source: Agencia de Informacao de Moçambique/Xinhua

Mozambique’s benchmark lending rate remains unchanged at 12.75%

Banco de Moçambique has decided to keep key interest rates unchanged, including the marginal lending facility at 12.75%, according to a recent decision by its Monetary Policy Committee.

The interest rate on the standing deposit facility was kept at 5.75% and reserve requirements remained at 10.5% for liabilities in Mozambican currency and 15% for liabilities in foreign currency.

The central bank also said in a statement that foreign reserves in April totalled US$1.76 billion, which was enough to secure imports of goods and services for 3.2 months, excluding major projects.

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The committee highlighted the inflationary pressure caused by the current politico-military tensions limiting the movement of goods and services, the depreciation of the metical against the currencies of the country’s major trading partners, and the shortage of agricultural products resulting from the floods and persistent drought that has hit the country.

In addition, it noted that – for the second month in a row – business confidence has fallen due to an unfavourable outlook for demand and prices.

The central bank noted that the metical has continued to depreciate against the US dollar. On the last day of April the dollar was quoted on the Inter-Bank Exchange Market at MT53.21, compared with MT50.55 at the end of March. The South African rand was quoted at MT3.76, compared with MT3.44 a month earlier.

Source: APA/StarAfrica/MacauHub

Mozambique’s economy slows to 5.3% in the first quarter of 2016

Mozambique’s economy slowed to 5.3% in the first quarter of 2016 compared to a revised growth rate of 6.1% in the previous quarter, data on the National Statistics Institute website showed on Thursday 19 May.

The performance of the economy during Q1 was largely due to the secondary sector which grew 10%, most notably the construction sector (with 11.4%), followed by manufacturing (9.9%).

The tertiary sector occupies the second position, recording a growth of 6.9%, driven by the restoration industry (with growth of 8.7%).

The primary sector grew 2.7%, driven by the mining industry (with growth of 11%).

Agriculture, livestock, hunting, forestry, fishing and related activities contributed towards a combined 23.1% of GDP, followed by transport, storage and ancillary activities and information and communications, with a total contribution of 12.3%.

Trade industry and repair services contributed a combined 11%, followed by manufacturing, with 8.5%.

The real estate, rental and business services and education contributed towards 7% and 7.1%, respectively.

The remaining industries contributed towards a combined 30.8%.

The actual growth rate recorded in the first three months of 2016 is very close to the value recently predicted by the World Bank of 5.8%.

Source: Reuters/MacauHub/Jornal Notícias

Banco de Moçambique suggests review of 2016 economic targets

Banco de Moçambique has suggested revising the GDP and inflation projections and strengthening the co-ordination of fiscal and monetary policies in order to safeguard macro-economic stability.

The bank’s decision comes after its recent Monetary Policy Committee meeting expressed concern at the decision of the G14 group of programme aid partners to join others in suspending aid.

According to Banco de Moçambique, this decision has the potential to negatively impact the State Budget and balance of payments in a context where the main

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rating agencies have been reviewing the credit rating of the country.

“This scenario occurs at a time when the country is still recovering from the effects of drought and floods in some areas, in addition to the prevailing difficulties concerning the movement of people and goods resulting from the political and military tension”, the central bank said in a press release.

The release cites information published by the National Statistics Institute which highlights a 2% consumer price index increase in April in Maputo after a decrease of 0.31% in March, largely caused by increases in food prices, especially tomatoes, onions, peanuts, potato-reno and rice.

Source: Jornal Notícias

Cost of living increases again in Mozambique

The cost of living has risen again, officially over 2.23% for the month, mainly due to the increase in the price of food imports. The food itself has not become more expensive, but more meticais are needed to buy the foreign currency required to pay for it.

In April, Banco de Moçambique had to spend US$39.7 million of its currency reserves to service external public debt of US$9.89 billion. The central finance institution, which continues to ignore the loans illegally backed by the State in its analysis of the national economy, does not indicate which debts were repaid, but it is unlikely that they are, as the Ematum or Proindicus sums payable in the month would exceed US$190 million.

On Friday 13 May, Banco de Moçambique’s Monetary Policy Committee decided to maintain the high cost of access to money in commercial banks. “Strengthening the intervention in the interbank markets in order to ensure that the balance of the monetary base for May 2016 is in line with the forecast of US$69,507 million”.

Keeping the Permanent Liquidity Lending Facility interest rate at 12.75%, keeping the rate of Standing Deposit Facility interest at 5.75% and maintaining the Reserve Requirement Coefficient at 10.5% for liabilities in national currency and 15% for liabilities in foreign currency (effective from 7 June 2016) are the chief elements of the monetary policy according to a central bank statement seen by @Verdade.

The governor of the central bank, Ernesto Gove, who admitted that the more than US$2 billion in loans backed by the State failed to enter into their coffers, again ignores the impact of these debts, secretly contracted by Ematum, Proindicus and MAM and incurred by the State in violation of both the constitution as well as the budget law.

However, the central bank revealed in its statement that the net international reserves declined in April to only US$1.7 billion due to net sales of foreign currency in the interbank foreign exchange market, net transfers of commercial banks and the “repayment of external public debt service in the amount of US$39.7 million”.

The statement does not specify which foreign debt was repaid.

We now know that the “total amount of public debt, including guarantees issued by the government and debts incurred by

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the Banco de Moçambique to finance the balance of payments, reported on 31 December 2015, is US$11.64 billion. Of this amount, US$9.89 billion is foreign debt, including US$247 million from the Bank of Mozambique”, according to Prime Minister Carlos Agostinho do Rosário’s statement on 28 April.

After taking on the Ematum loans as sovereign debt, Mozambique should be paying investors US$112 million by this time, says Zitamar News, which also failed to ascertain whether any payment had in fact been made.

The same publication indicates that Proindicus SA, which illegally contracted loans backed by the Guebuza government of US$622 million in 2013, should have paid approximately US$80 million to its creditors in April and another instalment of US$24 million in May.

Also according to Zitamar News, MAM, whose 2014 debts of US$535 million that the state illegally endorsed, is scheduled to pay creditors US$134 million in May.

Food increased by over 30% in one year:

However, data released by the National Statistics Institute on the consumer price index data from Maputo, Beira and Nampula suggest that the country registered month-on-month inflation of 2.23%, with imported food price hikes contributing heavily to the increase.

The increase in the cost of living comes just after the country announced national wage increases of between four and 14%, while the year’s cumulative inflation since January had already reached 8.71%. For the same period in 2015, the country registered a price increase in the order of 17.29%.

While the government blames unrest for the increased cost of living, the INE data reveals that Maputo (which primarily gets its food supplies from neighbouring South Africa), has the highest inflation (0.99pp), while Nampula and Beira (which should be the most affected by the conflict) contributed only 0.82pp and 0.42pp, respectively, to the price hikes.

Another fallacy is that the cost of food imports is the biggest burden on foreign currency reserves. Banco de Moçambique statements reveal that Mozambique spent US$37.6 million on fuel but only US$17.9 million on imported food and medicines.

Despite the international slump, oil and fuel prices in Mozambique have not been adjusted since 2011 (when the OPEC reference price per barrel was US$150; it is now US$47) and several studies, including one by the IMF, indicate that, since most Mozambicans do not own a car, the subsidy to petrol stations does not benefit the people.

In fact, the biggest single owner of vehicles in Mozambique is the government and its members.

Source: @Verdade

Strengthening rand increases Mozambique’s food import prices

The depreciation of the metical against the South African rand looks set to undermine domestic measures to curb the rise in imported food prices. One rand now costs close to MT4.5, up from the usual exchange rate of MT3.

Faced with the rising cost of food in recent months, the government agreed with customs and micro importers to reduce reference prices for imported fresh

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produce, and importers said that this, combined with the recovery of domestic and South African production, would allow food prices to fall if the metical kept its value against the rand. But this has not happened. Minister of Industry and Trade, Ernesto Tonela, recently said that if the agreement was not complied with he would meet stakeholders again to ensure that his goal was achieved.

Despite the fact that food remains expensive, the price of tomatoes has dropped from around MT700 to MT350 a box. Other products have, however, recorded insignificant fluctuations.

Source: O País

Deputy Minister Mondlane in Rome for Italy-Africa conference

On Wednesday 18 May, the Deputy Minister of Foreign Affairs and Cooperation, Nyeleti Mondlane, participated in the Italy-Africa Ministerial Conference in Rome (Italy).

The meeting seeks to identify strategic co-operation partnerships between Africa and Italy in the field of economic development (particularly in the areas of infrastructure, agriculture and small and medium-sized enterprises); social and environmental sustainability; and peace and security.

The visit to Rome provided an opportunity for the deputy minister to reaffirm and consolidate bilateral relations of friendship and co-operation between Mozambique and Italy, as well as to share experiences in agro-industry, energy and the development of small and medium enterprises.

Source: Folha de Maputo/Jornal Notícias

Africa now more partial to IMF in times of distress

Zimbabwe stands ready to print its own version of the US dollar and to sell wildlife from its game reserves to raise cash. But the real sign of its desperation is to be found elsewhere. It is calling in the IMF.

Across Africa, countries that until recently had little use for the IMF as a lender of last resort are swallowing their pride. Angola, whose leaders squandered billions of US dollars during the go-go years of sky-high oil prices, is the latest to take the IMF shilling. Ghana signed an agreement with the fund last year after successive governments went on election-driven spending sprees. Zambia, its economy crippled by low copper prices, is negotiating a similar deal.

Zimbabwe is a slightly different case. After 15 years of isolation, President Robert Mugabe’s administration wants to mend ties with the West by settling US$1.8 billion in arrears to the IMF, World Bank and African Development Bank (AfDB). Beijing proved less eager to bankroll Mugabe than he would have liked. If Harare settles its arrears, it will be eligible for new lending, but the IMF’s country chief warned there would be no free lunch.

“Economic conditions are dramatic and economic reforms need to take place now”, he said. It is all so 1980s. Back then, as a condition of emergency lending, the Fund demanded a series of cookie-cutter free-market “reforms” known collectively as the Washington Consensus. Its structural adjustment programmes, or SAPs in the dreaded jargon, imposed deep cuts on public services and insisted on privatisation as well as trade and financial liberalisation.

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Many blamed such policies for destroying already threadbare state provision of schools and hospitals, police and security.

Fela Kuti, the late, great and never mealy-mouthed Nigerian musician, sang that SAP spelt “Suck African People” (“Suck dem dry”). His version of what IMF stood for is not printable. In the 1990s, many African governments improved their economic management. They reined in deficits, curbed inflation and, in some cases, stole less money. By the turn of the century, many African economies were in much better shape.

China pumped in billions of US dollars, often in return for oil, copper and iron ore. Cheap Chinese goods also came flooding in, and while these wrecked local industries, from Nigerian textile manufacturers to Ghanaian shoemakers, they vastly increased the spending power of ordinary Africans. A consuming class, however fragile, emerged.

There were other positive developments. Western donors forgave the bulk of African debts. For the first time, several countries borrowed from commercial lenders. Commodity exporters from Angola to Zambia raked in money. Amid such plenty, the IMF, with its demands for “good governance” and fiscal restraint, became less relevant.

Now more difficult times have returned: commodity prices have slumped, capital markets are in less generous mood and drought has hit several countries in southern Africa.

In the good times, some African governments returned to bad old ways. Mozambique recently revealed that it had racked up US$1.4 billion in previously undisclosed borrowing. Money raised for

a tuna fleet had been lavished on the navy.

Mozambique is extreme, but not alone. According to the McKinsey Global Institute, the continent (including north Africa) ran a weighted average budget deficit of 6.9% of GDP last year, more than double the 3.3% of 2010.

In that year, Africa was running a 0.4% current account surplus. By last year, it had slipped to a 6.7% deficit.

It is at such times that governments turn to the IMF. Fortunately, things may not be so desperate this time. Imperfect though many African governments remain, by and large, their economies are better managed. With a bit of luck, most will avoid outright default.

“There’s been a significant improvement in the macro-economic policy landscape in most cases”, says Abebe Aemro Selassie, deputy director of the IMF’s African department.

Outside Nigeria, where President Muhammadu Buhari retains a visceral hatred for the Fund, there is also less stigma about turning to the IMF. That is partly because it is no longer so hell-bent on pushing neoliberal medicine down recipients’ throats and is more careful to protect health, education and poverty-alleviation programmes. Razia Khan, economist for Africa at Standard Chartered Bank, says both donor and recipients have moved cautiously towards the same page.

When someone shouts “call for the IMF” it is not a sign that things are going well. But it is no longer a death knell.

Source: Business Day

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African growth story is still on the move

In 2010, the McKinsey Global Institute described African economies as “lions on the move”. Today, despite the collapse of global commodity prices and the political shocks that slowed growth in North Africa, the continent’s economic lions are still moving forward.

Africa achieved average real annual GDP growth of 5.4% between 2000 and 2010, adding US$78 billion annually to GDP (in 2015 prices). But growth slowed to 3.3%, or US$69 billion, a year between 2010 and last year.

New research from the McKinsey Global Institute (to be published in October) shows that the shine has not come off Africa’s growth story, but it has become more nuanced.

The deceleration in growth since 2010 has been concentrated in two groups of economies – oil exporters and northern countries rebuilding after the political convulsions of the Arab Spring. The economies of Egypt, Libya, and Tunisia did not grow at all between 2010 and last year, in stark contrast to average annual growth among the three economies of 4.8% in the previous decade.

The rate of growth among oil exporters such as Algeria, Angola, Nigeria and Sudan fell sharply, to 4% from 7.1%. Productivity growth also declined in these two sets of economies. The annual rate of productivity growth in the Arab Spring countries fell from 1.7% to 0.6%, and in Africa’s oil exporters, from 2.6% to 0.4%.

Resilience and GDP growth:

The rest of Africa maintained stable rates of GDP and productivity growth in the past five years. Real GDP grew at an annual rate of 4.4% a year, virtually the same as it was in 2005-10. Productivity grew at a compound annual rate of 1.7% during the same period, consistent with 1.6% from 2000-10.

The resilience of large parts of Africa in the face of challenging conditions reflects the continuing diversification in many economies. Between 2010 and 2014, services generated 48% of Africa’s GDP growth, up from 44% in the preceding decade. Growth in Africa’s manufacturing sector has been low at 4.3% a year between 2010 and 2014, but utilities and construction achieved significant expansion to ensure that industry overall generated 23% of Africa’s growth, up from 17% in the preceding decade.

Resources made a negative 4% contribution to growth between 2010 and 2014, compared with 12% during the previous decade.

In the long-term, three powerful positive trends are likely to sustain Africa’s growth. First, its young population and growing labour force is a valuable asset in an ageing world. In 2034, Africa is expected to have the world’s largest working-age population of 1.1 billion.

There have been 21 million new formal, wage-paying jobs created in the past five years, and 53 million in the past 15. Stable jobs grew at a rate of 3.8% between 2000 and last year, 1% faster than growth in the labour force. This is still far from the job-creation trajectory Africa needs to fuel future growth, but it is progress.

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Second, Africa is still urbanising and much of the economic benefit lies ahead. Productivity in cities is three times as high as in rural areas and, in the next decade, an additional 187 million Africans will live in cities, according to the United Nations.

This urban expansion is contributing to rapid growth in consumption by households and businesses. Household consumption grew at a 4.2% compound annual rate between 2010 and last year – faster than the continent’s GDP growth rate – to reach US$1.3 trillion last year.

We (Domininc Barton and Acha Leke) project Africa’s consumers will spend US$2 trillion by 2025. But companies will need to gather detailed market intelligence on the whereabouts of the most promising consumer markets. Only 75 cities accounted for 44% of total consumption last year.

Consumers:

Nigerian consumers alone may account for up to 30% of Africa’s consumption growth in the next decade. Other segments to target include households earning more than US$20,000 per annum in South Africa and Morocco, two of Africa’s most diversified economies with a large consumer base, or those earning US$5,000-US$20,000 in the fast-growing economies of East and West Africa. Third, African economies are well positioned to benefit from rapidly accelerating technological change that can unlock growth and leapfrog the limitations and costs of physical infrastructure in important areas of economic life.

East Africa is a global leader in mobile payments. The penetration of smartphones is expected to hit the 50% mark in 2020, from only 2% in 2010.

In sub-Saharan Africa, cellular-enabled, machine-to-machine connections are expected to grow about 25% per annum to 30 million by 2020, according to GSMA Intelligence, changing the game in sectors from healthcare to power. Spending on infrastructure has doubled in the past decade, and is now 3.5% of GDP.

Foreign direct investment reached US$73 billion in 2014, up from US$14 billion in 2004. Africa has 700 large – and increasingly pan-African – companies earning revenues of more than US$500 million. These companies together boast US$1.4 trillion in revenues, and many continue to grow extremely fast.

Large companies in utilities, transportation and healthcare have achieved double-digit revenue growth in domestic currency terms between 2008 and 2014.

Undoubtedly, policy makers will need to grapple with significant challenges ahead. As the price of oil and other commodities has fallen, Africa’s finances have deteriorated: the continent ran a weighted average budget deficit of more than 6.9% of GDP last year, from only 3.3% of GDP five years earlier.

In 2010, Africa was running a small current account surplus of 0.4% of GDP; by last year, that had turned into a deficit of 6.7%. Several countries are in talks for financial assistance, including Angola with the IMF and Nigeria with the Chinese government.

Political instability is also more prevalent. The number of violent incidents measured by the Uppsala Conflict Data Programme jumped from 858 in 2010 to 2,022 in 2014.

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Most of Africa was booming five years ago – 25 of the top 30 economies had accelerated their growth from the previous decade. This year, however, the number of countries whose growth was similar or quickening halved to 13 – Botswana, Cameroon, Côte d’Ivoire, the Democratic Republic of the Congo, Ethiopia, Gabon, Ghana, Kenya, Madagascar, Namibia, Senegal, Tanzania and Zimbabwe – and the six largest economies experienced slowing growth, partly reflecting lower resource prices and the Arab Spring.

This mixed picture means that companies and investors assessing Africa’s potential need to be specific about the growth and stability of individual countries.

We measured three aspects of stability: macro-economic stability, economic diversification, and political and social stability. Three distinct groups of countries emerges from this.

Growth stars:

About one-fifth of Africa’s GDP comes from countries we call “growth stars”, with high rates of growth and a high score on stability. These countries, among them Côte d’Ivoire, Ethiopia, Kenya, Morocco and Rwanda, are not dependent on resources for growth, and are reforming their economies and increasing competitiveness.

The second group, the unstable growers that account for 43% of Africa’s GDP, experienced high growth rates in the past five years, but achieved lower scores on stability. This group of countries includes Angola, the Democratic Republic of the Congo, Nigeria and Zambia, which need to diversify their economies away from resources, to improve their security, or stabilise their macro-economies.

And then there are the slow growers that accounted for 38% of GDP last year including South Africa, Madagascar, Egypt, Libya and Tunisia.

The imperative now is for policy makers and businesses to work together to accelerate economic reforms and strengthen the fundamentals that underpin growth. One key will be to diversify exports and national revenue sources to eliminate the volatility that arises when resource prices change considerably. This is critical to increasing Africa’s ability to finance its own development by better mobilising domestic resources through improved tax and customs collections and encouraging more savings.

This will require countries to increase pension provisions, expand access to banking and financial services and deepen their capital markets.

Better planning is critical:

Better planning of urbanisation is critical to unlocking the growth opportunity in full and to make African cities competitive. A stronger focus on expanding power supply and electricity is needed to solve the number one challenge to the business environment.

Improving educational systems to develop the skills needed now and into the future is vital, as are further efforts at regional integration of manufacturing and trade and improving physical and digital infrastructure.The economic and political turbulence in parts of Africa in recent years has been a shock, but it has not derailed the growth story. The IMF forecasts that Africa will be the second-fastest growing region in the world between this year and 2020, with annual

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growth of 4.3%. What the past five years have proved is that Africa’s economic lions need to improve their fitness to make the most of their potential and continue their march towards prosperity.

Source: Domininc Barton/Acha Leke/Business Day

Reserve Bank cuts South Africa’s growth target

The South African Reserve Bank has revised its GDP growth forecast downwards for 2016, from 0.8% to 0.6%, noting that the domestic economic growth outlook remains weak.

“While a recovery is still expected in the next two years, the forecasts for both these years have been revised down by 0.1 percentage point to 1.3% and 1.7%”, said Reserve Bank Governor, Lesetja Kganyago, of the outlook for 2017 and 2018.

“While the Bank’s forecast for GDP growth in the quarter is barely positive, it does represent the low point of the forecast, and a slow upward trend is expected going forward”, Kganyago said.

He said that the economic slowdown is also reflected in labour market trends, with the unemployment rate rising to 26.7% in the first quarter of 2016, from 26.4% year earlier.

The South African Reserve Bank left its benchmark repo rate unchanged at 7.0% on Thursday 19 May, while lending rates remain at 10.5%.

Kganyago said that inflation is now expected to average 6.7% in 2016, compared with 6.6% previously. In 2017 and 2018 inflation is expected to average

6.2% and 5.4%, marginally down from the previous forecast.

The expected peak, at 7.3% in the fourth quarter of 2016, is unchanged, the South African Reserve Bank said. The forecast for core inflation is slightly improved, with a lower forecast for 2016 of 5.9% from 6.2% previously. Forecasts for 2017 and 2018 are unchanged at 5.7% and 5.2%, the Bank said.

Source: Business Tech

Financial Services:

Renaissance Capital moves into Mozambique in deal with Dominio

Renaissance Capital Ltd. is pushing into Mozambique to take advantage of what it says is increasing interest from foreign investors in the southern African country.

The Moscow-based investment bank, which trades across 43 emerging and frontier markets, signed a partnership deal last week with Lisbon-based Dominio Capital Group, which has an office in Maputo. The agreement will make it easier for RenCap to work on deals for clients wanting to invest in the country and to help Mozambican public- and private-sector entities raise capital abroad, according to James Friel, the bank’s head of investment banking.

“There’s an opportunity for M&A and capital-raisings – there is a tremendous need for capital”, Friel said in an interview at a conference hosted by RenCap in Lagos (Nigeria), on 11 May. Dominio Capital is “very plugged in to the corporate and political spheres. They do not have research, distribution or capital markets capabilities. So, our skill sets are complementary and will give clients a full

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offering of services”. While Mozambique’s Eurobond yields have soared since the IMF discovered more than US$1 billion of undisclosed sovereign-linked debt last month, it has long been one of the most buoyant economies in Africa, with growth averaging around 7.5% this century.

“The government recently announced its intention to privatise over 50 companies, partly to address budgetary issues, but also for strategic reasons”, Friel said. “It’s an interesting market for us”.

Family-owned Dominio, which focuses on Portuguese-speaking countries, also has an office in Angola. It has been an adviser on deals worth US$4.2 billion and manages US$150 million of assets, according to its website. It says its clients have included ExxonMobil Corporation, Bob Diamond’s pan-African bank Atlas Mara Ltd. and US private-equity firm Carlyle Group LP.

“The partnership will principally focus on Mozambique”, said Friel. “But we will look opportunistically at Angola”.

Ethiopian opportunities:

RenCap also sees opportunities in Ethiopia, which with 90 million people has the biggest population in Africa after Nigeria. The east African country has largely kept its banking, telecommunications and retail industries closed to foreigners, but is allowing more investment in other sectors, said Friel.

Companies that produce fast-moving consumer goods are “knocking on Ethiopia’s door, figuring out what they can do there”, he said. “Ethiopia is starved of US dollars and needs to invest massively in infrastructure and manufacturing.

“A lot of state banks are instructed to fund state-backed projects. So, there’s a dearth of capital to fund private enterprise. For that reason, I suspect we’ll see a

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loosening of capital controls in the next decade”.

RenCap, which has offices in Johannesburg, Cape Town, Nairobi and Lagos, has no plans to open new ones in Maputo or Addis Ababa, Ethiopia’s capital, according to Friel.

Source: Bloomberg

Banco Terra de Moçambique registers first positive results

For the first time in the bank’s history, Banco Terra de Moçambique registered positive results for 2015 to the amount of MT5.2 million.

In a recent statement, the institution announced that 2015 is classified as the bank’s “turning point”, following the re-orientation of activities, making the bank more comprehensive.

As a result of such efforts, the bank recorded significant growth as its loan portfolio increased by 85% and its assets grew 44.7%.

“With a good capital base, resulting from a gamble on the part of the shareholders, Banco Terra de Moçambique presents a unique situation … with a solvency ratio of 54.5%, well above the minimum of 8% required by regulatory authorities”, reads the statement.

Banco Terra de Moçambique is a commercial bank committed to focusing on the domestic market. The bank has facilities in eight of Mozambique’s 11 provinces, providing internet banking services for the rest of the country and the world.


Barclays Africa division weighs joint venture with Barclays plc

Barclays Africa Group says it is considering a joint investment-banking venture with Barclays plc, as its London-based parent plans to further reduce its controlling stake.

“At the corporate and investment bank the synergies provided a significant advantage”, Barclays Africa Chairperson, Wendy Lucas-Bull, said at the bank’s annual general meeting on Tuesday 17 May. “We are looking at the issues business-by-business and at what the options are, like a joint venture”.

Barclays sold about 20% of its stake in the African unit in the market earlier this month as part of CEO Jes Staley’s plan to retreat from the continent and raise cash to reduce its capital burden, leaving it with 50.1%. Barclays Africa’s investment bank has used the UK parent’s distribution, technology and geographic spread to win clients and grow across its 12 operations on the continent.

Barclays Africa has also informed its parent that it would like to include a sale of shares to black investors as part of the exit plan, Lucas-Bull said.

“Black economic empowerment is one of the options we have tabled”, she said. “We’re not clear how far Plc will sell down. They have indicated they would prefer to still have a significant shareholding, but we’re proceeding based on the worst case that Plc goes to zero”, Lucas-Bull said, referring to Barclays.

More than a decade ago, Barclays Africa set up a black-empowerment deal. That stake was diluted over time and while the bank wasn’t legally bound to do another

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deal, the sell-down by the British bank presented an opportunity. The UK lender has said it might take two to three years to conclude the reduction of its stake.

“We continue to work with Plc on a broad range of options”, Lucas-Bull said. “We’re also working with the South African Reserve Bank and regulators across the continent, but we remain focused on the execution of our strategy. The Plc sale of the 12.2% stake demonstrated a very healthy appetite for Barclays Africa, which is very positive”.

Source: Bloomberg

Opinion: can corporate governance cushion Africa’s investors against commodity slump?

The global economic environment is changing and investors are hard pressed to find profitable and stable investment harbours for their funds.

The end of the commodity super cycle, the slowing Chinese economy and volatile international markets are affecting Africa’s ability to maintain projected growth targets for 2016. Without increased economic activity across all industry sectors, the continent will need to focus on softer issues such as good corporate and political governance to retain investors in the short to medium term.

The African Corporate Governance Network (ACGN), a NEPAD Business Foundation (NBF) programme developed to improve the institutional capacity of Institute of Director (IoD) organisations across the continent, recently launched a report titled: ‘The State of Corporate Governance in Africa: An Overview of 13 African Countries’ during a summit in Maputo. The report, which was released

in South Africa at the Nedbank-NBF Networking Forum, offers an insightful look into the corporate governance frameworks and the systems in place in 13 African countries that are key economic development role-players for the continent.

During the Nedbank-NBF Networking Forum, Thabang Chiloane, head of public affairs for Nedbank Group, expressed confidence in the findings of the ACGN report which not only demonstrate Africa’s commitment to strengthening its governance foundation, but also establishes a solid baseline in terms of what corporate governance in Africa looks like. The report, which compiled research from 13 countries (namely Egypt, Ghana, Kenya, Malawi, Mauritius, Mozambique, Nigeria, South Africa, Tanzania, Tunisia, Uganda, Zambia and Zimbabwe), points out where the continent needs to focus its attention, and how to accurately measure governance improvements in the years to come.

“Africa has an unfortunate reputation of being a very difficult place to do business, and while the continent has made exceptional progress in addressing the fears and concerns of international investors in this regard, much work remains to be done”. Chiloane explains, “This report clearly shows that many African countries understand the significance and importance of good corporate governance and are working towards improving the levels of good governance as the cornerstone of future economic growth for themselves and the continent as a whole”.

Looking at Africa’s top 10 brightest stars in terms of economic growth, we can clearly see the correlation between good corporate governance and the financial

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inflows from foreign investors. Good corporate and political governance is the foundation from which sound and sustainable economic activity can be built on, as it feeds into the frameworks and structures that govern commerce including the movement, inflows and outflows of local and international funds.

The ACGN report presents a compelling picture of a continent largely committed to sustainably raising its governance game in order to compete for investment on the global stage. However, while this may be the ‘big picture’ of the overall state of corporate governance across the 13 countries included in the research, what is also clearly evident from the findings is that Africa remains a continent of immense diversity and complexity – and the corporate governance systems and approaches of its various countries are no exception to this.

This is demonstrated by the often vastly different stages of corporate governance progress seen across the 13 countries surveyed, with some still facing significant challenges as they start the process of setting out clear corporate governance frameworks, while others have established themselves as global leaders in governance with innovative and unique models and frameworks that many developed countries would do well to imitate.

According to Lynette Chen, CEO of the NBF, despite these disparities, a key take-out of the report is the fact that African countries now have an obvious desire for, and commitment to, good corporate governance, and this augurs well for global investment into the continent going forward.

“It is no secret that Africa is a lucrative market with its wealth in resources and a population of over one billion people. Whilst Africa has become one of the most appealing investment destinations in the world, it is also poses many political and governance challenges to investors. The key to the continent’s ability to grow that appeal and attract steady and sustainable inflows of vital investment money, will be its capacity to raise global investor confidence by ensuring that good political and corporate governance standards are entrenched by the governments, its institutions as well as in the private sector”, says Chen.

That said, the report findings also highlight that many of the countries surveyed still have many challenges to be overcome, many of which will require collaboration and partnership with other countries on the continent. However, the fact that all 13 of the countries included in the research have established a national governance oversight body in some shape or form, demonstrates their commitment to tackling these challenges, and their seriousness in terms of putting good governance at the centre of their future development. Source: NewsGhana

Oil and Gas:

“State oil firm could do more for economy” – Prime Minister Rosário

Prime Minister Carlos Agostinho do Rosário has challenged the state oil firm Petromoc to take the lead in supplying the domestic fuel market and to make valuable contributions to the national economy.

The Prime Minister said that this could be done by replacing natural gas for imported

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fossil fuels and by maximising its storage infrastructure.

State-run newspaper Domingo, widely quoted the Prime Minister as saying that Petromoc should bring its full weight to bear on the economy in a positive way.

Petromoc is the official importer of cooking gas and Liquefied Petroleum Gas (LPG). It is also responsible for setting the selling prices.

Prime Minister Rosário was addressing a formal visit to the company where he noted that the strategy of substituting gas for fossil fuel imports requires an ambitious programme to convert the fuel used by the country’s vehicles.

Following a private meeting between the government delegation and the company’s management team, Petromoc’s Chief Executive, Fernando Uache, said that his firm is already playing the leading role as it currently holds a 42% market share.

“We have the country’s largest storage capacity of around 450,000 cubic metres and a team of 621 workers”, he said, adding that in 2013 the company had sold 560,000 cubic metres of fuel domestically, which rose to 635,000 in 2014 before falling to 598,000 cubic metres last year.

Petromoc operates a network of pipelines and storage facilities in all of Mozambique’s ports.

The company is 60% owned by the state, 20% owned by the Institute for the Management of State Holdings (IGEPE).

The remaining 20% belongs to the company’s managers and workers

Source: APA/StarAfrica

South Africa establishes LNG import unit for gas-to-power programme

South Africa is creating a unit to import liquefied natural gas (LNG) for power plants as suppliers including Cheniere Energy Inc. await fuel tenders for annual shipments of at least three million tons.

The Gas Industrialisation Unit will initially focus on importing LNG as South Africa seeks to reduce its dependence on coal-fired power, Garth Strachan, a deputy-director general at the Department of Trade and Industry, said on Monday 16 May, during a presentation in Cape Town (South Africa). Eventually, the unit will also seek to tap domestic sources of natural gas, he said.

“We’ve got to ensure that oil and gas industrialisation has to be one of the pillars of industrialisation going forward”, said Strachan.

Houston-based Cheniere is among companies interested in supplying South Africa’s gas-to-power programme, which plans to add 3,126 megawatts (MW) of capacity between 2019 and 2025. That could require annual LNG imports of approximately US$530 million, according to Trevor Sikorski, an analyst with Energy Aspects in London.

“Almost anyone with gas is looking for demand at the moment, but the most competitive supply” for South Africa would be from Nigeria, Angola, the US and possibly Qatar, Sikorski said.

Mozambique option:

The new government unit, which requires final approval from the Energy Ministry, will consider regional gas supplies from Mozambique and Botswana, Strachan

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said. Mozambique’s state-owned ENH expects Anadarko Petroleum Corporation and ENI SpA to make final investment decisions on LNG export projects later this year.

South Africa also announced plans last week for legislation to clarify rules for the production and transportation of natural gas, paving the way for the development of shale-gas reserves in the country’s semi-desert Karoo region.

Source: Bloomberg

South Africa, not Mozambique, to industrialise with Mozambican gas – Hanlon

South Africa is already planning to use Mozambican gas as the basis of plastics, fertilizer and ceramics industries, according to Engineering News. In a 2015 report ‘Gas for development or just for money?’ Hanlon and his team argued that gas would be an excellent basis for industrialisation in Mozambique, producing fertilizer, chemicals and plastics. This could create thousands of jobs in related industries. But there was no interest. Mozambique has opted for quick returns by selling the gas as LNG or through the Chipande pipeline to South Africa – yet again simply selling raw materials without value added.

The South African Department of Trade and Industry (DTI) has devised a plan for gas industrialisation intended to grow the economy and create more jobs, Engineering News reports. The plan is to first rely on imports of LNG (probably from Mozambique) to kick start the industrial development, with hopes of large-scale imports of gas once infrastructure was more developed.

The story repeats itself – Cahora Bassa, Mozal, exporting coking coal instead of processing local iron ore, exporting gemstones but not creating a local jewellery industry, exporting most cashew nuts unprocessed.

Source: Mozambique News Reports & Clippings

Gas industrialisation could be a game-changer, say industry players

Potential investors and experts in South Africa’s gas industry foresee great potential in the sector despite the risks.

“We are on the cusp of a global oversupply of shale gas. We have the opportunity to ship gas and drive industrialisation in industries from glass and cement to agro-processing and breweries”, said South African Oil and Gas Alliance CEO, Niall Kramer.

While gas-to-power was vital for the country, as it was needed for a more diverse energy mix, a gas industrialisation programme could grow the economy and create more jobs.

The Department of Trade and Industry had devised a plan for gas industrialisation, but intended to stagger the way the industry was developed.

It would first rely on imports of LNG to kick-start the industry, with hopes of large-scale imports of gas from African countries such as Mozambique, Botswana and Tanzania coming on stream once infrastructure was more developed.

“Gas has become the dominant find on a global basis. There’s a lot of gas available. The large volumes have pushed prices down”, said South African National Energy Association (Sanea) secretary-

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general, Dave Wright. He told a Sanea event in Cape Town that importing LNG would be an excellent starting point.

“In the event of finding gas in South Africa or offshore, we would already have the market demand.

Sasol Group Regulatory Services Vice-President, Johan Thyse, said an anchor customer was key. “From there onwards, you can branch out to other industries”.

Various sectors could benefit.

“The steel industry could be a big user of gas in the foundries. It could be used in the plastics industry and in the fertiliser and ceramics industries. We have no doubt that gas is a hugely important initiative”, said DTI Industrial Development division deputy director-general Garth Strachan.

But while realising the benefits of gas, there were no illusions that a more sustainable industry would grow overnight. Ultimately, South Africa would like to discover its own gas resources, as well as importing gas from neighbouring countries like Mozambique and Tanzania. But the distances were vast.

“The distance from the west of England to Ukraine is half the distance of the area in Southern Africa we are talking about. In those distances, you have 35 economies. In the US, you have 52 micro-economies to pass through, compared with 20 in Southern Africa, which are far apart”, said Independent Power Producers Office consultant Martin Cameron.

DTI Up and Midstream Oil and Gas director, Kishan Pillay, said the department had done a lot of research

into the gas industry in the US and its very positive impact on the economy.

“Countries like the US and Qatar have used gas to industrialise their economies. We are at the very beginning stage of the gas industry. It’s going to require a lot of planning, getting fact-based information and the right collaborative frameworks in place”.

Source: Engineering News

Manuel Cuambe appointed Non-Executive Director of Sasol

The former chairman of the Board of Directors of Electricidade de Moçambique (EdM), Manuel Cuambe, was appointed Non-Executive Director of the South African petrochemical company Sasol.

As such, Mozambique becomes the first African country, excluding South Africa itself, to have a member on Sasol’s Board of Directors.

Cuambe, who has approximately 30 years’ experience in the energy sector, will start his duties at Sasol on 1 June. Cuambe held the position of CEO at EdM for seven years and has a degree in electronic engineering.

Source: O País

ENI invested US$37 million in Mozambican social projects over a five-year period

Italy’s ENI invested approximately US$37 million in social responsibility programmes in Mozambique over the past five years.

According to Fabio Castiglioni, managing director of ENI East Africa, the majority of the funds were channelled into projects aimed at improving the countries health

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and education sectors and water distribution programmes.

Speaking to reporters in Palma district (Cabo Delgado Province), Castiglioni explained that his company has built a health centre and equipped a local operating room, a maternity ward, a radiology department and a clinical analysis laboratory.

Also in Cabo Delgado, ENI has installed a water supply system and funded a training programme for the reduction of endemic diseases.

Elsewhere in the country, ENI has equipped a technical training centre for educators, in addition to funding national scholarships for college courses in the oil field.


Mining:

Government discusses falling mineral prices with industry

On Monday 16 May, the Mozambican government met with mining sector companies, civil society and development partners in Maputo to discuss the impact of lower raw material prices at a time when mining sector companies in Mozambique – especially coal and heavy minerals – have been reporting huge losses.

The boom in mineral resource exploitation, reflected in Mozambique by investments of around US$14 billion in hydrocarbon and mineral research and production between 2004 and 2013, has been largely reversed by the fall in mineral product prices since 2009.

The government’s biggest concern is the loss of direct and indirect jobs, along with the significant decrease in demand for goods and services, affecting thousands of Mozambican companies. The decline also affects tax revenues from the export of natural gas and liquefied natural gas produced in Pande and Temane.

Speaking at the meeting, the government said that the country would undertake structural measures to diversify the economy and lessen its dependence on mineral resources.

“It is in periods of downturn that structural measures must be undertaken. It has become imperative to find mechanisms to enable the country to survive the volatility of prices of energy resources”, said the Minister of Justice, Constitutional and Religious Affairs, Isaque Chande.

Noting that, in the last 10 years, Mozambique has identified resources of more than 20 billion tons of coal and more than 200 trillion cubic feet of gas, Minister Chande said that the country must ensure that the gains generated from these resources should be channelled into diversification of the economy.

“We have to ensure the necessary economic links between mining and other sectors, such as agriculture and manufacturing”, he said.

The minister pointed out that the mining industry is experiencing uncertainty, with the duration of the current downturn unknown, a situation that requires greater transparency and sustainable exploitation of energy resources.

Speaking at the same event, the resident co-ordinator of the United Nations Programme for Development (UNDP),

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Marcia Castro, said that the price decline has reduced the capacity of energy resources to perform a decisive role in reducing poverty in Africa, a situation that should alert countries dependent on extractive industries to the need for diversification.

“The challenge that countries dependent on energy resources face is how to make the current price crisis an opportunity for diversification of the economy”, said Castro.

She went on to say that the price drop in oil, gas and coal exposed the vulnerability to external shocks of countries dependent on extractive industries.

“The value of raw materials has contributed to huge economic growth in Southern Africa, but the fall in prices caused by the dependence on energy resources reveals great vulnerability”, she said.

Source: Jornal Notícias/Lusa

Mustang Resources letter to shareholders: development strategy and Share Purchase Plan

On Tuesday 17 May, Mustang Resources distributed the following letter to its shareholders:

Dear Valued Shareholder,

I am writing on behalf of the Board of Directors of your company to provide you with this update on the company’s near-term development plans for our flagship Montepuez Ruby Project in Mozambique, and also to provide some details on our Share Purchase Plan offer.

First, I would like to thank you all for your continued support during what has been a

challenging yet transformative period for your company. As you will all be aware, Mustang has gone through some significant changes in recent months and we believe we have now established the foundations that will allow us to rapidly accelerate our growth strategy.

Due to our extensive in-country network and operational focus in Mozambique, Mustang was able to acquire rights to earn majority interests in three prospective ruby licences earlier this year. The acquisition was completed on 26 February 2016, following which we have decided to focus the majority of our resources on unlocking value from Montepuez in the near-term.

It is therefore with great pleasure that I provide you with a short overview of the Montepuez Ruby Project and the key reasons why the management and operational teams are so excited about the future of your company:

Mustang holds rights to earn majority interests in three prospective ruby licences covering 158 square kilometres in the Montepuez ruby province, northern Mozambique.

Importantly, Mustang licences are located adjacent to AIM-listed gemstone producer, Gemfields, which is valued at circa A$478 million.

Gemfields realised total of US$150.8 million in five auctions for 5.98 million carats of the 18.8 million carats mined during its bulk sampling phase.

Mustang’s processing plant and supporting equipment are on site with capacity of 600 to 2,400 tpd. Full trenching and drilling programme commencing in May 2016.

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Mustang planning to commence low-Capex bulk sampling in June 2016 which has the potential to generate near-term cash flows.

Consumer demand has caused prices of rubies to increase 63% over the past eight years.

Mozambique alluvial rubies selling for up to US$688 per carat with quality that matches Burmese ‘Pigeon-Blood’ rubies.

Geology of Montepuez:

The project is located within the Montepuez Complex which is part of the Mozambique Belt – a very unique geological occurrence in northern Mozambique.

Furthermore, the Mustang team has identified high priority targets with geological features similar to the nearby Gemfields’ deposit, eight kilometres to the South-East. Aeromagnetic data has shown a NW-SE ruby mineralisation trend and structural lineaments linking to Gemfields and known artisanal diggings. Ruby mineralisation in Montepuez Complex is known to occur along structural lineaments and contacts (both primary and secondary deposits). A 5.3 kilometre lineament transects Mustang licence 4143L – and is a priority target for trenching and bulk sampling. Initially, Mustang will focus on the alluvial targets as a source of higher quality rubies.

Near-term operational focus:

With our focus now firmly on developing the Montepuez Ruby Project, the company has made the decision to scale back activity at both the Save River Diamond Project (SRD) and Balama

Graphite Project (Balama) for the immediate future.

Although our team did discover the first gem quality diamonds in Mozambique at the SRD, the project has not proven to be commercially viable to this point, and as such the Board made the strategic decision to preserve funding and realign its operational focus by placing SRD in care and maintenance until such time as the company is in a financial position to develop and possibly expand the project.

At Balama, the company will aim to unlock further value through proving a JORC Compliant Resource at a number of priority areas within the licence portfolio, whilst spending minimal funds to do so. The project to date has also proven to be very technically sound with the presence of shallow and significant intersections of high grade graphite throughout the licence areas

Share Purchase Plan (SPP):

You will find enclosed herewith a copy of the SPP Prospectus dated 17 May 2016 wherein the company invites eligible shareholders to apply for a total of 12,500,000 shares at an issue price of US$0.04 per share in order to raise US$500,000 (before costs). You are encouraged by your directors to subscribe.

The company may accept oversubscriptions of up to a further US$1,370,567 (before costs) through the issue of up to a further 34,264,179 shares at an issue price of US$0.04 per share. Therefore, the maximum amount which may be raised under the SPP Prospectus is US$1,870,567.

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Eligible shareholders are entitled to apply for a maximum of US$15,000 worth of shares (375,000 shares).

Please refer to the SPP Prospectus lodged with ASIC and dispatched to shareholders for further important information, including the risks related to such an investment.

Also please visit: www.mustangresources.com.au and refer to our announcements on the ASX platform for details on the Montepuez Ruby Project.

Yours faithfully,

Christiaan Jordaan

Source: Mustang Resources Limited/Finance News Network

The commodity that no one knows about but everybody wants to buy

The world’s mines and steel plants got so devalued during the commodity slump that some were just given away by owners struggling to cut losses or debt. But there’s at least one metal that’s been attracting a lot of attention.

Niobium is used to produce stronger, lighter steel for industrial pipes and aircraft parts. It is mined in only three places on Earth, and the price of every kilogram is seven times higher than copper.

China Molybdenum Co. outmanoeuvred at least 15 companies last month to purchase Anglo American Plc’s niobium and phosphate unit in Brazil, agreeing to pay US$1.5 billion – or 50% more than analysts expected. The buying frenzy that included Vale SA, Apollo Global Management LLC and X2 Resources

showcased the growing appeal of a market that may be worth US$4 billion for a soft, silvery metal many experts don’t know much about.

“I didn’t know what niobium was, and I had been in the minerals industry for 20 years before this opportunity came across my desk”, said Craig Burton, the chairman of Cradle Resources Ltd, which is seeking to develop the US$200 million Panda Hill niobium project in Tanzania. “I had to actually open up the periodic table just to double-check that it was an element. It definitely is a boutique space”.

Specialist market:

Niobium is hard to find and hard to value. More than 80% of global supply comes from one company – Companhia Brasileira de Metalurgia e Mineração (CBMM) in Brazil. Metal Bulletin Ltd, which publishes prices for metals as obscure as bismuth and germanium, says there’s not enough liquidity to report one for niobium.

The metal averaged about US$40 a kilogram last year, according to Cradle Resources. An equivalent amount of copper on the London Metal Exchange fetched approximately US$5.49. Global demand for niobium is about 90,000 to 100,000 metric tons annually.

Still, prices fell last year because of the weak demand for steel, as slumping oil and gas markets led to fewer metal pipe purchases, according to Anglo American, which wants to raise cash to cut debt after a collapse in commodity prices. Almost all the metal comes from just three mines in Brazil and Canada, allowing dominant producer CBMM to match supply to demand and influence prices.

http://www.mustangresources.com.au/

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Wide interest:

Among the companies outbid by China Molybdenum were Mosaic Co., the world’s largest producer of phosphate fertilizer, South32 Ltd. and Eurochem Group AG, people familiar with the process said. The sale was highly competitive, said two people involved, who asked not to be identified because the matter was private. The winning offer exceeded the estimates of analysts at Bank of America Corp. and Investec Plc. RBC Capital Markets said the assets were among the best that London-based Anglo has offered.

What makes the business so attractive is that there are only a few operating mines. Anglo and Niobec account for about 9% of production, and Brazil’s CBMM supplies the rest, according to Argonaut Securities Pty. Both the US and Europe list niobium as a strategically important mineral.

“Niobium is a very unique business”, said Kalidas Madhavpeddi, who heads the CMOC International unit of Luoyang, China-based China Molybdenum. “We typically want to buy from people who regret selling it. We’ve been very carefully assembling a war chest in anticipation of a downturn in the industry”.

Market dominance:

CBMM, controlled by the billionaire Moreira Salles family, has mostly dominated supply since starting operations five decades ago. It sold a 30% stake to a group of Asian steelmakers in two transactions valued at US$3.9 billion in 2011.

In another deal, Magris Resources Inc., founded by former Barrick Gold Corp. Chief Executive Officer Aaron Regent,

agreed to pay US$530 million for the Niobec mine in Canada in 2014.

Unsuccessful bidders in Anglo’s sale may turn their interest to Cradle’s Panda Hill project in Tanzania, Argonaut said in a research report. Pending financing, it’s expected to start producing in mid-2018.

The sales “have brought a lot of participants in”, Cradle’s Burton said. “There was only one winner. That leaves lots of parties that might be interested in talking to us because we do need to raise some capital to bring this project on”.

Source: Bloomberg/Live Mint

Premier African in limestone play

Currently poised to pocket the first earnings from its THA tungsten mine in Zimbabwe, Premier African Minerals Ltd. is about to start prospecting for limestone.

The junior headed by George Roach, one of the founders of UraMin, has acquired a 52% stake in TCT Industrias Florestais Ltd., a firm that owns a major limestone mine in Sofala Province in Mozambique.

The transaction worked out to US$2.1 million, of which US$1.1 million was raised in a rights issue by Premier African.

The junior also reached an agreement with two companies, Transport Commodity Trading Mozambique Ltd. and GAPI Sociedade de Investimentos SA.

After selling Premier African some of their shares in TCT, the two agreed to a US$1 million loan provided by Premier African to finance exploration work on the scheme.

Source: Africa Intelligence

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Former Pemba mayor digs in over illegal excavation

Cabo Delgado’s Land, Environment and Rural Development Ministry is scheduled to appeal to the prosecutor’s office to force Augustinho Ntauali, former Pemba mayor, to stop extracting sand on the outskirts of the provincial capital, citing his lack of an environmental license.

Ntauali has been warned several times to suspend activities, but has not complied.

The controversy around the illegal extraction of sand for construction along Pemba’s approach roads in the Muxara neighbourhood dates back to September last year when the department ordered its immediate cessation, but 10 months later routine excavations continue.

The provincial environmental department’s Augusto Assane says that Ntauali is challenging the institution’s integrity by excavating without the necessary environmental permits or environmental management plan.

Assane adds that the excavation’s proximity to the national highway makes the situation all the more troubling because it makes the area vulnerable to progressive erosion.

“It is an imminent danger, so we took the decision to suspend the excavations. It was a precautionary measure to avoid the worst but, unfortunately, we are being challenged, even though we drew the individual’s attention to the facts several times”.

“If nothing else, there are third-party assets around the mine, such as a Chinese company operating there and a

mobile phone antenna, so it is not an appropriate location for such activity”.

Reportedly, Ntauali went to the Lands, Forestry and Rural Development Department to explain that he had found a business partner with whom he planned to develop in the area, and was making some improvements to the site.

He was asked to present project plans as required by law, but never returned with them.

Jornal Notícias approached Ntauali for comment on the matter, but he declined, claiming that he had no time to talk to the reporter, and was unable to say when he might be available.


Energy:

Power trading in Africa can drive electricity sector over next five years

Power trading agreements between countries that possess excess power generating capacity and those battling supply shortages will be a dominant theme in the electricity markets of south-central African nations in the next three to five years, says Standard Bank.

Mozambique, which currently has the potential to produce more electricity than its economy requires at present, is likely to dominate the supply-side of this trading market with Namibia, Zambia and Botswana expected be the main purchasers in the region, after South Africa.

The biggest challenge to these arrangements will be reliable and stable transmission networks to facilitate the

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seamless transfer of electricity between sellers and purchasers.

These networks require significant co-operation between neighbouring countries, so the role of the Southern African Power Pool (SAPP) in ensuring cross-border planning, investment and trading between member states remains critical.

“Power will increasingly become one of the most tradable commodities across the region in the coming years given the electricity shortage we are seeing across Southern Africa”, says Cody Aduloju, Standard Bank Power and Infrastructure division executive.

“Almost every aspect of a modern economy relies on electricity to function so the countries that emerge as the ones with excess supply will have significant negotiating power, so to speak”, said Aduloju.

Aduloju says that Mozambique, which plans to double its generating capacity to five gigawatts (GW) by 2025, is one of the few countries in Africa that currently possesses an over-supply of electricity thanks to the hydro power available from the Cahora Bassa dam, which has an installed capacity of 2,075MW of power per year or around 73% of the country’s installed generating capacity. Mozambique has the potential to expand the existing capacity of the Cahorra Bassa hydro facility by approximately 60% provided it can attract the necessary investment, he says.

“The biggest challenge that Mozambique faces in taking advantage of this opportunity and many other power projects, is that it has weak transmission infrastructure, which is a key requirement

for exporting adequate levels of electricity to other countries in the region”, says Aduloju.

“However, it has phenomenal potential for electricity production, ranging from coal-, gas- and hydro powered generation”.

Mozambique has recently commissioned Sasol’s CTRG 175MW gas fired project. While small by international comparison, the value of such projects should not be underestimated in a regional context. The 118MW gas-fired plant built in Mozambique by Gigawatt, a company that was awarded a gas power generation concession by the government to supply electricity to the capital city of Maputo, will add significantly to the nation’s grid. Mozambique has a strong pipeline of projects under development and over the next five years is seeking to add 600MW of generating capacity. This will come via a range of different sources such as coal, solar and gas.

Improved transmission line infrastructure would enable Mozambique to boost power exports. The country already supplies approximately 1,349MW to South Africa, 100MW to Zimbabwe and 50MW to Botswana each year. Mozambique has recently begun supplying 100MW to Zambia where there is a shortage of power due to low water levels at Kariba Dam.

Namibia represents a huge opportunity for countries with potential oversupply in the region as it currently imports about 61% of its electricity needs. Given Namibia’s total power demand of 534MW, that would leave an estimated 320MW in possible supply deals up for grabs based on current peak usage of 508MW. However, Namibia has several plans under way to boost its power generating capacity.

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These include 800MW from the Kudu combined gas and steam plant; 44MW in onshore wind potential and 120MW in solar PV potential.

“The lack of its own sizeable power generating capacity means that it is absolutely imperative for Namibia to start entering into Power Purchase Agreements (PPAs) with other partners in the region, which is currently happening”, said Aduloju. “From a financial perspective, NamPower is probably one of the strongest utilities on the continent so it has a lot in its favour in terms of entering into these PPAs”. Current agreements are being negotiated and finalised with South Africa and Mozambique. Botswana is another country in the region that is likely to remain reliant on its neighbours for the foreseeable future given that the country already imports 68% of its power needs.

SAPP has, since inception, facilitated the regional power trading framework by ensuring reliable and economical electricity supply across the region. Its members include utilities and private power producers from Botswana, South Africa, Mozambique, Lesotho, the Democratic Republic of Congo (DRC), Zimbabwe, Zambia, Namibia, Swaziland and Malawi.

Plans are also afoot to determine the viability of building a multi-billion project to build a power transmission network linking the power grids of South Africa, Mozambique, Namibia, the DRC and Angola. Hydro-power has already been identified as a possible opportunity for Angola via the proposed 2,067MW Luaca and 300MW (50%) Baynes plants. That will go some way towards enabling Angola to achieve its goal of almost

tripling its installed generating capacity 9,000MW by 2025.

Aduloju says that the DRC represents perhaps the biggest missed opportunity for the economic growth of any single country across the entire African continent. Apart from the fact that the country possesses virtually every mineral resource known to man, the Congo River is estimated to have a potential hydro-power generating capacity of between 40,000MW and 60,000MW.

“It is unlikely that any country in Africa will have sufficient power generating capacity in the foreseeable future so it is absolutely imperative that the continent consider an adequate power trading mechanism in addition to investments in generating infrastructure”, says Aduloju.

“The bottom line is that for as long as the electricity shortage in Africa persists, the negotiating power will remain in the hands of countries that have the capacity to produce”.

Source: BizNis Africa

Cahora Bassa exceeds first quarter production target

As a result of infrastructure investments, Hidroeléctrica de Cahora Bassa (HCB) produced 4,364 gigawatts per hour (GWh) in the first quarter of this year, exceeding targets by 7.51%.

“HCB production rates for January, February and March were above 1,400GWh, meaning that operating levels were above 100% of the plan”, reads a company statement. According to the note, these production levels are the result of upgrades to energy production and transmission chain infrastructure,

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which began in 2009. Cahora Bassa projects production of 4,126.12GWh for the current quarter, the press release reveals.

“First quarter results are encouraging and support the achievement of corporate goals and targets for this year, in turn reinforcing the commitment of HCB to national development”, the statement reads.

Source: Folha de Maputo/Lusa

Cabo Delgado and Zambézia reduces energy deficit

In 2017 construction will commence on two photovoltaic plants located in Ancuabe district (Cabo Delgado Province) and Mocuba (Zambézia Province), subsequently reducing the electricity deficit in these two parts of the country.

This announcement was made by President Filipe Nyusi on Saturday 14 May, during a working visit to Cabo Delgado Province. According to the President, the first photovoltaic plant will be installed in the administrative post of Metoro.

President Nyusi informed the rally that other construction projects in Cabo Delgado, specifically involving economic and social infrastructure, are being prepared and the government is currently seeking funds for their implementation.

President Nyusi also spoke of building a dam on the Megaruma River, which will significantly reduce the water supply problem to the city of Pemba and the municipal town of Chiure, as well as allow for the irrigation of lands surrounding the area.


Transport & Construction:

Armando Guebuza wants his own airline

According to Africa Intelligence sources, the firm Intelec Holdings teamed up in late April with the South African company Legend Aviation to create the airline Linhas Aéreas do Zambeze, which specialise in transporting passengers and freight as well as in aerial mapping and helicopter flights.

Intelec is minority owned by the former President of Mozambique, Armando Guebuza, and is run by Salimo Amad Abdula, renowned in Maputo to be a front man for the former head of state’s commercial interests. Intelec’s Director General, Haje Amade Pedreiro, personally supervised the agreement.

Since March, he has also been the chairman of the board of Electrotec, another of Guebuza’s many companies. For its part, Legend Aviation is a subsidiary of the Durban-based company King Shaka Aviation which provides a variety of air services. It is owned by Vincent Christoforos and Russell Ashley-Cooper. The airline industry is on the rise in Mozambique, where companies in the sector are multiplying fast.

Linhas Aéreas do Zambeze is 40% owned by Intelec and 60% by Legend Aviation.


Maputo-Katembe Bridge: a project that inspires

The Maputo-Katembe Bridge project came at an initial estimated cost of US$1,040 million and is being executed by the China Road and Bridge Corporation. Each passing day, signs of

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progress sharpen the expectations of future users, and not only because the bridge will improve the movement of people and goods from the capital to the southern part of Maputo Province.

The bridge will also connect the central Maputo with the municipal Katembe district, and will therefore have a regional dimension, connecting with South Africa via Goba and Ponta do Ouro along a route that currently comprises of a dirt road and a ferry.

The bridge will be one of the largest in Africa, with towers 135 metres high and with a length of about three kilometres. The central suspended span is 680 meters and is 60 meters above sea level to allow for maritime traffic.

By March, the CBRC construction company had mobilised more than 3,000 employees, 1,699 involved in construction. Gender equality has received a significant boost, with 127 women on the payroll, of which 97 are directly involved in the construction.

According to the Maputo SUL Development Company, which is overseeing the work, 431 of the total number of workers are foreigners, with 23 in the offices and 408 in construction. There are 1,268 Mozambican workers, with 13 in the offices and 1,255 in construction.

However, challenges remain. These include the resettlement of families from the Malanga and Luís Cabral neighbourhoods, and of public and private services on the bridges connecting roads. There are also medium and high-voltage electric cables both above and below ground on the northern (Maputo) side that will need re-routing.

The crossing will be crucial both for residents and others with interest on both sides of the bay.

Those interviewed on the subject consider that the infrastructure will bring a new dynamic to residents and those transiting Katembe en-route to various destinations in Maputo and South Africa, given that the area is also an access corridor via the Ponta do Ouro border crossing.

Students coming from Katembe to study in Maputo will also benefit from the project, with public and private road transport and ferries currently ceasing to operate around midnight. Source: Jornal

Notícias

Locations fixed for Maputo Ring Road’s five tollgates

The Maputo SUL Development Company, the public company in charge of the construction of the Maputo Ring Road, has decided on the locations for the project’s tollgates.

The first tollgate will be located at Casa Jovem, covering the section between Baixa and Marracuene. The second will be close to the bridge over the railway line on the Marracuene to Chiango section.

The company’s Chairman, Silva Magaia, told reporters that these two tollgates will act in a complementary fashion. Therefore, customers travelling between Marracuene and the city centre will only need to pay once to use both sections – a process made easier through the use of an “e-tag”.

The third gate will be located near the Police Science Academy (ACIPOL) on the Marracuene to Zimpeto section. The fourth, which covers the Zimpeto to

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Tchumene section, will be located in the neighbourhood of Matola-Gare at the junction with the EN4 highway to Witbank.

A fifth tollgate is to be built to cover the new bridge over the Incomati River at Macaneta in Marracuene.

According to Magaia, the Macaneta tollgate will be the first to be opened, followed by the ones situated at Casa Jovem and ACIPOL. He expects these to be open by December.

He added that the company had set the proposed tariffs, which must be submitted to the government for approval. Traffic is already using most of the ring road and the lack of tollgates is costing the company over US$18,000 per day.

Magaia stated that 90% of the project has been completed. The main construction tasks left are the bridge over the railway line at Matola-Gare and the intersection with the EN4 at Tchumene.

Construction of the ring road is budgeted at US$315 million, of which US$300 million comes from a loan from the Chinese government with the rest coming from the Mozambican State.


Portuguese construction companies say that Mozambique remains a promising market

Portuguese construction companies in Mozambique have told reporters that, despite the current crisis facing the country, Mozambique remains a promising market, pointing to encouraging foreign investment as one of the paths out of the current situation.

Paulo Pereira, financial director of Mota-Engil, told Lusa that: “Mozambique is facing difficult times, but I believe that this will be short-lived and, like other countries that have been in a similar position, it will come out of this situation”.

Pereira said Portugal was “exiting a much more hard-hitting crisis”, with increased foreign investment. He said that the economic challenges in Mozambique could be overcome if the country continued to assert itself as a promising market at the regional level.

“I have no doubt that Mozambique, with Portuguese companies and international investors, will overcome the crisis”, Pereira said.

João Lopes, CEO of Mercury - Visabeira, said that the crisis in Mozambique was affecting construction companies, with the depreciation of the metical affecting imported raw material prices. However, he maintained that he was optimistic for the near future.

“Prices tend to rise on the domestic market and this leads companies opting to restrict consumption”, he explained. “The situation is complex but the Mozambique construction market is promising”.

Geonext Product Manager, Miguel Gomes, said that the situation in Mozambique is getting a “bit complicated”, and that this was the worst period in the eight years that his company had been operating in Mozambique.

“We have seen cases where payments have had some problems reaching Portugal, possibly due to lack of foreign exchange, and all this has complicated future business”, Gomes said, adding that it is not enough to just have a “huge

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potential” market: favourable conditions for business are also necessary.

“The information that has been released is not the best, which creates a certain market downturn”, Gomes says, adding that the future of Mozambique is still promising, given that “the country and the people are fantastic”.

The Mozambican economy has being shaken since the end of last year by a sharp devaluation of the metical against the US dollar, rising inflation and the effects of natural disasters and politico-military unrest.

Investment fell more than 70% in 2015 over the previous year and Mozambique’s main donors announced the suspension financing after the revelation of large undisclosed government-guaranteed debts.

In the face of threats to the economy and mounting public debt, the Mozambican government says it is focusing on increasing productivity and competitiveness to build resistance to further external shocks.

Source: Lusa

Agriculture:

Mozambique firm to invest US$12 million for developing rubber production

A Mozambican energy firm, Holding Mozambique says it will invest US$12 million towards developing rubber production over an area of 4,000 hectares. The company’s Director, José Parayank, said the first phase covers 64 hectares and so far, the company has invested in rebuilding infrastructure,

buying machinery and compensating 300 families.

Parayank says the Mozambican government will submit a proposal to the Indian government by the end of June seeking funds for the extension of the electricity network in the centre of the country to support the revival of rubber production.

The project is aimed at extending the electricity grid to Tacuane, in Lugela district (Zambézia Province), and the 40 kilometre extension will supply power to the company Holding Mozambique, which is developing the rubber project.

Rubber trees can grow to more than seven metres high with a diameter of over 30 centimetres. They have a lifespan of between 25 and 30 years.


Other:

Graça Machel wants to be queen of business

At 70, Graça Machel, widow of presidents Samora Machel and Nelson Mandela, has not said her last word in the world of business.

This savvy businesswoman has just formed a new company in Maputo. Called Hega, the new venture specialises in asset management of businesses and investment.

A member of the Central Committee of the ruling Frelimo Party, since 2005 she has headed the investment firm Whatana Investment Group, which owns a portfolio of companies in partnership with prestigious partners: Whatana is thus associated with Whasintelec (automobile)

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and the group Intelec Holdings in which former president, Armando Guebuza, is a shareholder.

Whatana also owns stakes in Vodacom and Moatize Power Plant.


Mozambique earned US$193 million from tourism last year

Mozambique earned revenue of US$193 million from tourism in 2015, as 1.63 million tourists visited the country, according to President Filipe Nyusi.

Speaking on Thursday 19 May, at the opening of an International Conference on the Development of Tourism in Beijing (China), President Nyusi said that investment projects in tourism in 2015 amounted to US$139 million, and the sector employs over 50,000 people, directly and indirectly.

“These indicators, although they represent a considerable growth in comparison to previous years, are far from corresponding to the potential that Mozambique offers”, he said.

Therefore, the government is determined “to improve institutional performance, to attain levels of excellence in providing services to the public. We have made interventions in order to create an environment more favourable to tourist investment”.

This includes “simplifying procedures for the licensing of economic activities and giving greater incentives to the investors and users of Mozambican facilities”.

President Nyusi said that the government’s Strategic Plan for the Development of Tourism over the next

decade has as its goal “that by 2025 Mozambique will be the most vibrant, dynamic and exotic destination in Africa”.

That vision, he added, “stimulates us to improve the competitiveness of Mozambique in tourism and to develop access and infrastructures. Our vision of tourism is a direct invitation to all investors and tourists to choose Mozambique as a heavenly destination, on the coast and in the interior”.

In a period of economic downturn, characterised by a fall in the prices of commodity exports, and a retraction of investment in minerals, tourism could be a valuable alternative. But President Nyusi warned that tourism depends on peace and stability.

“Acts of terrorism, the absence of effective peace and violence have been significantly affecting tourist activity”, he said.

Nonetheless, President Nyusi added that tourism “can contribute towards increasing the level of understanding and interaction among peoples, promoting peace and concord in the world”.

Therefore, tourism could become “a factor in the construction and maintenance of peace, and of bringing peoples and nations closer together”.

“It enriches cultures and harmony in diversity”, President Nyusi claimed. “The tourism industry contributes to the redistribution of wealth, and is thus one of the greatest promoters of social justice”.


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Businesspeople argue that human resource development is “fundamental” for Mozambique

Mozambique needs to develop its human resources, without forgetting the capital needed to implement projects, said the Director-General of Mozambique’s Investment Promotion Centre, Lourenço Sambo.

Sambo was speaking on Thursday 19 May, during a session to present business opportunities in Mozambique, held in Beijing, as part of a state visit by President Filipe Nyusi.

On the side-lines of the meeting, private entrepreneurs agreed with Sambo and reiterated that training specialised staff is imperative for project implementation.

Afonso Chan, vice-president of Charlestrong Engengharia, Tecnologia e Consultoria, from Macau, recalled that one of the great challenges at this time “is to find bilingual staff – Portuguese and Mandarin – for business development”.

“Through the signing of some protocols with higher education institutions we have managed to get some translators who are currently working with us in Mozambique”, said Chan, noting there is still “a long way to go in this area”.

The Director of the Science and Traditional Chinese Medicine Park for Guangdong – Macau Cooperation, Xie Yi, recalled that in healthcare, especially traditional medicine, Mozambique can gain from Macau’s knowledge.

“Traditional Chinese medicine is one of the three most important industries in Macau and with the knowledge of our professionals, Macau can be a bridge in

the development of technology, research centres for drug production and industrialisation of medicine”, said Yi.

The businesspeople were part of a delegation organised by the Macau Trade and Investment Promotion Institute (IPIM) that participated in the conference on business opportunities in Mozambique.

Gloria Ung, executive director of IPIM, told the businesspeople and government officials at the meeting about “Macau’s availability to deepen its role as a platform between China and the Portuguese-speaking countries”.

Source: MacauHub

AfDB: ease visa rules to promote trade and tourism

Making access to visas easy or scrapping the requirement entirely is an important way in which governments can help promote tourism and trade among the nations of the continent, according to the African Development Bank (AfDB).

The AfDB has developed the Africa Visa Openness Index to assess which countries have the most open and efficient visa access. The bank says cumbersome visa procedures undermine doing business across borders on the continent.

On average, travel within the continent is often difficult because African nations are “more closed off to each other than open”, the AfDB said in its 2016 report on visa access. “Free movement of people is not a reality across Africa”.

Most require visas in advance:

The report said that only 20% of the 55 countries in the index do not require visas

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and only 15% offer visas on arrival, meaning more than half require visitors to obtain visas in advance. To make matters worse, the report said, many of Africa’s strategic hubs have restrictive visa policies while the continent’s small, landlocked and island states tend to be more open to promote trade links with neighbouring countries.

The report said countries in West and East Africa tend to be more open than in other regions. The top 10 nations for openness stand out, with an average score of 0.86 (out of one) on the AfDB index, more than double the overall average of 4.25.

Seychelles is first for openness:

The top 10 countries are Seychelles, Mali, Uganda, Cape Verde, Togo, Guinea-Bissau Mauritania, Mozambique, Mauritius, and Rwanda. At the bottom of the list are Eritrea, Ethiopia, Sudan, Angola, Gabon, Libya, Egypt, Equatorial Guinea, Sao Tomé and Principe, and Western Sahara. South Africa ranks 35 on the list, Nigeria 25 and Kenya 16.

The report said eight of the top 10 countries for openness have seen gains in travel and tourism as a portion of GDP. In Seychelles, which is visa free, tourism accounted for nearly 57% of the country’s GDP in 2014 and was expected to increase by more than 5% in 2015.

Rwanda and Mauritius ease requirements:

The report highlights benefits to Rwanda and Mauritius after they adopted open visa policies for visitors from other African countries in recent years. Both countries have seen an increase in African business and leisure travellers, which has produced

“an economic impact that is still growing”, the report said.

After Mauritius relaxed visa requirements for visitors from 48 African countries, more than one quarter of visitors to the nation in 2014 came from other African states, with revenue from tourism totalling US$1.2 billion.

“Greater visa openness forms part of Mauritius’ Africa strategy, which aims to promote the country as a gateway for investment into the continent”, the report said. New open visa policies are also helping Rwanda with GDP growth of 7% in 2014 and tourism income was up 4% to more than US$300 million.

Rwanda adopted a visa-on-arrival policy and cut its fee by half, to US$30, then saw visits by Africans increase by 22% annually.

“We are seeing more African travellers not just in tourism, but in business”, said Francis Gatare, chief executive officer of the Rwanda Development Bank.

AfDB wants visa requirements eased:

The report notes that the African Union’s Agenda 2063 calls for removal of visa requirements across the continent by 2018 and creating an African passport.

Other potential solutions include offering visas on arrival, as Mauritius and Rwanda have begun doing, creating visa-free regional blocs or visas for regional blocs, offering multi-year visas, or offering visa-free access to Africans as Seychelles does. Other ways to increase travel is to offer eVisas so the traveller can apply online rather than having to be present to obtain a visa, the report said. Currently, nine African countries offer e-Visas: Côte

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d’Ivoire, Gabon, Kenya, Nigeria, Rwanda, Sao Tomé and Principe, Sierra Leone, Zambia and Zimbabwe.

Questions about security:

The report argues that more open visa policies will not undermine security.

“Having strong systems in place including biometric databases at border controls and joining IT systems with other countries and regions seems to be the answer. That allows information sharing and greater co-operation, which in turn minimises risk and provides higher levels of security overall”.

The report stresses the importance of travel to the development of the continent in the coming years.

By 2034, air arrivals to destinations in Africa are projected to increase to 280 million from nearly 120 million in 2014.

That increase “needs to be matched by more visa-open policies on arrival on the ground”, the report said.

Source: Africa Middle East

Matchedje Motors donates four vehicles to Maputo police

On Tuesday 17 May, Matchedje Motors, which assembles vehicles at its factory in Machava (Maputo Province), donated four vehicles to the Maputo police.

At a ceremony held to mark the 41st anniversary of the creation of the Mozambican police force (PRM), three of the four vehicles were handed over: two minibuses and a twin cabin vehicle.

Speaking at the ceremony, the company’s General Manager, Sandra Song, explained that the gesture was a way of thanking the police for its work maintaining public order and tranquillity.

On behalf of the Chinese embassy, He Yuan noted that the gift was part of a deepening of co-operation between the two countries, especially in the area of public security. He added that: “co-operation over public security is very important because social order is essential for a country’s development”.

In response, the General Commander of the police, Julio Jane, thanked Matchedje

http://www.africaninfex.com

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Motors for the donation and the Chinese embassy for all the support that it had given the police. Matchedje Motors is a partnership between the Mozambican State and the Chinese company China Tong Jian Investment. With a total

investment of approximately US$150 million, the factory was built on an area of 20,000 square metres in Machava.


POLITICS

Mozambican government apologises for undisclosed debts

Minister of Economy and Finance, Adriano Maleiane, officially apologised to the country for the non-disclosure of government-guaranteed debts incurred between 2013 and 2014, and has reiterated that there will be no consequent tax increases.

“The government, in 2013 and 2014, for reasons it has explained, did not provide information about two guarantees issued in favour of two companies to the value of US$622 million and US$535 million and at this time, is publicly apologising to the Mozambican people”, Minister Maleiane said.

Speaking on the side-lines of the launch of integrated growth projects in the Nacala Development Corridor in Nampula, the finance minister dismissed the possibility of tax increases following the financial crisis triggered by the escalating public debt and suspension of international partners’ support.

“Citizens’ pockets will not be affected by tax increases as a result of these debts”, Minister Maleiane said.

However, according to RFi the government announced that it will be cutting grants to civil society organisations.

According to the government, it no longer has the funds to support a variety of social programmes, and will announce the suspension of subsidies to civil society organisations shortly.

The minister went on to say that the government is studying how best to use funds generated by taxes to boost the country’s economy.

“We are reviewing the Customs Tariff to see how we can stimulate agriculture and tourism, which are government priorities”, he said.

Source: Lusa/RFi

Parliamentary hearing on the government’s undisclosed debt

On Wednesday 18 May, Renamo boycotted the parliamentary hearing on the government’s undisclosed debt in protest at the hearing having been scheduled for a specialised committee instead of a plenary session.

The fact that the Minister of Economy and Finance, Adriano Maleiane, addressed the Planning and Budget Committee and not a full parliamentary session, as demanded by Renamo, “reveals [an attitude of] authoritarianism towards the people to whom you owe a full and in-depth explanation”, Renamo deputy José Samo Gudo told a press conference.

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“The move to bring the government to clarify the debt in specialised committees denotes a vain attempt to deceive Mozambicans, the international community and debt creditors, and a clear violation of constitutional norms and other ordinary legislation in our state, which is supposed to be a state of [governed by] law”, the parliamentarian continued.

15 members of the majority Frelimo bench and one member of the MDM, attended Wednesday’s session.

According to Renamo, Frelimo is acting in “subordination to the government’s deception strategies”, and accuses the majority bench of scheduling the hearing “unilaterally” and on the eve of an equally viable plenary sitting.

Minister Maleiane told the Parliamentary Committees that MAM, which benefited from state-guaranteed loans contracted outside public accounts, cannot afford the first repayment instalment due on 23 May and is seeking to restructure the debt in order to avoid default.

“According to the company, MAM is negotiating to restructure because it does not have sufficient income to pay” the US$178 million first instalment, he said.

The minister said that the purpose of restructuring MAM’s 2014 US$535 million state-guaranteed loan is to avoid the company’s obligations falling upon the state’s general budget.

“It would be hard to find budget money to pay the debt”, Minister Maleiane admitted, adding that the government was satisfied with the company’s efforts and that negotiations with creditors “are going well”.

The Minister said that MAM, which is 98% owned by GIPS, a Mozambican State Information and Security Service company, provides services in oil, mining and ports, and has a permit to build a shipyard in Pemba.

The credit maturity is six years at 7.7%, with a deferral period of two years, and the first of four annual instalments is due next week, but according to Minister Maleiane the company has not yet generated the revenues to repay the debt on its own.

Nevertheless, “this provision will not affect the budget because the company is working with creditors”, Minister Maleiane explained.

The minister also said that a technical team from the IMF planned to visit the country in June.

“Negotiations between the Mozambican government and the IMF are going well. We have been exchanging information and working on the analysis of macro-economic implications. Next month, a technical team from the IMF will visit Mozambique”, the minister told parliament’s Planning and Budget Committee.

Minister Maleiane said that the IMF’s assessment of the impact of public debt in the country’s growth projections is important, as investors and international partners follow the analysis of international financial institutions closely.

“We are working to quickly restore the confidence of investors and international partners”, Minister Maleiane stressed.

On the suspension of support from international partners to the State Budget,

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the minister expressed confidence in the resumption of aid.

“What the partners said was that they had suspended support until the IMF took a position on the impact of debt. They [donor countries] are also, as are we, members of the IMF”, he said.

In addition, the minister said that the public debt is under control and within the parameters, though admitting payment difficulties in the short term.

“We are within the parameters according to which we can consider that the debt is under control, there are no major concerns”, he said.

Also during Wednesday’s session, Minister Maleiane said that the plummeting metical exchange rate and soaring cost of living are not the result of state-guaranteed debts incurred by Ematum, Proindicus and MAM.

According to Minister Maleiane, the guarantees in question do not have an impact on the State Budget, and there was, therefore, no reason to talk about reallocation of the budget for their payment.

The minister said that, so far the government has only issued guarantees, “which have not yet gone beyond that”, since the companies that contracted the debts have not yet exhausted all the possibilities they have to honour their commitments.

“Our problem is that we consume more than we produce. This is what is reflected in the level of inflation and the exchange rate”, Minister Maleiane explained. “Unfortunately, there are operators who take advantage of the debate on these

two guarantees to justify price hikes and the rising exchange rate, worsening the cost of living and [driving] pessimistic expectations about the future”, he added.

To address the budget deficit resulting from cuts in foreign state budget support, the government will seek to eliminate unnecessary expenditure and broaden the tax base without increasing the tax burden.

“In a containment situation, we must be able to access more internal resources, without increasing taxes. We need to broaden the tax base and avoid such expenditure as is avoidable”, Minister Maleiane said.

The minister stressed that any austerity measures would not affect the key sectors of health, education and defence and security. Speaking to the press after the parliamentary hearing, the Chairman of the Ematum Board of Directors, António do Rosário, told the Committee that the Ematum fishing fleet will be fully functional within three months.

Currently only nine of the 24 vessels are fishing in territorial waters while the remaining 15 vessels are being adjusted to international standards of tuna fishing.

Contrary to rumours, do Rosário said that Ematum was functioning as a business, and had been exporting fish to Europe and China, as well as returning part of the catch for domestic consumption.

Meanwhile, the company has presented before the government its need for funds to underwrite day-to-day operating costs, due to cash deficit, do Rosário said.

Source: Lusa/Diário Digital/Jornal Notícias/TVM

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Frelimo accuses Western countries of “importing Springs” to Mozambique

The secretary general of Frelimo’s Association of Combatants of the National Liberation Struggle (ACLLN) has criticised international donors for suspending their funding and wanting to “import Springs” to the country. Regarding the suspension of aid following the revelation of undisclosed government-guaranteed debts, on Friday 13 May, Notícias quoted Fernando Faustino as saying: “Today they want to import Springs to Mozambique, under the cover of public debt, but it is good to remember that this reaction [reactionary movement] will not pass”.

The head of ACLLN accuses Western countries and some international partners of seeking to destabilise the country to force a regime change, citing Iraq, the Ukraine and the “Arab springs” in Egypt and Libya as examples.

“Which country in the world has no debts?” Faustino asks, questioning the moral authority of donor countries who are themselves highly indebted and have contributed to the problems of the developing nations.

“Europe has debts, America has debts, Asia has debts … Why should Africa be blackmailed for having debts?”

Faustino also criticised international partners for their “deafening silence” on the attacks carried out against civilian and military targets in the centre of the country attributed by the authorities to Renamo gunmen. According to Faustino, ACLLN “notes that the strategy of these countries is destabilisation and forcing change of legitimately elected governments”, and calls on former combatants not to be distracted from their primary goal of peace

and development. The ACLLN also calls on the Renamo leader, Afonso Dhlakama, to disarm and resume talks with President Filipe Nyusi. In April, the government acknowledged the existence of a previously undisclosed debts of US$1.4 billion, which it justified on national security grounds.

The revelation of government-guaranteed loans contracted between 2013 and 2014 led the IMF to suspend the second instalment of a pre-agreed loan to Mozambique and to cancel a visit to Maputo.

The G14 group of State Budget donors also suspended its payments, followed by the US, which announced last week that it would review its bilateral support to the country.

In the letter formalising the suspension, the G14 cited “hefty debts” bearing government-guarantees incurred without the approval of the National Assembly, “in violation of the basic principles of partnership”, forcing donors to conclude that “the necessary conditions for the disbursement of funds for general budget support are not currently in place”.

Source: Lusa

Former president’s son implicated in Ematum, Proindicus and MAM weapons purchase

According to a probe into the weapons cache purchased via the government-guaranteed loan scandal, it is now widely known that Ematum, Proindicus and MAM engaged in dubious dealings with the Ministry of the Interior and the Ministry of Defence – ultimately facilitating said purchase through SISE. However, information uncovered by @Verdade and

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anti-government newssheet Canal de Moçambique suggests that the man who spearheaded the weapons purchase is none other than Mussumbuluko Guebuza (aka Shushu), the son of former president, Armando Guebuza.

According to @Verdade and Canal de Moçambique, Mussumbuluko facilitated the weapons purchase through his two companies: Msumbiji Investiments (account 44717836102, Standard Chartered Bank, Hong Kong) and Timabes AG (which holds an account with Valartis Bank, Liechtenstein).

The report suggests that Mussumbuluko imported a considerable amount of weapons in a process that is said to have also involved the Director-General of SISE, Gregório Leão; the then interior minister, Alberto Mondlane; and the then defence minister and current President, Filipe Nyusi.

Through a source close to the matter, Canal de Moçambique and @Verdade were able to access multiple photographs allegedly taken during meetings between Mussumbuluko and the arms suppliers.

At one of the main meetings, held in May 2014 at the Israel Weapon Industries (IWI) premises, Mussumbuluko was allegedly accompanied by a senior officer of the SISE, identified only as ‘Agy’. Agy was allegedly appointed by Leão to accompany Mussumbuluko during most of these business deals.

At this May meeting, IWI allegedly issued a certificate of qualification to Mussumbuluko following a “brief weapons test”.

According to @Verdade and Canal de Moçambique, the man who brokered the

meetings between Mussumbuluko and the IWI is a citizen from Belarus, identified only as “Alex”. It is said that Alex was involved in the entire process, from start to finish.

The report claims that IWI provided Mussumbuluko with several models, specifically assault rifles (namely Tavor, Ace, Galil, X 95 and Jerichos).

Training in Boane and Namaacha:

According to the report, following payments, the weapons arrived in Mozambique in September and October 2014 – during the time of the general and presidential elections.

The contract did not just provide for the purchase of weapons, it also included training. As such, two Israeli experts from academia IWI are said to have arrived in Mozambique at around the same time to train the recipients. The training supposedly took place in Boane and Namaacha (Maputo Province) and focused on instructing agents of the FADM on how to use the new weapons. According to the report, the unit also received sniper training. It is alleged that Mussumbuluku also participated in these training activities.

@Verdade and Canal de Moçambique suggest that it was this very unit trained by the IWI that twice attacked the Renamo leader, Afonso Dhlakama, and his convoy in Manica Province in September 2015. In fact, the report suggests that Dhlakama’s earlier accusations of Korea’s involvement in attacks on Renamo were not far off due to the association between IWI and the SK Group.

Conflict of interest:

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The article argues that, while the State can justify the purchase of weapons without a public tender by invoking “security reasons” (paragraph f) of paragraph 3, Article 9 of the Procurement Law), it will still have to justify Mussumbuluko’s involvement and the role played by his two companies in the acquisition of weapons. @Verdade and Canal de Moçambique maintain that Mussumbuluko’s involvement is a direct conflict of interest as the deal directly benefited an immediate family member of the president, who presided over the deal.

The claims made by @Verdade and Canal de Moçambique elicited a variety of responses from readers – particularly that of general discontent towards the situation and the current government. Every single response posted on @Verdade by the readers suggests that they fully believe the claims made in the article.

One response called for President Nyusi’s immediate resignation, while another called on the banks to freeze all assets and accounts belonging to the Guebuza family. One response called for those involved to pay the money back to the State, while another questioned why Attorney-General Beatriz Buchilli is not doing her job.

Source: @Verdade/Canal de Moçambique

Political parties organise demonstration in repudiation of debt situation

Approximately 30 of the country’s extra-parliamentary political parties organised for a demonstration to take place on 21 and 22 May in Maputo in repudiation of the current situation in the country, marked by military conflict, the recently revealed government-guaranteed debts

(and the issue of accountability), the high cost of living and the violation of human rights.

On the matter, the Secretary-General of partido ecologista (Ecologist Party), João Massango, said that: “We want the government and Renamo to immediately stop military hostilities … and for the government to go to Parliament to justify the debt”.

According to Massango, all information pertaining to the demonstration was referred to the relevant authorities – including the Attorney-General’s Office, the Ministry of Interior, the National Assembly and the Municipal Council.

Massango said that, as of Tuesday 17 May, the parties involved in the organisation of the demonstration were mobilising civil society organisations and the general population to join the movement.

The parties hope that all the inhabitants of the cities of Maputo and Matola will participate in the movement (corresponding to more than a million people). Massango argued that, given the relevance of the demonstration, a large turnout is expected.

Due to the fact that all the necessary channels have been followed, Massango urged the police to ensure that the march remains peaceful.

In addition to the Ecologist Party, the group of approximately 30 organisers include the PDD (led by Raul Domingos, the former number two in Renamo), MPD, PRD, ALIMO, MJRD, SOL, PADELIMO, PARTONAMO, PANAOC, PUMILD, PARTONAMO, PDNM, PPD, MONARUMO, PANADE, PALMO,

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PANAMO, UDF, UNAMO, CDU, PUR, PAREDE, PCD, PSM, PAC, PEMO, UM and PCM.

The march is scheduled to commence at 9:00hrs at the statue of Eduardo Mondlane (located on Avenida Eduardo Mondlane, in the Alto Mae neighbourhood). The route is expected to be as follows: from the statue of Eduardo Mondlane protestors will march through Avenida Eduardo Mondlane towards Avenida Guerra Popular, Avenida 25 de Setembro, Avenida Samora Machel, and end at the Praça da Independência (Independence Square).

According to reports, the country’s two biggest opposition parties, Renamo and the MDM, said that they would not be officially participating or supporting the movement. Other parties have distanced themselves from the demonstration, claiming that the organisers have a “foreign agenda”.

City Council rejects application:

On Thursday 19 May, the Maputo City Council rejected the application to hold the demonstration, saying that the document submitted by the organisers is insufficiently clear.

“In terms of the law, it is difficult to determine that this is a demonstration organised by political parties and whether the names presented in the application are the legitimate representatives of these parties”, reads a letter from the city council to the organisers.

The letter, signed by Mayor Daviz Simango, points out that only two of the 14 addresses are precise enough, the others being too general. “The uncertainty is compounded by the complete absence

of any political party details”, it goes on to say, before inviting the organisers to correct the mistakes.

A source from the protesting organisations told Lusa that the group had corrected the errors and resubmitted the application later that same day (Thursday).

“Everything is ready for the demonstration and now we are waiting for the municipality’s decision”, said a member of one of the parties organising the event, who declined to be identified.

Meanwhile, the spokesperson of the PRM, Inácio Dina, told Lusa that the corporation is awaiting notification by the municipality, adding that the authority does not allow demonstrations without proper legal authorisation.

“We have not been notified as yet. If they really want to protest, they need a permit from the municipality”, Dina said. Actions that disrupt public order, he added, would not be tolerated.

Interior Minister, Jaime Monteiro, discouraged participation in the demonstrations, saying that they were intended only to “disrupt stability and public order”.

“We want to cultivate an urban, civic attitude that focuses on what is important and benefits society”, the minister said.

According to the organizers, a total of about 40 extra-parliamentary parties and civil society organisations are hoping to demonstrate on Saturday and Sunday.

Massango attacked:

During the early hours of Friday 20 May, Massango was attacked by four armed

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men in the Mulumbela Zone (Maputo Province).

According to initial reports, the attack appears to have been a failed kidnapping attempt.

According to Massango’s Facebook page, he was accosted by men driving in two white cars (one Prado and one Corolla). The men ordered Massango to get into one of their cars, and when Massango refused, he was beaten with an iron rod. Massango subsequently screamed for help, at which point the assailants fled the scene.

According to unconfirmed reports, the march was scheduled to go ahead, despite the City Council’s rejection on Thursday. However, in the light of Friday’s attack (which has a strong political motive) it is not certain as to whether the march will proceed, or who will lead it if it does.

Source: VOA Português/Moz Massoko/Lusa/VOA Português

Addendum (20 May): According to Zitamar News Massango is at the Maputo City Hospital receiving treatment after the alleged kidnapping attempt.

According to Massango, he was attacked at approximately 9:00hrs while en-route to a press conference in the city where he intended to announce that Saturday’s march would go ahead. His car was blocked by the two previously mentioned vehicles. Four armed men ordered Massango to get into one of their cars, at which point he was assaulted for resisting.

According to Zitamar, Massango is convinced that the attack was related to

the march. As such, Massango now wants “nothing to do with the march”, which he termed a “peaceful mega-march”.

“Let the people take to the streets if they want. But I’m not leading it anymore”, he said.

Force of arms must not be used for political goals

On Saturday 14 May, President Filipe Nyusi declared that war and the force of arms must not be used to achieve political goals. Addressing a rally in Metuge district (Cabo Delgado Province), President Nyusi said that dialogue must be prioritised to solve problems, and that Mozambicans must forgive each other.

“The message I am bringing to this province is that Renamo must be disarmed because the Mozambican people do not want war and killing”, he added. “They want peace to reign among all Mozambicans”.

The government, he promised, will continue to give opportunities to all so that conflicts do not occur and social justice is installed. He stressed that decentralisation will continue to bring the people ever closer to power. President Nyusi said that it was under the government’s decentralisation approach that relatively new districts had been created in Cabo Delgado, such as Balama and Namuno. This exercise was being carried out across the country.

“A further example of this is the creation of municipalities which take important decisions for local life”, President Nyusi added. “In the past we only had the National Assembly, but today we also have the Provincial Assemblies. This is a gradual process that we are undertaking.

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We make mistakes and we correct them. It’s not necessary to use guns”. He maintained that Mozambicans need to unite and live in harmony. Peace was a requirement so that people could work and develop the country.

“We have brothers, in the centre of the country, who are not living at ease”, the President continued. “When they go to sleep, they do not know what awaits them during the night, because at any moment they may be attacked. These brothers of ours also cannot travel at will for fear of being attacked by the gunmen of Renamo”.

The fact is, President Nyusi continued, that there are Mozambicans who attack their brothers and destroy trucks carrying merchandise. “They prevent free circulation in Muxungué (on the main north-south highway, in the central province of Sofala) and at night, people are killed”. President Nyusi recognised that Mozambique is going through a difficult economic period, which he blamed on the country “importing more than it sells, which means it is consuming what it does not produce”.

“Money is short, the country has debts, the prices of our export products have fallen on the world market, in the south it has not rained, and in the north it rained too much, and production was affected by the excessive rain”, he said. President Nyusi added that, in order to deal with such problems, production must be diversified and expenditure reduced “so that we can have the money to build more schools, hospitals, roads, bridges and dams”.


Portuguese President acts as negotiator and upsets the generals

In neglecting to consult with his generals during his visit to Maputo, the Portuguese President has upset his own country’s army.

Portuguese President Marcelo Rebelo de Sousa’s visit to Maputo on 3 to 7 May left Lisbon with a bitter taste in its mouth. The Palácio das Necessidades (the Portuguese ministry for foreign affairs) was not consulted in organising this trip. Worse, according to sources inside the ministry that spoke to The Indian Ocean Newsletter, the trip was prepared in a “very personal and impulsive” way.

Moreover, in stating that he wanted to act as mediator in the armed conflict between the ruling Frelimo and the opposition party Renamo, President de Sousa profoundly offended the Portuguese army. He had failed to consult the Chief of Staff and instead opted to ask advice from the Italian ecclesiastical community Sant’Egidio in Rome and one of its representatives, the Archbishop of Bologna, Matteo Zuppi.

The Indian Ocean Newsletter asked the former head of Serviço de Informações Militar (SIM, the Portuguese military intelligence services), particularly during the period when negotiations were under way for a peace agreement with Mozambique in the early 1990s, retired General Joaquim Chito Rodrigues. He told us he considers that this is a veritable snub against the Portuguese army which has always felt side-lined by the Italian community in the negotiations between Frelimo and Renamo.


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Dhlakama appoints team to prepare meeting with President Nyusi

On Tuesday 17 May, President Filipe Nyusi wrote to Afonso Dhlakama, the leader of Renamo, requesting that he appoint representatives to a joint commission tasked with preparing the terms of reference for the resumption of dialogue.

President Nyusi has repeatedly called for the resumption of dialogue and for the immediate cessation of violent attacks carried out in the centre of the country by Renamo’s illegal armed militia.

In April, the government established a team of three representatives to prepare the ground for a face-to-face meeting between the two leaders.

However, Renamo refused to delegate any of its members to work on this task. It argues that there can be no further dialogue without the mediation of the Catholic Church, the European Union, and South African President Jacob Zuma.

In addition, Renamo has convinced itself that it is the rightful ruler of the six central and northern provinces where it claims to have won in the 2014 elections. Therefore, Renamo previously stated that dialogue is conditional on it taking power in those provinces.

In his letter to Dhlakama, the President argued that there is no need for mediation before the creation of the joint commission because dialogue would only resume based on the terms of reference agreed by the joint team.

Later on Tuesday afternoon, Renamo announced that it would present on Thursday 19 May, the team which will

prepare a meeting between Dhlakama and President Nyusi. The information was released by the Renamo leader himself during an exclusive telephone interview with STV.

Dhlakama began by refuting rumours that he had died: “I am alive, I was not even sick nor did I get sick. I am alive and in good health”. However, according to Mozambique News Reports & Clippings, Dhlakama did admit he was debilitated the last time he appeared in public because he had malaria. But he added “we are old, we have children. We never intended to stay in the bush” but were forced there by Frelimo.

He subsequently announced the news: “As for the creation of a team, I must reassure you, in two days I will announce [the names]. I could announce the three names for the negotiating team for the agenda, but I will not be able to. I will delegate my office in Maputo, which will be able to do this in two days. Thursday you, the radio, the press, STV, may receive the names of the three Renamo members who will arrange and discuss the agenda [of the Dhlakama-President Nyusi meeting] with the Jacinto Veloso group”.

“Now I think things are ready. That is why I am announcing that I received this letter at 11:30hrs in my office, in Maputo. So, the team will be created”, he said.

President Nyusi named his team on 4 March: former security minister, Jacinto Veloso; former justice minister, Benvinda Levi (who is now an advisor to President Nyusi on legal matters); and Alves Muteque, an official in the president’s office.

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Dhlakama puts at the top of the list for negotiation the issue of governing “our provinces – the provinces that voted for Renamo”. And he says he wants provincial elections in 2019 – in what appears to be a modification of his position.

He goes on to say that Frelimo claims that his proposals for elected provincial governments violate the Constitution, and if so the Constitution should be amended. But he sees Frelimo as equally violating the Constitution by “falsifying the vote” and packing the Constitutional Council with Frelimo members.

He reiterated the claim that Renamo is not attacking civilian targets but only military ones; he confirmed attacks on Nagi and Etrago buses because he said they carried soldiers. Meanwhile, as promised, on Thursday Muchanga announced parliament members José Manteigas, Eduardo Namburete and André Magibire as Renamo’s representatives to the joint commission.

Manteigas has been a Renamo MP since 1994 and is currently a member of the Standing Committee of the National Assembly. Namburete is a Renamo MP and an academic. He was part of the political dialogue team that was deactivated last year.

Magibire is a little-known individual, but is deemed highly trusted by Dhlakama. He has been Renamo’s electoral agent and is a deputy in the National Assembly.

Source: O País/Agencia de Informacao de Moçambique/Mozambique News Reports & Clippings/Canal de Moçambique/Lusa

MDM questions the “many shadows” over resumption of peace talks in Mozambique

The leader of the MDM and Mayor of Beira, Daviz Simango, believes that “many shadows” still surround the resumption of peace talks between the government and Renamo, warning of the risk of political polarisation and the exclusion of other interested parties from the dialogue.

“For us there are still many shadows, because each participant [the government and Renamo] made its demands, and suddenly, in a matter of hours, we see this situation”, Mayor Simango told Lusa, saying that he was surprised at how fast the announcement of the resumption of dialogue was made, arguing that: “now the most important thing is that the two parties do not think that they are alone in the matter of peace”.

Speaking on Thursday 19 May, Mayor Simango said he hoped that the talks between the government and Renamo would not mean “the exclusion of civil society and other political parties”, nor the pursuit of a hidden agenda by the two leaders.

“The concern is that this will be a process in which two people meet, come to an understanding, and none of it is released”, Mayor Simango said, citing as an example the recent revelation of undisclosed loans guaranteed by the Mozambican State, where “there were people who hid the deal and the debt”.

The MDM leader also cautioned that the past record of talks between the government and Renamo is an “experience which does not inspire confidence”, an allusion to the return to

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military confrontation following both the 1992 Comprehensive Peace Agreement and the 2014 Cessation of Hostilities agreement.

“We can replay the scenario where the two sides talk, hide what they say and then people are surprised by new acts of war, as has happened in the past”, Mayor Simango said, adding that he was disappointed that the announcement of resumption of dialogue had not been accompanied by a truce or a ceasefire, with attacks attributed to Renamo continuing in recent days.

Negotiations between the government and Renamo have been stalled for several months after the largest opposition party withdrew on the grounds of a lack of progress and what it saw as a lack of sincerity on behalf of the government.

The suspension of the dialogue was accompanied by a worsening of political violence, with clashes between Renamo and security forces, as well as mutual accusations of abductions and assassinations on both sides and attacks on civilian targets in the centre of the country attributed by the authorities to the opposition’s military wing.

Despite the possibility of mediation having been discounted by President Filipe Nyusi at this stage, Renamo believes that the resumption of dialogue does not preclude the involvement of the international community in later stages of the newly re-formed Joint Committee’s work.

Source: Lusa

EU spokesperson on the appointment of negotiation teams for the peace talks in Mozambique

Statement – 19 May 2016

The steps taken both by the President of Mozambique, Filipe Nyusi, and the leader of Renamo, Afonso Dhlakama, to restart the peace dialogue is a critical development. It is now essential for both parties to commence preparatory talks at the earliest opportunity. A conducive environment for such peace talks requires the restoration of trust between all stakeholders.

Now is the time for both sides to work resolutely towards a political solution and to abandon all military means. A meaningful peace dialogue remains the only route to durable national reconciliation, a precondition for the Mozambican people to enjoy peace, stability and prosperity.

The European Union will continue to support Mozambique's political, economic and social development.

Source: eeas.europa.eu

Friends of Mozambique should help the debate, but not mediate – Andrea Riccardi

On Wednesday 18 May, the founder of the Sant’Egidio community, Andrea Riccardi, said that: “friends of Mozambique” should help the debate, but rejected the need for mediation in the conflict.

Riccardi, who in 1992 mediated the peace agreement that ended the Mozambican civil war, met with the Portuguese President Marcelo Rebelo de Sousa on Tuesday 17 May, in Lisbon, to discuss the

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political and military crisis in Mozambican, considering it “a serious situation”.

“There are tremendous, brutal facts, there are dead, the situation is serious, but I’m not pessimistic”, the historian said, adding that he had confidence in the renewed negotiations between the government of Mozambique and the main opposition party after Renamo leader, Afonso Dhlakama, decided to accept the invitation of President Filipe Nyusi to resume peace talks.

Riccardi said that he was very worried about the tension in the country, but believed “a solution will be found”.

“If a solution could be found to the civil war, then a solution will be found to the current tension”, Riccardi told reporters in Lisbon, where he was giving a lecture on the pontificate of Pope Francis.

“Mozambique worries us a lot”, said the founder of the Sant’Egidio Community, citing the weakness of the country’s financial situation and the growing instability of the Mozambican State.

“We follow Mozambique closely and we have faith”, Riccardi said.

Source: Lusa /Ecclesia

“There is no reason to resort to violence in the country” – Macamo

On Thursday 19 May, the Speaker of House, Veronica Macamo, said that there is no reason for Mozambicans to engage in violence to overcome different political views.

Speaking shortly after receiving the Ambassador of the United States in Mozambique, Dean Pittman, Macamo

argued that dialogue was the only way to overcome the current situation.

“If there is a problem we must sit together and discuss it. It is very important that we discuss. Two brothers have different points of view. What is the point of view of our fellow citizens? Moreover, what point of view do politicians have?” asked Macamo.

Macamo stressed the importance of peace, saying that without it there can be no economic, political or social development.

Macamo said that she was very optimistic in terms of the developments being made towards restoring dialogue between Renamo and the government. She maintained that the Renamo leader’s response to President Filipe Nyusi’s request to create a negotiation team is an important step towards the restoration of effective peace in Mozambique.

Meanwhile, Macamo revealed that the Standing Committee of the National Assembly will meet in Maputo on Monday 23 May, to deliberate on the government’s explanations on the debt scandal.


“Defects remain in district administration” – President Nyusi

On Saturday 14 May, President Filipe Nyusi said that, during his visit last week to Niassa Province, he had noted that defects remain in district administration.

Speaking to reporters at the end of a working visit to the province of Cabo Delgado, President Nyusi said that district administrators should understand that the reason they are in the districts is to manage wealth and human resources.

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The districts, he stressed, must work on the basis of indicators for the various areas of development, which requires great commitment, effort and energy on the part of the administrators.

The President said that, in undertaking their work, the administrators must observe careful budgetary management, making rational use of the available resources.

“The administrator has the duty to know what budget is available to him so that, when the time comes to give an account of his work, he can go into detail. Then it can be known what he has done, how he did it, and what is left to do”, President Nyusi stressed.

“We are not yet satisfied with the culture of saving”, said President Nyusi. “When we are in crisis, we have to restrict expenditure. On this visit we are trying to reduce costs. Many of the resources we are using are of local origin and do not come from outside”.

In addition, the number of ministers accompanying the President on these provincial visits has been reduced. The restrictions also affected the reporters covering the visits. Where possible, journalists based locally were used rather than bringing teams from Maputo, as used to happen in the past

Such savings “are worthwhile to reduce the costs of the visits and to gain time”, said President Nyusi.

The President expressed satisfaction at what he had seen on the ground in the far north. “Things are happening”, he said, “and the desires of the population are part of the activities that are being carried out”.

President Nyusi noted that, in the rallies he had addressed, “the people stressed the need for effective and lasting peace, and encouraged us to insist on dialogue and not war”.


President Nyusi in China - Official programme

On Monday 16 May, President Filipe Nyusi arrived in Nanjing, capital of Jiangsun Province, on his five-day state visit to the People’s Republic of China.

President Nyusi’s visit to China comes at the invitation of the Chinese President, Xi Jinping, and is intended to strengthen existing ties of friendship, co-operation and solidarity between the peoples and governments of the two countries.

During his visit, President Nyusi held official talks with his counterpart followed by meetings with the president of the National Assembly, the prime minister and Chinese businesspeople. The Mozambican head of state also participated in the opening of the World Conference on Tourism.

On Tuesday morning President Nyusi addressed the Mozambique-China Business Forum before paying a visit to the Military Academy of Nanjing.

Speaking during the Mozambique-China Business Forum, President Nyusi revised Mozambique’s 2016 economic growth forecast down to “between 6 and 7%”, below the value set in the State Budget (7.8%), but higher than most international forecasts.

The President justified the revision with the “occurrence of exogenous shocks”

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and the weak recovery of the world economy.

Meanwhile, the decline in the price of raw materials (amongst other factors) has led to a 35% depreciation of the metical against the US dollar, while foreign exchange reserves fell by 25% last year, and the recent disclosure of government-guaranteed loans of US$1.4 billion, not recorded in public accounts or reported to the IMF, has discredited the country with financial markets and international donors.

In his speech, President Nyusi celebrated Mozambique’s economic ties with the Asian economic giant.

“We are pleased to say that currently, China is a strategic partner on the economic front, through investment and trade”, he said.

Later on Tuesday afternoon he visited the Jiangning City Urban Exhibition Hall in Nanjing, followed by an early-evening meeting with the governor of Jiangsu province and a dinner and meeting with Mozambican students in Nanjing.

On Wednesday the President, who was accompanied by his wife, Isaura Nyusi, travelled to Beijing, where he was received by his counterpart, President Xi Jinping, in the People’s Palace. Their meeting was followed by official talks between the two delegations, the signing of a number of co-operation agreements and a state banquet.

On Thursday, the President met the Chinese Prime Minister at the opening ceremony of the International Conference on the Development of Tourism. President Nyusi also visited the headquarters of the China National Oil Company and

participated in the second China-Mozambique Business Forum.

On Thursday afternoon, the President laid a wreath at Tiananmen Square in honour of the heroes of the Chinese people, before holding courtesy meetings with executives of public companies. In the early evening, he met the Mozambican community in Beijing.

On Friday, the President and his entourage departed by train for the capital of Shandong Province, where the president visited the Jinan Rolling Stock Company and a vocational school. In the afternoon, he held a meeting with the provincial governor of Shandong Province and on Saturday, the last day of his visit, he witnessed a demonstration of modern agriculture in Zhangqiu before visiting the Jin Rong Foodstuff Co. factory.

President Nyusi was accompanied on his visit by the ministers of Foreign Affairs and Cooperation, Oldemiro Balói; Industry and Commerce, Ernesto Tonela; Public Works, Housing and Water Resources, Carlos Martinho; Culture and Tourism, Silva Dunduro; the Deputy Ministers of Agriculture and Food Security, Luisa Meque; Economy and Finance, Maria Isaltina Lucas; as well as members of parliament, staff of the presidency and other state institutions.

Source: Agencia de Informacao de Moçambique/Lusa/Diário Digital

What did Mozambique and China agree to in Beijing?

On Wednesday 18 May, Mozambique and China agreed to work together to combat all types of international crime and strengthen communication on peace and

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security in Africa between the two countries.

The understanding was reached during official talks between the two countries’ delegations, held at the People’s Palace during President Filipe Nyusi’s state visit.

A statement issued at the end of the talks says that the two countries agreed to strengthen exchanges between law and order and defence and security institutions such as the military, police, intelligence and migration services.

According to the document, the two sides also agreed to strengthen co-operation in capacity-building so as to safeguard stability, boost information sharing and the training of personnel and liaise on equipment and technology.

The two states unanimously agreed to further strengthen mechanisms for political consultation between their foreign affairs ministries and boost the Joint Economic and Commercial Commission, in order to maintain communication and strategic co-ordination in all areas and on issues of common interest so as to allow the timely resolution of difficulties and problems that may arise in the co-operation process between the two countries.

They also pledged to safeguard impartiality, international justice, and the rights and legitimate interests of developing countries.

On the financial front, the two states agreed to strengthen financial co-operation, encourage the establishment of financial institutions in each other’s country, support companies of both parties in the use of national currency in payments, investment and trade, and

actively discuss new financing models, including the use of loans to expand financing channels.

China will support Mozambique in increasing agricultural production, particularly of cereals, cash crops and livestock, as well as building capacity for the storage and processing of agricultural products, thereby contributing to agricultural modernisation.

In the field of tourism, Mozambique and China agreed to hold promotion activities in their national territories, and create facilities for their citizens travelling between the two countries and regions. China is willing to encourage Chinese citizens to travel to Mozambique and support Chinese enterprises investing in Mozambique in the construction of hotels, resorts and other tourist infrastructure.

The parties decided to extend further their human and cultural exchanges, and promote co-operation in the fields of culture, education, health, youth, local government, universities and media.

In the areas of education and health, China will provide more scholarships for Mozambicans and will continue to send medical teams to Mozambique. Further co-operation in the areas of disease prevention and the treatment of malaria and AIDS, among other conditions, will be discussed.

The co-operation commitments made by the two countries include the adoption of effective measures to enhance the inspection of entry and exit of quarantine animals and plants, to allow the entry of food and agricultural products into both markets, and to expand the scale of bilateral trade and contribute to the achievement of trade balance.

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China will continue to grant zero tariff rating for 97% of all taxable items Mozambique exports to China, and Chinese companies will be encouraged to raise their production of Mozambican products for export.

Mozambique is committed to continue adhering to the principle of “one China” and oppose any form of Taiwanese independence, supporting the Chinese government’s efforts to achieve the peaceful development of relations between the two sides in the Strait of Taiwan and the reunification of the country.

Mozambique is also committed to supporting the People’s Republic of China in solving territorial and maritime disputes with the countries directly concerned, in accordance with bilateral agreements and regional consensus and through consultation and friendly negotiations.

In turn, China will continue to steadfastly support the efforts of the Mozambican government in safeguarding national security and stability, as well as its struggle against foreign interference.


Paulino Macaringue appointed Ambassador to Madagascar

On Monday 16 May, President Filipe Nyusi named Paulino Macaringue as the new Ambassador Extraordinary and Plenipotentiary of Mozambique in Madagascar.

According to a statement from the Presidency, Ambassador Macaringue will perform his new functions from the Mozambican embassy in Pretoria (South

Africa), where he is currently the representative of Mozambique.

Ambassador Macaringue is also the Mozambican High Commissioner in the Republic of Namibia.

He previously held the position of Chief of the General Staff of the FADM.

His appointment to Madagascar comes at a time when diplomatic and economic relations between the two countries is increasing.

Source: A Bola/Folha de Maputo

Mpumalanga Director-General to lead technical delegation to Mozambique

The Mpumalanga Provincial Administration Director-General, Thulani Mdakane, will lead a technical delegation to Mozambique over the weekend 21 to 22 May, to finalise and renew areas of co-operation between Mpumalanga (South Africa) and Maputo.

This is a follow-up meeting after the Mozambican technical delegation, led by the Permanent Secretary, Claudina Maria de Sao Jose Mazalo, visited and consulted the Mpumalanga provincial government in March this year, where a need to update the memorandum of understanding for co-operation was discussed.

The meeting will discuss general considerations on the review of the co-operation between the two provinces and conclude discussions of a high level programme for joint implementation by the two provinces. Among others, key areas of co-operation focus on agriculture, transport logistics, environmental conservation, development of tourism and culture, development of trade and

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industry, education, science and technology, youth and sports, health and local government security. During the visit to Mozambique, the Mpumalanga technical delegation will also visit the Maputo harbour, which is a corridor for Mpumalanga exports, as well as visit projects that involve vegetable and chicken production in Moamba district.

Mpumalanga Province is currently establishing the International Fresh Produce Market and it is expected that investment opportunities will be created for Mpumalanga and Mozambican farmers and businesses. The establishment of the Nkomazi Special Economic Zone will also be key in terms of investment opportunities in manufacturing and agro-processing.

The technical delegation will comprise of heads of the various departments, some representatives from Mbombela Local Municipality and Ehlanzeni District Municipality, MEGA and MTPA.

Mpumalanga Premier, David Mabuza, and Maputo Governor, Raimundo Diomba, will sign the MoU into effect after the technical delegations have finalised the agreement.

Source: Mpumalanga News

South Africa denies entrance to Mozambicans holding emergency certificates

South African immigration officials have denied entrance to over 200 Mozambicans travelling with emergency certificates. According to Rosa Lucio, the head of public relations at the Mozambican National Immigration Service (SENAMI), “the South African authorities have been refusing entrance to Mozambican citizens with emergency

certificates since the beginning of this month”.

Lucio lamented that the South African authorities have not contacted their Mozambican counterparts to discuss the issue. She pointed out that: “these measures are causing serious inconvenience to travellers who are taken by surprise at the border”.

She highlighted that the issue is covered by bilateral accords between the two countries, and added that: “at the moment we are redoubling our efforts to normalise the situation through the appropriate channels”.

Lucio stated that the South African immigration service believes that those refused entry are not travelling under emergency provisions but are visiting the country to do shopping. However, she said that this does not make sense as they possess certified documents from SENAMI.

SENAMI has suspended issuing emergency certificates and will only resume once the current problem is resolved.


Authorities suspend granting of Mozambican citizenship

The National Directorate of Civil Identification in Mozambique (NCID) has announced that it has suspended the granting of Mozambican citizenship to foreigners, in order to reorganise the process.

“The entities responsible for granting Mozambican nationality are being reorganised. The State is not granting

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citizenship to anyone”, NCID spokesperson, Alberto Sumbane, said. It was also revealed that the suspension has been in force since January. Sumbane said that only applications on the basis of marriage to Mozambicans are being processed.

In an unrelated matter, Sumbane said that the directorate is concerned about the prevalence of forged identity documents, having recently confiscated 44 forged birth certificates in Zambézia and Maputo.

Source: Lusa/O País

SECURITY

83 summary executions in Manica, Sofala, Tete and Zambézia – Canal de Moçambique

According to Canal de Moçambique, the centre of the country is the site of persistent violations of human rights, specifically kidnappings and executions at the hands of death squads.

Canal de Moçambique reports that: “the victims are typically members of opposition parties or connected to them”, adding that: “from January until now [May], 83 people have been executed in the provinces of Manica, Sofala, Tete and Zambézia”.

16 people, of whom five are known to the Attorney-General’s Office, have fled their homes in the four provinces for fear of summary execution. According to the report, these figures were released on Tuesday 10 May, by the President of the Human Rights League of Mozambique, Alice Mabota.

“The increasing number of kidnappings and execution of opposition members by alleged death squads alarms us”, said Mabota, adding that these acts of “arbitrary arrest, false imprisonment and execution” are punishable by domestic law and condemned under international law.

Mozambique has ratified the International Convention against Torture, Cruel and Degrading Treatment and its operational protocols. The announcement comes at a time when the media reported on an alleged mass grave in Manica, which the League says it does not doubt exists, promising to work towards clarification as soon as possible.

“From January to date, the League has been notified of 83 executions in Manica, Sofala, Tete and Zambézia, and taken in 16 fugitives from the provinces looking for protection”, Mabota says. Of this number, five were sent to the Attorney-General’s office due to the urgency of their cases.

Approximately 11,000 Mozambicans, mostly from Tete Province, are refugees in Malawi, and have told the media that they fled the country fearing death and the destruction of their property.

About 45,000 school-aged children from these provinces of Manica, Sofala, Tete and Zambézia are not attending classes as a result of unrest in the four provinces, undermining their constitutional right to education.

Source: Canal de Moçambique

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Government acknowledges criminal aspects in the case of the 13 bodies discovered in Manica

The Interior Minister, Jaime Monteiro, recently admitted that there are criminal aspects in the case of the 13 corpses found scattered around the bush in Macossa district (Manica Province). As such, the minister noted that, although the bodies had already been buried (without any autopsies or attempts to uncover their identities), investigations will continue.

“Although the motive and circumstances of the crime are not known, there are criminal aspects. The police can follow up the clues and clarify the matter”, Minister Monteiro told reporters at Praça dos Heróis at the Mozambique Police Day ceremony on Tuesday 17 May.

“The burial of the bodies does not mean the end of the investigation. The work will continue and, in due course, we will have more information”, the minister said.

Source: Lusa

Renamo wants inquiry into possible police death squad

On Tuesday 17 May, Renamo demanded an independent investigation into a spate of unexplained killings and the possible existence of a police death squad.

Renamo leader, Afonso Dhlakama, said an inquiry separate from a police investigation was needed into the killing of 13 people, whose bodies were discovered recently in Macossa district (Manica Province).

Renamo accuses the ruling Frelimo party of burning homes and killing civilians in a campaign against Renamo guerrillas, violence that has forced thousands of Mozambicans to flee into neighbouring Malawi. Each party accuses the other of attacks on their members in various parts of the country as a simmering conflict between the old civil war foes has escalated since a fiercely contested national election in 2014.

“We need Frelimo to accept the creation of a commission of inquiry (into the 13

http://www.garda.com/gw

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deaths) not just composed of members of Parliament, but also members of civil society and journalists”, Dhlakama said in an interview with television channel STV.

Police spokesperson, Inácio Dina, said that an investigation into the deaths was ongoing and that the government did not oppose any independent probe.

Source: Reuters

Renamo attacks leave three dead in Zambézia and Manica

According to Interior Minister Jaime Monteiro, during the course of the weekend 14 to 15 May, Renamo gunmen killed three people on the country’s major highways in attacks believed to have been aimed at paralysing transport in the nation’s central regions.

On Saturday 14 May, a South African registered car was attacked in Chinguno, Mossurize, (Manica Province), and a woman passenger was killed. The woman was shot dead while she was travelling between Espungabera and Chiurairue. The deceased was holding a four-month-old baby when she was shot and killed. The baby was unharmed.

The spokesperson for the Manica provincial police command, Leonardo Colher, confirmed that the attack on a private transport vehicle had taken place and that the police were pursuing the ambushers. Colher called on people living in the area to assist the police in tracking down those that were sowing terror in the district. At the end of April, the police denied that Renamo gunmen are active in Mossurize following rumours that Renamo burnt down a police post in Chaiva locality and the premises of the Chiurairue administrative post.

Meanwhile, on Sunday 15 May, a Filipino teacher was killed and five others were seriously injured in an attack on a Nagi Investimentos bus in Murrotone, Mocuba (Zambézia Province). According to reports, the gunmen signalled for the bus to stop, however, the driver refused and the men opened fire, killing the woman instantly.

According to local media, the attack took place close to a base of the Renamo group, which has clashed regularly with government troops in recent months.

According to Minister Monteiro, a third attack over the weekend on a military vehicle killed a member of the FADM. The minister informed the media that police patrols have been strengthened in the area in order to ensure the security of citizens.

According to Canal de Moçambique, over the course of the weekend, a total of six buses were attacked in Morrumbala and Mocuba (Zambézia), and two in Gorongosa, (Sofala Province), all on the main EN1 road between Nampula and Beira. The buses belonged to five different companies, including the two which Renamo leader, Afonso Dhlakama, said were transporting soldiers.

João Mahunguele, the commander of the Zambézia PRM, assured the media that “the province is under control” and all is right despite the political and military situation. Renamo spokesperson, António Muchanga, told the press that he didn’t know who was behind the violence. Meanwhile, according to Joselito Chad Jacinto, the spokesperson for the Philippine embassy in South Africa, the bus victim was a teacher of 40 years working in Mozambique. The victim’s name could not be revealed at the time as

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the embassy was still busy with internal processes’. The Philippine government is already co-ordinating with the family of the deceased for the repatriation of her remains. A large number of passengers who had previously purchased bus tickets have demanded refunds, refusing to travel for fear of attacks.

Source: Folha de Maputo/O País/Bloomberg/Agencia de Informacao de Moçambique/AFP/Rappler/Canal de Moçambique/ Mozambique News Reports & Clippings/GMA News/Diário da Zambézia

Two die in Renamo attack against Etrago bus in Morruthone

On Wednesday 18 May, two people were killed in Murrothone, Mocuba district (Zambézia Province) in an attack attributed to Renamo gunmen. The gunmen opened fire on an Etrago bus, travelling the Beira/Nampula route, killing one person. A second passenger died en-route to the district of Ile. The bus driver managed to control the vehicle and drive to Ile district.


Three die in Renamo attack against Correios de Moçambique bus

On the morning of Thursday 19 May, a bus belonging to the company Correios de Moçambique was attacked by suspected Renamo gunmen. The bus was travelling from Maputo to Nampula when it came under fire along an unspecified road. It is not clear as to which province the attack occurred in. The attack left three passengers dead (one woman and two men). This is the first recorded attack against Correios de Moçambique’s fleet.

Source: Folha de Maputo

Renamo member escapes alleged assassination attempt in Manica

According to reports, an alleged Renamo member escaped death in Manica Province after being kidnapped and repeatedly shot. The Renamo member, identified as Bento Sabão, has been transferred to a hospital in Maputo for emergency medical treatment.

Sabão, who is originally from Catandica, was a Renamo guerrilla during the 16-year civil war, but says he is now dedicated to politics. According to Human Rights League president, Alice Mabota, Sabão was kidnapped and sent for interrogation, after which he was taken into the jungle and shot in the arm and leg. He survived, and was brought to Maputo for medical treatment by the Human Rights League.

Sabão, who is said to be recovering well, says he still lives in fear. By his own account, plainclothes policemen have been seen in Maputo Central Hospital at night, and attempts to remove him from hospital have allegedly been foiled thanks to calls to the Human Rights League made by other patients in the ward. Mabota says the episode is proof of the existence of death squads operating in the country.

Source: O País

Renamo men kill chief of Samoa town

An unspecified number of gunmen (allegedly from Renamo) recently stormed the regional headquarters of the Samoa locality (Tete Province) and murdered the Town’s chief. Speaking on Wednesday 18 May, at the opening of the Third Ordinary Session of the Provincial Assembly, the governor of Tete, Paulo Auade, confirmed

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the murder. Meanwhile, the administrator of Moatize, Maria José Torcida, also revealed that the head of the secretariat was recently killed in a fire. The cause behind the blaze is not known at this time.


General Weng San ‘secretly’ in Zambézia

According to Diário da Zambézia, the Deputy Commander General of the PRM, José Weng San, arrived in Zambézia Province on Wednesday 19 May, on a visit that “can [only] be considered secret, since it is taking place without an announcement and in all confidentiality”.

San arrived in the province in the afternoon and immediately met with colleagues in the Provincial Police Command. When local reporters tried to ask about the purpose of the visit they were prevented from talking to San on the grounds that, according to the spokesperson for the provincial command, Ernesto Serrote, “the presence of the press was not necessary”. It has been speculated that San’s visit is linked to the Renamo attacks in the area.

Source: Diário da Zambézia

Government pledges continuing support for PRM’s peace keeping efforts

Speaking in his capacity as Commander in Chief of the Defence and Security Forces, President Filipe Nyusi said that the government would continue to support the PRM in its peace keeping efforts.

President Nyusi was speaking in Maputo on Sunday 15 May, after receiving the felicitations of the PRM’s senior ranks as

part of the corporation’s 41st anniversary celebrations.

Speaking on the occasion, the General Commander of the PRM, Júlio Jane, assured the President that the corporation would continue to devote its every effort to combating crime and maintaining order and tranquillity.

Source: Folha de Maputo

Nanjing Military Academy impresses President Nyusi

On Tuesday 17 May, President Filipe Nyusi praised the Nanjing Military Academy for its contribution to stability in the world.

In a brief speech made during his visit to the facility, President Nyusi referred to the historical connection of Jiangsu Province with Mozambique ever since the liberation struggle and in the formation of the FADM. President Nyusi was given a full guided tour before signing the guest book and expressing his appreciation for the academy’s efforts in establishing world peace.

Founded in 1936, the Nanjing Military Academy is a training centre for cadets and officers which entrants from many countries, including Mozambique, have attended. Historically, the academy was a training school for Chinese Army cadres founded by the leader of the Chinese Revolution, Mao Tse Tung, to counter the threat of Japanese invasion. In 1949, it was renamed the University of Military Policy, becoming the College of Military Infantry in 1952 before settling on its current name in 1978. It has seven specialist colleges including tactics, military command, military administration, political work and ground operations. The

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Nanjing academy is the largest in China in terms of training foreign cadets and officers, currently hosting 190 trainees from 72 countries.

The academy has had a long and intimate connection with Mozambique in the training of FADM officers, with at least 94 Mozambican officers having graduated there, including former defence minister Aguiar Mazula and retired generals Tobias Dai and Lagos Lidímo. Major Ribeiro Sabonete Buanara, who is currently training at the academy, told reporters that he was happy to be attending courses there, because he is learning new lessons every day and

acquiring invaluable experience on military matters.

“It’s a very good experience. I feel at ease. We are learning new things. Today, war is a matter of information and communication technologies”, he said. In addition to speaking at the Mozambique-China Business Forum in Nanjing city, President Nyusi visited the Jiangning One Station Service and Urban Exhibition Hall, and met the governor of Jiangsu Province and Mozambican students studying in the city.


CRIME

MAP 1: KIDNAPPING INCIDENTS IN CENTRAL MAPUTO 2014 – 2016

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GRAPH 2: REPORTED KIDNAPPINGS PER YEAR

GRAPH 3: TIME OF KIDNAPPINGS 2014 - 2016

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Note: This graph excludes kidnappings in which the time of the kidnapping was not reported

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GRAPH 4: KIDNAPPINGS PER GENDER / AGE-GROUP 2014 - 2016

*Please note: the data present in the graphs and maps is not 100% accurate owing to the high number of unreported cases and irregularities in the documentation of these events. This graph illustrates the successful kidnapping incidents ONLY and not attempted/aborted/intercepted kidnappings.

Governor Auade challenges police to arrest those who kidnap and murder albinos

On Tuesday 17 May, the Governor of Tete Province, Paulo Auade, challenged the police to capture those responsible for the kidnapping of children with albinism. The governor made this call during a meeting at his office with senior police officers to mark the 41st anniversary of the creation of the PRM.

Governor Auade added that he also recommended the purification of police ranks through the exemplary punishment of corrupt police officers that tarnish the image of the service. He added that: “we call for measures that will discourage bribery, extortion, and illicit payments from citizens. These are crimes that threaten public order and tranquillity”. The governor also lamented

that armed attacks endanger and discourage foreign direct investment and delay the social and economic development in both the province of Tete and the country in general.

This was a clear reference to the country’s main opposition party, Renamo, which operates an illegal militia responsible for a string of murderous attacks in the centre of the country. Among the other issues addressed by the governor is the need for increased police training and for more liaison between the police and local communities. Crimes against albinos for their body parts have continued despite the successful arrest and prosecution of offenders. The body parts of albinos are believed to possess magical properties and are used in black magic ceremonies.

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<18 19-36 37-54 55-72 >73

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Note: This graph excludes kidnappings in which either the gender or age of the victim was not reported

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In turn, on Wednesday 18 May, the Governor of Cabo Delgado Province, Celmira Silva, urged the PRM to redouble efforts and operations for the protection of people with albinism.

Governor Silva said that the PRM should clarify all cases of missing persons with albinism and neutralise the perpetrators of such heinous crimes so that they may be punished to the full extent of the law. In response, the provincial commander of the PRM, Joaquim Sive, reaffirmed his corporation’s readiness to fight all forms of crime, corruption and social ills. Sive also took the opportunity to highlight the lack of human and financial resources, which negatively impacts the PRM’s ability to fulfil its duties.

Meanwhile, in Sofala Province, Governor Maria Taipo urged the PRM to establish and foster closer relations with the community in order to encourage better communication and collaboration with the aim of preventing and fighting crime. Governor Taipo also insisted upon the purification of ranks in order to restore dignity and confidence in the PRM.

Source: Agencia de Informacao de Moçambique/Jornal Notícias

50 arrested in Nampula over crimes against albinos

The Mozambican police have arrested 50 people since the beginning of last year (2015) in the northern province of Nampula in connection with the trafficking and murder of albino citizens. The Nampula provincial police spokesperson, Zacarias Nacute, told a press conference on Wednesday 11

May, that all but three of the cases reported last year have been solved.

He added that the police will continue to implement measures “to eradicate this inhuman practice and to bring the criminals to court to receive exemplary justice”. Crimes against albinos for their body parts have continued in Nampula despite the successful arrest and prosecution of offenders. According to the police, since the beginning of the year there have been two reported cases of the desecration of graves of albinos in order to remove bones. These crimes took place in Monapo district and Nampula City.

In the latter case, eight suspects were detained after the community cemetery in Namutequeliua district was targeted on 7 May. The body parts of albinos are believed to possess magical properties and are used in black magic ceremonies.


Albino grave exhumed in Tete

On Saturday 14 May, unknown assailants illegally exhumed the grave of an albino (buried in Tete Province in 2015) and removed the leg bones. According to the provincial commander of the PRM, Lurdes Ferreira, three men were arrested this week in possession of human bones worth MT3 million. The detainees were apprehended while they were attempting to sell the bones in Moatize district. It is believed that the bones in question comprised of the two leg bones stolen on Saturday.

Source: Folha de Maputo/@Verdade

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PRM arrest eight suspected robbers in Beira

On Thursday 12 May, the PRM of Beira (Sofala Province) arrested eight suspects in connection with a number of armed business robberies. According to police reports, the men are accused of targeting various foreign owned shops in Beira (specifically Asian owned stores). One of the suspects is a former prison guard named Zacarias Felix. Felix is also believed to have facilitated a prison break in November 2015.

Source: @Verdade

Elderly man kills wife and commits suicide in Maputo

On Thursday 12 May, 65-year-old Lawrence Mabasso murdered his wife with an axe before committing suicide in the couple’s home, located in the Polana Caniço neighbourhood (Maputo Province). According to neighbours, the couple, who had recently celebrated their 40th anniversary, fought often and it was well-known that Mabasso frequently beat his wife as he was jealous of her behaviour around other men. According to the police, Mabasso contacted his son on Thursday morning, asking him to come to the house. Upon arriving at his parent’s house, he found the door locked. The young man proceeded to break into the property, where he discovered the bodies of his mother and father.

Source: @Verdade

Mother arrested for beating her child to death in Gaza

On Monday 16 May, a 38-year-old woman was arrested in Caniçado village, Guija district (Gaza Province),

on charges of murder. According to police reports, the detainee beat her 10-year-old daughter to death with a wooden rod before dumping the body in a local cemetery. Neighbours informed the police that the woman murdered her daughter after discovering that the child had spent MT240 that had been put aside for the purchase of electricity.

Source: @Verdade

Body discovered in Ferroviário area, Maputo

The body of an unidentified man in his 30s was discovered on the morning of Tuesday 17 May, in the Ferroviário area (Maputo Province). According to the initial police report, the man appears to have been killed with a machete and his body shows signs of perimortem injuries, suggesting that he was physically assaulted by his attackers. The motive behind the murder is not yet known. According to local residents, this is not the first murder victim to have been discovered in the area.

Source: @Verdade

Two Portuguese nationals held on forgery charges

Two Portuguese citizens are being held by police in Zambézia Province for forging documents in order to acquire Mozambican identity cards. The pair, whose identities were not revealed, were apprehended during the course of the week 6 to 13 May, when they applied for identity cards. 29 cases involving similar acts of forgery by Malawian, Tanzanian and Zimbabwean citizens have been registered by the authorities, predominantly in Zambézia. The figures were revealed by National

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Directorate of Civil Identification spokesperson, Alberto Sumbane, who added that last week alone, 44 cases of falsification of birth certificates were recorded.

According to Sumbane, Zambézia is the most affected province with 39 cases, followed by Maputo Province with three and the city of Maputo with two. Sumbane added that 52 cases of birth certificate duplication were recorded in the reference period, 50 in Zambézia and two in Gaza.

Source: A Bola

Internet facilitates organised crime in Mozambique, analysts say

According to experts, state institutions are involved in crime via information technologies controlled by people within the banking, financial and legal sectors.

Mozambique justice sector analysts believe that organised crime has support from within the institutions of the Mozambican State themselves and is consequently practically unbeatable.

Ericino da Salema, of non-governmental organisation IBIS, believes that communication technologies facilitate organised crime, which has tentacles in the banking and justice sectors.

“What one should do to move forward is to make serious investment in human capital. It is ridiculous that our police do not have permanent access to the internet. How can someone who does not have access to the internet investigate those who use the internet in the most sophisticated way to commit crimes?” he asks.

Mozambican judges complain of danger in the performance of their duties. Luis Mondlane, president of the Mozambican Association of Judges, says judges’ work puts them in danger and is demanding that the police are given the means to do a more professional job.

“It makes little sense that the courts and judges are totally unprotected in the exercise of their functions, when they are dealing with very serious criminal issues such as organised crime”, he says.

Criticisms of judges:

But journalist and analyst Fernando Lima do not spare the judges criticism. According to him, they do not deserve special protection because they administer very little justice.

“This whole sector is more concerned with their trappings than they are with giving service and combating lawlessness, corruption and crime. Society demands more from this sector’, he argues.

Alice Mabote, president of the League of Human Rights, is also critical of the judges. Judges who argued that kidnappings were carried out mostly by Mozambicans of Indian origin are now finding that they are also victims. Organised crime affects them, as well as other social strata. “This has to worry us”, she says.

The chairman of the Bar Association, Flávio Menete, thinks that as long as organised crime has financial power it will be very easy to corrupt the state agencies involved “in the search for truth in order for them to be punished”. “So we need to have a lot of people,

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with sufficient technical preparation, and there must be the material and financial resources for them to function”, he argues. Last April, organised criminal gangs killed public attorney Marcelino Vilanculos, two years after Judge Dinis

Silica was killed in similar circumstances. Both crimes are still unsolved.


HUMAN RIGHTS, SOCIAL DEVELOPMENT AND NGO’S

EU will continue projects despite withholding aid

The European Union (EU) has said that it will continue to fund development projects in Mozambique, including those of civil society organisations, despite suspending direct financial support to the State.

Speaking to the media in Maputo on Wednesday 18 May, the EU ambassador in Mozambique, Sven Kühn von Burgsdorff, said despite the organisation’s suspension of funds to the country as a result of lack of transparency over an undisclosed debt of US$1.4 billion, it will continue to bankroll development initiatives with special impact on civil society.

Ambassador von Burgsdorff said that the EU has US$22 billion available for such development projects and with direct support to civil society organisations and other projects, it wants to boost the lives of Mozambicans. However, he noted that the EU would maintain its suspension of funds to the Mozambican State Budget.

“We must differentiate the treatment of funds for the country’s general State Budget and funds for projects to provide services to the Mozambican people”, the EU official said after presenting a 2015-24 portfolio of projects for Maputo

Province. The Maputo provincial director of Economy and Finance, Ludovina Bernardo, said that the portfolio is based on the promotion of local economic development in areas such as agriculture and infrastructure.

“Our strategic plan is aligned with the government’s Five-Year Programme and the European Union is funding rural development projects also in the provinces of Nampula and Zambézia, but it has also other financial assistance components such as technical support and capacity building”, Bernardo added. She noted that co-operation between Mozambique and the European Union dates back 30 years, during which the EU had invested approximately US$3 billion in the country.


Mozambique wrestles with drought, debt and conflict

Two years ago, the nation of Mozambique was riding high after a peaceful presidential election in October, the promise of offshore natural gas wealth, and what looked like an end to a long-simmering conflict that arose from decades of civil war.

And then El Niño hit. The irregular weather phenomenon began in 2015 and battered this heavily agricultural

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nation with severe floods followed by severe drought.

As if that weren’t enough, a resumption of fighting in the nation’s centre and south, a US$2 billion debt crisis and donor pull-out have created a perfect storm for those desperate Mozambicans who were affected by El Niño.

Abdoulaye Balde, the World Food Programme’s (WFP) Mozambique country director, told VOA News in Johannesburg (South Africa) that the drought cannot be viewed in isolation.

Fighting in central and southern Mozambique has made it harder for the organisation to deliver aid, now that it has to bolster security and take more precautions. Additionally, the recent revelation that Mozambique’s previous government secretly took on approximately US$2 billion worth of debt has scared donors, Balde said. Several major donors have already pulled their direct government support over the scandal.

“I would think a trust issue has been created between the country and the donors”, he said. “We come in and say, look, the country needs help; people need help. A donor might be confusing the government and the people who need it”. However, Balde said that the UN is talking to the major donors that have pulled out – such as Sweden and Britain – about rerouting those withdrawn funds to UN agencies that can deliver humanitarian aid. He told VOA that the amount might exceed US$100 million.

Liesl Louw-Vaudran, a consultant for the Pretoria-based Institute for Security Studies, said that Mozambique needs

long-term solutions, not just short-term aid. Those solutions, she said, will come when the government can restore security and boost its infrastructure.

“A huge country like Mozambique is suffering also from lack of infrastructure, and the wealth is not being redistributed, especially in the rural areas”, Louw-Vaudran said. Andrew Odero, a regional food security analyst for the WFP, said he fears that weather conditions will worsen before they improve – and that maize prices will hit an “unprecedented” high in southern Africa.

“Looking at the wider macro-economic context, we also see that in general, inflation rates are high; market prices have more than doubled in particular countries”, Odero said. “I’m quite worried about Malawi, Mozambique, Zimbabwe. I’m also worried about countries’ fiscal ability to have these additional resources needed to address the need”.

He said that he expects the next humanitarian assessment, due in early June, to show a greater number of people in crisis as the typically dry winter season settles across the region.

Source: VOA News

UNHCR needs US$15 million for Mozambican refugees

United Nations High Commissioner for Refugees (UNHCR) is seeking US$14.9 million in humanitarian assistance to support the Mozambican refugees currently living in Malawi.

“Through this appeal we hope to raise enough funds to support the efforts of the Malawian government in its

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humanitarian response. Malawi has hosted refugees for decades and we need to support them in their generosity to assist those most in need”, said Fadela Novak-Irons, UNHCR’s senior emergency co-ordinator.

Making the appeal in Lilongwe (Malawi) on Thursday 19 May, the official said that the majority of Mozambican refugees are very poor with hardly any means to meet their basic needs.

Novak-Irons said that while Malawi currently hosts approximately 12,000 Mozambican refugees, “the overall estimated planning figure based on current assumptions is that by the end of 2016 there could be up to 30,000 refugees in Malawi”.

Malawi’s Co-ordinator for Refugees from the Ministry of Home Affairs, Bestone Chisamile, said that the country needs support in order to ensure that the basic needs in terms of food and other non-food items for Mozambican refugees are met in line with international obligations.

Since July 2015, Malawi has been receiving asylum seekers from Mozambique’s Tete Province, and to a lesser extent from other provinces, who have settled in the border districts of Mwanza, Nsanje and Chikwawa.

The fighting between Renamo and government forces erupted last year when Renamo leader, Alfonso Dhlakama, vowed to seize power in six provinces in Mozambique. Besides the Mozambican refugees, Malawi also looks after over 25,000 asylum seekers, from the war-torn Great Lakes region of Africa.

Source: News 24

More than 900,000 drought victims waiting for food assistance in Mozambique

On Monday 16 May, the National Institute of Disaster Management (INGC) revealed that the country needs 15,000 tons of food to guarantee assistance to 900,000 people plagued by the severe drought affecting the southern and central regions.

“The government plan covers about 472,000 people and the remaining number depends on our partners for help”, the INGC’s Paulo Tomas revealed, adding that the logistics in distributing monthly assistance is the main cause behind the delay.

According to Tomas, because of the shortages, the focus will be on providing assistance to the most vulnerable people such as the elderly, children and pregnant women.

The central and southern provinces of Mozambique are the worst affected, with only 10% of farmers harvesting anything from the first growing season, according to the INGC. The drought led the government to declare a Red Alert in April, a strategy designed to boost assistance and provide approximately US$580 million for its food assistance contingency plan.

“Our intention is to cover all those affected”, the INGC spokesperson said, noting that in the north the situation is largely under control but still requires attention.

Meanwhile, the health sector has designed an emergency response to cover the affected provinces. It is based on the assessment that 11 million

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people are in a situation of moderate to severe malnutrition. Of these, 1.4 million are children up to the age of six. US$1 million has been made available for this emergency response. However, a further US$8 million is still required. In particular, the provinces of Manica and Tete require special attention.

Source: Lusa/Agencia de Informacao de Moçambique

Mozambique and Swaziland partner in fight against drought

Mozambique and Swaziland will harness water sources across the Lomahasha border as part of a project aimed at supplying 45,000 people from both countries with clean water by 2024.

The Principal Secretary in the Swazi Ministry of Natural Resources and Energy, Winnie Stewart, says that forms part of the pledge the Southern Africa Development Community (SADC) made during the 27th Water Resources Technical Committee meeting, held on Wednesday 18 May.

The SADC countries pledged to help each other recover from the El Niño phenomenon, which resulted in a devastating drought in the region.

The three-day meeting was held at the Happy Valley Resort in Ezulwini (South Africa). Countries in attendance included South Africa, Mauritius, Lesotho, Mozambique and Namibia.

“In this regard we have advanced initiatives to jointly implement projects with our neighbouring states to ensure that the benefits are spread across countries”, said Stewart.


IFRC pledges CHF110 million to help drought-stricken Southern Africa

The International Federation of Red Cross and Red Crescent Societies (IFRC) has announced a major, CHF110 million, four-year initiative to support National Red Cross Societies respond to the drought that is affecting millions of people across southern Africa. The initiative will increase Red Cross relief activities significantly, alongside an important expansion of long-term efforts to strengthen the resilience of one million vulnerable people.

IFRC Secretary General, Elhadj As Sy, made the announcement following a mission to Malawi and Zimbabwe where he travelled to some of the areas worst-affected by a drought driven by one of the strongest El Niño phenomena.

An estimated 31.6 million people across the region are currently struggling to get adequate food, and this figure may climb to more than 49 million people by the end of the year. Lesotho, Malawi, Swaziland and Zimbabwe have all declared states of emergency, as have seven of South Africa’s nine provinces. Mozambique declared a Red Alert, the highest level of national emergency preparedness, in its central and southern provinces.

In addition to scaling up relief efforts, including emergency distributions of cash, the IFRC’s drought resilience initiative places heavy emphasis on supporting at-risk communities to better withstand future challenges.

One project, implemented by the Malawi Red Cross Society with the support of the Finnish Red Cross, saw vulnerable

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families receive goats that they could breed and sell for income. Each family is expected to return some of their livestock to the scheme, ensuring that more families can then receive these precious assets.

Sy was joined in Malawi and Zimbabwe by a number of partners, including the CEO of Devex, Raj Kumar, and UNICEF’s El-Niño Senior Advisor, Shadrack Omol. The participation of partners highlighted the importance of improving co-ordination and co-operation for an effective response.

“The challenges we are now seeing in southern Africa won’t be easily overcome, and they most certainly won’t be overcome if we continue working as we have in the past. A new kind of humanitarian response is needed: one that is built on a coalition of actors committed to breaking the silos we currently work in, and who are committed to taking long-term local action to strengthen resilience – now and for the future”, said Sy.

The southern Africa drought plan falls under the One Billion Coalition for Resilience – an IFRC-led initiative that brings together aid organisations, governments, the private sector, academia and community groups to support one billion people over the next 10 years to take action to strengthen their safety, health and well-being.

In South Africa, Lesotho, Swaziland, Malawi, Mozambique, Namibia and Zimbabwe, last year’s meagre rainfall has been followed by an El Niño-driven drought that has delayed planting and stunted crops.

Source: Reuters/www.ifrc.org

SADC regional situational update on El Niño-induced drought

The SADC region is experiencing a devastating drought episode associated with the 2015-16 El Niño event which is negatively impacting on livelihoods and the quality of life.

The region experienced a delayed onset of the 2015-16, rainfall season, followed by erratic rains. Analysis of rainfall performance shows that the October to December 2015 period, which represents the first half of the cropping season, was the driest in more than 35 years in several southern parts of the region. During the same period, higher than average temperatures were consistently experienced across the region. These dry conditions mostly affected Angola, Botswana, Lesotho, Madagascar, Malawi, Mozambique, Namibia, South Africa, Swaziland, Zambia and Zimbabwe.

Following the dry conditions from the beginning of the season in October 2015, heavy rains set in across most parts of the region for close to 30 days, between 21 February and March. In parts of eastern Botswana and south-western Zimbabwe, the rainfall was three times the normal amount for this period, while in northern Botswana, parts of southern Angola, northern South Africa, southern Zambia and western Zimbabwe, rainfall was close to twice the normal amount.

Despite this improvement in rainfall, water availability for hydro-power generation for Zambia and Zimbabwe is still below normal. Most areas received above-average rainfall during this period. The rains received helped to increase the amount of water available

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for human and livestock use, as well as improving pasture conditions. However, these rains were too late for crops which had already wilted and died or were not even planted due to earlier dry conditions.

Although national, regional and international forecasts had by September 2015 predicted poor rainfall performance and high temperatures for the 2015-16 season, the severity of the drought conditions has been such that it has overwhelmed the disaster preparedness capacity in most of the affected Member States.

The 2015-16 El Niño follows closely on a previous poor rainfall season. The effect of the previous drier-than-normal season for most SADC countries resulted in reduced crop production, increased use of stored food reserves and savings used to buy food and non-food (such as seed and other agricultural inputs) commodities, reduced water levels, reduced pasture availability and increased strain on the revenue of most governments that were in the process of recovering from the earlier effects of global financial crises.

The situation was further compounded by the fall in prices of commodities on the global market, an aspect that has reduced the revenue base of most governments, thereby increasing the strain on the revenue of most governments and their capacity to support socio protection programmes for the people affected by the drought.

Cereal supply and demand analysis for the 2015-16 marketing year showed that the region recorded an overall cereal deficit of about 7.8 million tons. The 2015 regional food security and

vulnerability assessments showed that the number of food insecure people during the 2015-16 marketing year was more than 27 million people, which is about 9% of SADC’s total population.

The already serious problem of acute and chronic malnutrition in the region is expected to worsen, increasing the risk of mortality in young children and the elderly. Steep food price hikes are expected in the 2016-17 marketing year due to poor grain production and the depreciation of the regional currencies against the US dollars.

This El Niño event has seriously crippled agricultural production including crops and livestock; and dried up many water sources and reservoirs, with serious impacts not only on agricultural but energy supplies. Increased incidences of diseases are likely due to water shortages, lack of safe drinking water, and inadequate sanitation and poor hygiene practices; all which contribute to higher risk of preventable waterborne diseases.

Additionally, the drought heightens financial constraints caused by food price increases that have recently been recorded. Furthermore, the production and supply of seeds, fertilizers and other inputs have also been adversely affected. These factors will constrain recovery in the medium term for the affected communities and thereby negatively impacting on agricultural plans for the next cropping season. The welfare of millions of households is in serious jeopardy due to the current crippling food shortages and future recovery input shortages.

Source: Southern African Development Community/ReliefWeb

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Zimbabwe drought: five million face food shortages

Nearly five million people in Zimbabwe – half of the country’s rural population – will need assistance by next year as a result of the ongoing drought in southern Africa, the UN has said. Zimbabwe is one of the country’s worst affected by the drought currently facing southern Africa – including Malawi, Zambia and South Africa – which has placed more than 30 million people at risk.

Rainfall is not expected in the country any time soon and President Robert Mugabe has declared a “state of disaster”. Residents reportedly do not have access to proper food for days at a time.

“A lot of people are hungry”, says Ambuya Grace, who lives in one of the affected villages. Another local, Virgilance Tsabora, said she too is in need of assistance.

“No one has come to help us. Some people got food, but many people did not”, said Tsabora. The government says it is trying to buy grain from neighbouring countries. The drought has been worsened by the strong El Niño weather patterns, a temporary climate change of the Pacific Ocean in the region around the equator.

In February, Zimbabwe’s Vice President, Emmerson Mnangagwa, appealed to local businesses and charities for more than US$1.5 billion in aid to save more than a quarter of the population from starvation. At a news conference in Harare Deputy President Mnangagwa said that the government “requires a total of [US$1.57 billion] with effect from February to December

2016”, adding that millions were in need of food and water. The United Nation’s World Food Programme said in January that approximately 14 million people in Southern Africa are facing hunger due to poor harvests in 2015, caused by the latest El Niño.

Source: Al Jazeera

EU and UNICEF provide €30 million to tackle child malnutrition in Mozambique

The European Union and the United Nations Children’s Fund (UNICEF) have pledged to disburse €30 million for the reduction of chronic malnutrition in Mozambique. This follows an appeal by Mozambique’s technical secretariat for food and nutritional security concerns for about 43% of children suffering from chronic malnutrition in the country.

In a statement seen by journalists on Sunday 15 May, UNICEF said that the central provinces of Zambézia and Nampula are the most affected.

A joint delegation made up of the Deputy Representative of UNICEF, Michel Le Pechoux, and the European Union’s Economic Advisor in Mozambique has been touring the two regions to draw a balance sheet of the needs of the communities living there.

“The local governments in these areas have submitted the criteria proposed for the selection of districts to be covered with the implementation of the project for reducing chronic malnutrition in the country”, Le Pechoux was quoted saying in the statement.

The UNICEF official indicated that the selection of Zambézia and Nampula is

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due to the fact that the two provinces face multiple problems related to chronic malnutrition.

It is widely believed that the systematic challenges of food security and the poor water and sanitation conditions and inadequate health services are among other underlying causes for the chronic malnutrition in Mozambique.

Both officials also explained that in addition to the performance in the area of health, the programme envisages intervention in other multi-sectoral

sectors such as sanitation, the environment and agriculture.

According to Le Pechoux, the programme implementation will begin in 2017 and will last until 2020.

“I am convinced that the implementation of the joint programme between the two partners of the Mozambican government in those parts of the country will galvanise the increasing access and use of services of nutrition, water and sanitation”, he said.


WILDLIFE AND ENVIRONMENTAL PROTECTION

South Africa misses rhino conservation opportunity ‘of a lifetime’

Please note: the opinions expressed in the following article are those of the author (Michael Eustace) and do not necessarily represent those of Rhula Intelligent Solutions.

The South African Cabinet, after a long process of opinion gathering, has decided not to put a proposal to CITES on rhino horn trade. Why?

The South African Minister of Environmental Affairs, Edna Molewa, said at a recent media briefing that this was not for fear of losing the vote at the Cites Conference of the Parties (CoP) to be held in September, nor was it because of sensitivity around proposing a controversial issue at the CoP, which South Africa is to host and where the country would like to be hospitable.

As a country, South Africa is not sure exactly how much horn stock it has and mischief makers like to use that as an indication of inherently weak governance, which weakness suggests that the country could not manage a proper, well controlled, trade. The minister saw that as a minor issue.

A clear idea of how South Africa intends to trade and the absence of a trading partner was a more substantial issue. The Department of Environmental Affairs (DEA) has had several years to decide on a trading model and has seen a paper by Michael Eustace on a “smart trade” model which was published in Business Day in July, 2014, and was widely supported. That model involves a monopoly of supply selling to a cartel of retailers in the Far East, of which the cartel could include some of the traditional Chinese medicine hospitals that are owned by Far Eastern governments. The cartel would establish a clear channel for legal horn and

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incentivise Far Eastern governments to close down the illegal trade as, by design, they would be invested in the legal trade.

There was confusion around whether South Africa had to name its trading partners as part of the proposal. It was widely talked about as being a problem, but CITES in Geneva has told Eustace that it is not a requirement. One would like to think that China and Vietnam would be happy to trade with South Africa if CITES first agrees to a trade proposal? Why should it prefer an illegal trade?

There was “considerable uncertainty” in Cabinet as to how successful trade would be at reducing poaching. Well, the ban on trade has been a failure with over a thousand rhino being poached each year. Could trade be worse? On the contrary, trade would reduce the number killed because trade will satisfy the market with legal horn gathered from natural deaths, from stocks and from the harvesting of a relatively small number of rhino. (The horn re-grows.) South Africa could satisfy the market, on a sustainable basis, without the need to kill one rhino. A controlled high price would limit demand.

Cabinet was worried about who would control the trade and who would profit. The “smart trade” model suggested a Central Selling Organisation (CSO) that would belong to the South Africa government and to governments of any other African range states that wanted to participate, but the suggestion was that an experienced trading entity should be hired to manage the trading for a small commission of, say, 3% of turnover. That would have resulted in 97% of the income going back to parks

and to private ranchers. There was probably jealousy that the private owners would benefit from trade, but they have had the costs of caring for the rhino and will be taxable in the normal way. Private ranchers own 33% of South Africa’s rhino.

Corruption was another concern. “Smart trade” does not allow for any corruption. The CSO only pays the state and provincial parks and the Private Rhino Owners’ Association and nobody else. (Cynics have suggested that the lack of possibilities for corruption was more likely to have been the problem.)

Then there was the illogical requirement from Cabinet that before trade could be considered in the future, five key requirements had to be met:

Increased security: but trade will reduce poaching by supplying the market and there will be funding to pay for security. Horn trade would generate ZAR2 billion per annum. Security now costs ZAR1.2 billion per annum and there is no income;

Profits for communities: but these profits are only possible with trade and not with a ban on trade. Given trade, parks can enter into joint ventures with the communities in buffer zones around the parks;

Biological management (needs to improve): but we have been managing rhino populations for 50 years and are really good at it. Given trade we can populate other parks in Africa with rhino and make these parks financially viable;

Laws need to be (more effectively) enforced: but recently there has

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been a large increase in convictions with a 78% success rate and the sentences have been severe. That is a great improvement which will improve further with lower levels of poaching. Filling jails should not be an ambition; and

The country needs to know how to manage demand: but there are only one million consumers who currently buy the total annual supply of 1,300 horns and there are probably another one billion existing traditional Chinese medicine consumers in the queue, at lower prices. Managing demand, other than through the price mechanism, is futile. There is nothing more to know.

These requirements cannot possibly be the prerequisites of trade. They are either advantages that will only come from trade or are irrelevancies. They seem to be an attempt to justify the time as not being right for trade.

The wording in the media release was tortuous – perhaps the work of many trying to instil logic into an illogical decision. The minister comes across as sincere, competent and energetic. It is difficult to believe that her heart can be in the outcome. She said there was a “genuine desire” to take all the issues to Cabinet, but they found them “too wide” (to comprehend) and so decided to do nothing about a trade proposal. A two-page document might have produced a different result?

In my opinion, South Africa has missed the conservation opportunity of a lifetime.

Source: Business Day/Michael Eustace

South Africa conviction rate ‘pitiful’ for rhino crimes?

When it comes to statistics, the devil is always in the detail – or in the spin, when it comes to politics. The fight against rhino poaching is no exception.

On Sunday 8 May, the South African Minister for Environmental Affairs and Tourism, Edna Molewa, gave her regular progress report on the fight against rhino poaching.

She announced that between 1 January 2016 and May 2016, the number of rhinos killed was down by 23% and that great progress is being made in preventing rhino killings as well as prosecuting the poachers. As has become the practice at these regular briefings, great attention was paid to the success of the Hawks and other law enforcement agencies in apprehending perpetrators as well as the conviction rate by the NPA.

This time round the minister highlighted, amongst others, that between April of last year and March 2016, 49 cases involving 103 accused were finalised. Of the 103 accused 80 were found guilty, therefore, she claimed a 78% successful conviction rate.

It seems that the NPA is having tremendous success with rhino prosecutions, since the minister announced earlier this year an 88% conviction rate for 2015. A phenomenal achievement … or is it?

The problem lies in the NPA’s and therefore, the minister’s definition of “conviction rate”. The NPA defines the conviction rate or successful prosecutions as the percentage of cases

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finalised with a guilty verdict divided by the number of cases finalised with a verdict.

In other words, the percentage only takes into account those cases that went to trial and where there was some form of verdict. It has no relation to the number of crimes committed (in this case the amount of rhinos killed), the number of reported crimes or even the number of arrests made.

This means that the conviction rate does not reflect a very accurate picture. Let’s for example, use the 2015 statistics as announced by the minister in January 2016. In 2015; 1,175 rhinos were killed illegally. This led to 317 arrests. The minister announced that 48 accused persons were convicted during this time, therefore claiming the previously mentioned 88% conviction rate. However, this means that only 54 people were prosecuted – 17% of those arrested in 2015.

If the conviction rate of the total of those arrested for rhino crimes is calculated, the percentage stands at a pitiful 15%.

Of course this issue is not unique to the Ministry and Department of Environmental Affairs. It cuts across all departments, and criminologists repeatedly point out that this manner of calculating convictions rates means that the NPA is less likely to prosecute cases that they feel that might stand a chance of not seeing a conviction. As such, even where prima facie cases exist, the NPA might decline to prosecute since it might not look so good when the stats are compiled.

It is true that some of these cases will date back to crimes committed in

previous years. This, together with the fact that the minister does not tell us how many cases were in fact prosecuted and to how many rhino killings these cases relate, make it very difficult to get an accurate picture.

So why is this so important in this context?

Firstly, because it means that 83% of those arrested were not prosecuted and are, therefore, free to repeat their activities. Of course some might not have been guilty, but those who were and got away with it will be likely to try again. Secondly, because it might create the impression that the battle against rhino poaching is being won, when in fact it is being lost.

It cannot be denied that some progress is being made. But the progress is painfully slow. Even though the amount of rhinos killed this year is down by 23%, a staggering 363 rhinos have already been slaughtered in 2016. And there is clearly no slowdown in the attempts made by poachers. According to the minister, there was an increase of 28% in poaching activities in the Kruger National Park in the first four months of this year. As she puts it “a staggering 1,038 (activities) in the Kruger National Park alone”. This is up from 808 activities for the same period last year.

Many organisations such as TRAFFIC and WWF have also pointed out that despite the progress made by the South African government, rhino poaching hit an all-time high across Africa in 2015.

As Major General Johan Jooste, who is in charge of SANParks’ anti-poaching activities, said during a press conference in January: “There is a

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difference between success and victory”. We, therefore, need to be careful not to be lulled into complacency by statistics.

Source: Annamiticus/Conservation Action Trust

Ivory sales by Zimbabwe and Namibia could ‘create demand spike’

In early May, the governments of Zimbabwe and Namibia took the unusual step of petitioning the Convention on the International Trade of Endangered Species (CITES) to remove their elephants from CITES protection, which currently prohibits them from selling elephant ivory. Arguing that the international ban – imposed in 1989 – on the sale of ivory has been a costly and unsuccessful 26-year “experiment”, officials from the two Southern African countries are trying to make a case for releasing their ivory stockpiles onto the global market and thereby turn a profit.

They argue that the CITES Appendix II listing, which allows only limited trade subject to particular conditions, has not allowed them to realise the asset value of their well-managed elephant populations, numbering around 84,000 in Zimbabwe and 24,000 in Namibia. The removal of these elephants from CITES protection would allow them to auction elephant products to any willing buyers, built on the rationale that open trade is the only means by which to overcome the current poaching epidemic.

This rationale relies on a theoretical possibility that open auctions would satiate demand and drive down the price of ivory, thereby reducing the incentive to poach. But shutting down

the trade entirely would also reduce the value of ivory to zero, and the incentive to poach elephants would no longer exist. Whether Zimbabwe and Namibia’s arguments hold water requires further interrogation.

First, markets for ivory are fast closing, largely as a result of pressure from elephant range states and the international conservation community. While new demand coming out of Asia in recent years has fuelled a dramatic increase in elephant poaching across Central, East and West Africa, this trend is being short-circuited. China, once a reliable source of demand for ivory, announced in May last year that it would close its domestic market to the trade and shut down its carving industry.

The US – another, if often less recognised, market for ivory – has followed suit, with the Chinese and US governments making a joint announcement to this effect in September. The combination of the two largest markets working together to block the trade will help close the circle of illegal and legal trade in ivory. Legal domestic markets, particularly in East Asia, have until now provided a convenient cover for illegal ivory, undermining the efficacy of the international ban.

If Zimbabwe and Namibia are successful in their proposals, Chinese authorities may choose to limit the duration of their impending ban in response to the signal that there are willing sellers available. This would limit the ban’s efficacy, as it would incentivise speculators to stockpile ivory until the ban is terminated, thereby driving up elephant poaching. For domestic trade bans to drive the ivory price to zero,

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they should be implemented indefinitely. But this requires all the supply signals to be consistent, which requires all elephant range states to be on the same page.

Second, the relative success both Zimbabwe and Namibia have enjoyed in managing their elephant populations, which has produced large herds (and sometimes large headaches), is by no means guaranteed. Spurred on by unexploited opportunities further south, evidence shows that the poaching pandemic is moving into southern Zambia and Zimbabwe. Indeed, the once healthy elephant populations in Kenya, Tanzania, Mozambique and Gabon have been devastated over the last several years as demand for ivory has escalated.

Zimbabwe and Namibia contend, however, that poaching has escalated precisely because ivory has not been available through open auctions on a regular basis. They reckon that the two one-off sales in 1999 and 2008 failed precisely because they sold too small a volume onto the market to satiate demand; this created an artificial sense of scarcity of supply, which drove up prices and fuelled poaching.

But being allowed to sell ivory by open auction may well fuel a further explosion of demand, and there is insufficient data on which to assess whether supply would be able to keep pace with potentially expanding demand. Moreover, whatever stigma effects currently exist through a combination of demand reduction campaign efficacy and an impending domestic trade ban, are likely to be undermined if supply is made legal.

Evidence from China shows that the price of raw ivory in China has fallen by 50% since May last year in the wake of the official announcement to close the domestic market. The new proposals threaten these gains. It is also curious that these countries blame the 1989 CITES ban for the poaching pandemic, and yet have also experienced elephant population growth.

Finally, alarmed by the poaching trend, most African governments of elephant range states are themselves taking collective action through the Elephant Protection Initiative to cut off the trade within their countries. They also insist on maintaining the highest level of protection under CITES – an Appendix I listing that allows no trade. Zimbabwe and Namibia argue, on the contrary, that the prevention of trade in elephant products under Cites has produced a perverse incentive for local communities not to value elephants.

This allegedly accounts for the poaching threat, for instance, in two regions in Zimbabwe where elephant numbers are rapidly declining. However, it is hard to see how preventing the trade in ivory constitutes a perverse incentive. A truly perverse incentive would exist if communities and parks perceived that they could make more money from selling elephant products than conserving living elephants.

Zimbabwe and Namibia have introduced explicit division between African range states at a time when being of one mind is crucial to turning the tide against elephant poaching. Though the proposals are likely to fail at the CITES conference in September, they have the potential to create a spike in demand for ivory, especially if these countries

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choose to abandon or ignore CITES regulations after the convention meeting. This initiative is a step backwards at a time when a growing coalition of countries from China and the US to Tanzania and Gabon are finally recognising the need to end the ivory trade altogether.

Source: Business Day

Elephant numbers continue to decline in Mozambique despite anti-poaching efforts

On Thursday 12 May, a Strategy Review Workshop and Action Plan for the Conservation of Elephant in Mozambique was held in Maputo Province.

During the event it was revealed that poachers continue to target animals protected by Mozambican law, particularly elephants. This is despite numerous anti-poaching efforts on the part of the authorities. According to statistics, Mozambique’s elephant population has decreased from 20,000 individuals to approximately 10,300 over a five-year period (representing a decrease of 48%).

The most affected regions include conservation areas in northern Mozambique. The co-ordinator of Mozambique Biodiversity Project (MoBio), Afonso Modope, warned that, if the current situation prevails, the country risks being shunned by the European Union and the United States due to a lack of clarity in the management of these animals. Carlos Lopes Pereira, from Mozambique’s National Administration for Conservation Areas (ANAC), told reporters that: “poaching in Mozambique is a difficult

reality to control”. Pereira said that they situation is complicated further by the fact that “poachers are now using another technique: poisoning”.

Pereira warns that if nothing is done, Mozambique will have no elephants in the not too distant future, adding that the plight of rhinos, whose average daily death toll is estimated at three, is no less serious. According to Pereira, in Mozambique, poaching is largely the result of widespread poverty, the growth of the international ivory market, and the fact that Mozambique borders a number of countries considered to be “poaching centres” (such as South Africa and Zimbabwe).

According to Pereira, the only way to end the killing is prevention, detection and exemplary punishment, especially for the organisers of the trade, and that amending the existing legal framework is paramount in this context.

According to him Mozambique loses approximately 2,000 elephants to poaching per year (which works out to roughly six animals per day).

Source: @Verdade/VOA Português

Mozambique mulls tax on charcoal use

The Ministry of Land, Environment and Rural Development recently announced that it is planning to introduce a new tax on commercial users of firewood and charcoal in a bid to counter the loss of the country’s forest areas. The proposal is intended to encourage the switch to more sustainable and less polluting fuels and among those facing the new charge are bakeries, pastry shops and

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restaurants, which will be encouraged to switch to gas or electricity.

On Wednesday 18 May, the National Director of Forestry, Juliao Cuambe said that the fee could be included in the new forestry legislation which is being updated to meet the current challenges.

He added that this new legislation should be drawn up before the end of the year. An inventory of Mozambique’s forests in 2015 revealed that 219,000 hectares of forest were being lost every year due to various factors including the production of firewood and charcoal. Since then various actions have mitigated the loss of trees.

However, a study published in April by the Centre for Agricultural Studies and

the Management of Natural Resources found that 138,000 hectares of forest were still disappearing each year.

According to the study, the use of firewood and charcoal led to a loss of 9,000 hectares per year and was the fourth largest factor in forest degradation. The most important factor was shifting cultivation, followed by urban expansion and timber operations.

It is hoped that levying a charge on commercial users will lead to a switch away from using firewood and charcoal, and lead to a drop in demand. This would reduce prices and encourage the producers to abandon the trade.


HEALTH

Health authorities roll out yellow fever checks, vaccination for travellers

Mozambican health authorities recently announced that they have started checking travellers visiting the country from areas that have registered cases of yellow fever in order to prevent the possible spread of the disease to Mozambique. The National Director of

Public Health, Francisco Mbofana, said that apart from Angola (2,267 suspected cases and 293 deaths); the Democratic Republic of Congo (42 cases), Kenya (two) and China (11) have also reported cases of the disease, with some unconfirmed cases in Uganda.

As Mobofana points out, the free movement of people in a globalised world means there is always the risk of

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the disease spreading, and in Mozambique’s case, close links with Angola, including direct flights, justify precautionary measures.

Among the measures adopted are the requirement for visitors from at-risk countries to be vaccinated 10 days before travelling, and for travellers passing through at-risk countries to have proof of immunisation.

According to International Health Regulations, travellers who have not been immunised in their country of origin may be vaccinated at the land or air border if they then submit to a set of recommendations and procedures while in the country.

“In terms of intervention, we are vaccinating those travelling to areas at risk of infection. We are not immunising citizens as a preventive measure, because we do not have an outbreak of yellow fever”, Mobofana explained.

In Angola, the government undertook the vaccination of seven million inhabitants, because it faces the reality of a virus still circulating in some districts spreading easily throughout the country.

Mobofana said that the Mozambican Health Ministry was responsible for making the vaccine available in all provincial capitals, in order to meet the needs of members of the public wishing to travel to at-risk areas. Mbofana said that while Mozambique has no recorded cases of yellow fever, there may be infected individuals in the country who have not developed symptoms.

Source: AFP/Jornal Notícias

Consumption of sweet potatoes promoted to combat chronic malnutrition

The production and consumption of orange-fleshed sweet potatoes (OFSP) is being promoted in Mozambique to tackle the country’s chronic malnutrition problem.

According to statistics quoted on Tuesday 17 May, by the International Potato Centre (CIP), about a quarter of Mozambique’s population face food insecurity during the current year. In addition, it is estimated that 43% of children under the age of five suffer from chronic malnutrition. Vitamin A deficiency affects 69% of children under five.

These figures were given during a speech by Maria Andrade of the CIP during a meeting in the northern province of Nampula.

The government predicts that by 2018 more than 157,000 families in six districts in Nampula and Zambézia will be growing and consuming improved varieties of orange-fleshed sweet potatoes. The new varieties provide better nutrition, improved drought resistance, and higher yields.

CIP is partnering with Mozambique’s Agricultural Research Institute (IIAM) to implement the project in the districts of Murrupula, Rapale, Meconta and Monapo (in Nampula Province), and Alto Molocue and Gurue (in Zambézia). The project is funded by the United States Agency for International Development (USAID).

According to Andrade, the project, which will last from 2015 to 2018, will reach

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22,500 households directly with a further 135,000 indirectly benefiting. She stated that: “we will use 15 drought resistant varieties which were released for use in Mozambique in 2011. Most of the OFSP will be consumed domestically. However, 15% of the target group will be supported in larger scale production to enable them to sell the surplus”.

The Nampula Governor, Victor Borges, told the meeting that he believed that the initiative will contribute significantly to the reduction or mitigation of food and nutritional insecurity.

Since the start of the project, 76 producers have sold OFSP to 18,513 households, 62 associations, and seven partners. This has generated MT782,000.

During the same period, 9,255 children under the age of five have benefited from the nutritional programme in Nampula and Zambézia.


END

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