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President Filipe Nyusi to meet with Christine Lagarde in September in a bid to reconcile with new-look IMF team (pages 15-19)

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WEEKLY MEDIA REVIEW No.145: 19 AUGUST TO 26 AUGUST 2016

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Pointers – This week’s edition (Click on a page number to follow the link to the related article)

Macro-Economy:

Africa Confidential questions the political survival of Bank of Mozambique

governor Charles Gove and Finance Minister Adriano Maleiane, as the

stand-off between IMF and G14 Donors and Government continues over “lack

of transparency”, and the Mozambique economy “heads towards bankruptcy”.

Pages 14-15.

President Filipe Nyusi is to visit Christine Lagarde in Washington ahead of a

new International Monetary Fund (IMF) mission that is expected to arrive in

Maputo later in September. Brazilian Ari Aisen succeeds Alex Segura-Ubiergo

as IMF resident representative in Mozambique on 9 September. The IMF and

G14 Donors continue to call for an independent, international audit to be

conducted into the Proindicus ($622m), Ematum ($850m) and MAM ($535m)

sovereign-backed “loans”, which added 20% to the country’s debt and led

Lagarde to publicly accuse the Government of “clearly concealing corruption”.

Pages 15-19.

Former prime minister (2004-10) Luisa Diogo denounces the undisclosed

debts as “not transparent, responsible or serious…The people who contracted

the loans did not take into consideration the consequences that could arise”.

Pages 62-63.

In the absence of an independent audit it is considered unlikely that the IMF

and G14 will resume their funding support. International rating agencies have

been lowering Mozambique’s ratings and warn of failure by government to

satisfy its creditors. Fitch Ratings predicts that total public debt will surpass

100% of GDP during 2016. Pages 14-19.

The Government is hoping to obtain more than US$1-billion in capital gains to

fill the budget hole, with the prospect of ExxonMobil’s entry into the Rovuma

basin LNG play, in the hope that this will lead to resumption of funding from the

IMF and G14. Pages 19-20 and 37-40.

The metical has fallen 45% against the US dollar over the past 12 months,

making it Africa’s worst-performing currency in that period. Mozambique

continues to record a reduction of net international reserves and there is a

severe shortage of US Dollars at the commercial banks that is leading to local

companies finding it difficult to meet their international hard-currency

obligations. Inflation is predicted reach 22.5% by the end of the year. Interest

rate rises are making it difficult for companies to repay loans. Investors are

spooked. Pages 19-23 and 35.

Joseph Hanlon, leading analyst of Mozambican politics and business,

considers China’s investment an integral part of the government’s strategy in

dealing with the debt issue, in exchange for the “selling of state companies and

assets such as [the State’s] share of gas”. Pages 30-34.


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Oil & Gas:

All eyes are on the prospective announcement of a deal between ExxonMobil

and ENI that could be a game-changer for development of Rovuma basin

Area 4 (and government finances). How minority partners like KOGAS and

Galp fit into the picture, still raises some questions. And BP, which was

theoretically supposed to buy all of the 3.4-million tons of liquefied gas

products turned out each year, hasn’t yet formally signed the agreement. Also

the progress of negotiations between ExxonMobil and Anadarko on their co-

operation of joint-development on the Mamba basin (which straddles areas 1

& 4), and on-shore infrastructure is far from clear. Pages 37-40.

Politics & Security

Renamo v Government Pages 63-73: Joseph Hanlon points out that attempts by mediators to push the talks forward has created confusion and discord. There are conflicting statements over what, if anything, the delegations actually agreed in recent talks, and the atmosphere of uncertainty and mistrust appears to have left the government and Renamo more, not less, entrenched in their positions. Facing rigidity on both sides, mediators decide to take a break. A cease-fire has not yet been agreed. For text of proposed cease-fire agreement see pages 69-71.

Meanwhile the conflict continues to intensify. Pages 81-88.

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Return to Contents Page

TABLE OF CONTENTS

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

ECONOMY & BUSINESS ............................................................................................. 13

GRAPH 1: MOZAMBIQUE CURRENCY EVALUATION ....................................... 13

Macro-Economy: ...................................................................................................... 14

Ministry of muddle ...................................................................................................... 14

Mozambique aims to reconcile with new-look IMF team – but key hurdle remains .... 15

Could the IMF back off? ............................................................................................. 18

Is the investigation of hidden debts crucial for a Mozambique-IMF reconciliation? .... 19

“Government working to restore trust with IMF and international partners” – Prime

Minister ...................................................................................................................... 20

Will capital gains tax plug the hole? ........................................................................... 21

Mozambique’s foreign currency reserves fell US$29.2-million in July ........................ 21

Forex shortage raising concern in Mozambique ........................................................ 22

Mozambique’s rating constrained by weak institutions and intensifying external

pressures – Moody's .................................................................................................. 22

Mozambique may delay further rate increases until 2017 – BMI ................................ 23

Interest rate rises making it difficult for companies to repay loans ............................. 24

Maputo council slashes city budget by 37% and stops bus rapid transit .................... 25

Average commodity prices: 17 to 24 August .............................................................. 25

INAE mobilises against price speculation .................................................................. 26

Niassa business people ask government for SEZ ...................................................... 26

African market beckons global builders and sellers ................................................... 27

Mozambique inks investment protection agreement with Singapore ......................... 29

Mozambique and China: a fast friendship into the future ........................................... 30

Africa caught up between Japan and China ............................................................... 34

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

at the top-right hand corner of the page.

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Financial Services:................................................................................................... 35

Banco de Moçambique’s higher interest rates come into force .................................. 35

Mozambican companies may pay their Chinese suppliers directly in renminbi .......... 35

Eduardo Mondlane Junior is the new chairman of Banc ABC .................................... 36

Atlas Mara plans job cuts after first half profit plunge ................................................. 36

Montepio Geral transfers assets in Angola and Mozambique to holding company Arise

................................................................................................................................... 37

Oil and Gas: .............................................................................................................. 37

Exxon, ENI and CNPC in secret Yalta on Block 4 ...................................................... 37

For Mozambique, a much-needed energy windfall .................................................... 39

“Mozambique should promote the use of compressed natural gas” – Autogas .......... 41

Oil M&A is back as industry focus shifts from survival to growth ................................ 41

Sub-Saharan Africa may help soak up global LNG glut, says BMI ............................ 44

Opportune time for Africa oil and gas industry to consider change: PwC oil and gas

review ......................................................................................................................... 44

Mateus Zimba new General Electric Oil and Gas executive in Mozambique ............. 47

Magufuli calls for end to Tanzania LNG delay ............................................................ 47

Mining: ...................................................................................................................... 48

Revenue at Mozambique’s Kenmare drops by US$17.7-million in first half ............... 48

Syrah awards construction contract for Mozambique project ..................................... 49

Premier advancing Mozambique projects .................................................................. 49

Price of raw materials leads to closure of companies in Mozambique ....................... 50

Energy: ...................................................................................................................... 51

EdM to expand electricity network with the help of Nosso Banco .............................. 51

Transport & Construction: ...................................................................................... 51

Mozambique international airport closures still up in the air ....................................... 51

Rail link between Cuamba and Lichinga to resume in November .............................. 52

President Nyusi inaugurates new Beira Port truck terminal ....................................... 53

More than 20 construction sites embargoed in Machava ........................................... 53

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Agriculture & Fishing: ............................................................................................. 53

Portucel writes off €14.5-million from the value of timber plantations in Mozambique 53

Green Resources will produce pulp for paper in Mozambique ................................... 54

Mozambican agro-business attracts Chilean entrepreneurs ...................................... 54

Cooking oils and soaps: raw materials exempt from VAT .......................................... 55

Sena Company produces stevia ................................................................................ 55

Xinavane Sugar transport workers end strike, agree to 5% raise .............................. 56

Land conflict over Costa do Sol’s former Maguiguane Association plots ................... 56

Telecommunications: .............................................................................................. 57

Microsoft working with Mozambique government on IT ............................................. 57

Satellites for Africa: as bandwidth grows, business slows.......................................... 58

Tourism: .................................................................................................................... 59

Volpi eyes a comeback in tourism .............................................................................. 59

Mozambican hospitality sector concerned about military instability ........................... 60

Other: ........................................................................................................................ 60

South Africa plans to promote local companies in Mozambique ................................ 60

RDC anticipates having Choppies as a tenant in Mozambique .................................. 61

Maputo International Advertising Festival postponed ................................................. 62

POLITICS ...................................................................................................................... 62

Luisa Diogo denounces undisclosed debts ................................................................ 62

Mediators cause confusion as war escalates – Joseph Hanlon ................................. 63

Joint Commission meets, but no public statements ................................................... 65

Peace talks proceed in Maputo between obstacles and advances ............................ 66

Cease-fire: mediators claim “some advances” in government-Renamo talks ............ 67

Mozambique peace talks suspended with no cease-fire agreed ................................ 68

Facing rigidity on both sides, mediators take a break ................................................ 68

Text of ceasefire proposal .......................................................................................... 69

“Peace, but not at any price” – President Nyusi ......................................................... 71

Dhlakama intransigent on ruling six provinces ........................................................... 72

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“There is a group which was created to derail independence” – Hama Thai .............. 73

Hunguana warns of ‘liberators’ suppressing dissent .................................................. 74

Indonesian ambassador optimistic about peace in Mozambique ............................... 75

President Nyusi visits Sofala ...................................................................................... 75

President Nyusi calls for co-ordinated actions to face Mozambican crisis ................. 77

Marromeu – widening divisions .................................................................................. 78

President Nyusi joins 35 other heads of state at the TICAD-VI .................................. 79

Quelimane turns 74 amidst water and electricity problems: mayor blames central

government ................................................................................................................ 80

Renamo wants to increase party popularity in the southern region ............................ 80

Peace march in Maputo ............................................................................................. 81

SECURITY .................................................................................................................... 81

New Deputy Chief of Staff for FADM ......................................................................... 81

Interior Minister swears in new Police Commander for Zambézia, pledges to respond

with force to Renamo attacks ..................................................................................... 82

Frelimo secretary accuses opposition provincial assembly members of training

Renamo guerrillas ...................................................................................................... 82

Minister of Defence refuses withdrawal messages: Defence and Security Forces to

remain in position ....................................................................................................... 83

Opposition group raids hospitals ................................................................................ 84

Police prevent Renamo attack in Niassa Province ..................................................... 85

Gunmen attack column in Báruè ................................................................................ 86

Renamo stepping up attacks ...................................................................................... 86

Zimbabwe style land occupation in Maputo ............................................................... 87

CRIME ........................................................................................................................... 89

MAP 1: KIDNAPPING INCIDENTS IN CENTRAL MAPUTO 2014 – 2016 ............. 89

GRAPH 2: PUBLIC-MEDIA REPORTED KIDNAPPINGS PER YEAR ................... 89

GRAPH 3: TIME OF KIDNAPPINGS 2014 - 2016 .................................................. 90

GRAPH 4: KIDNAPPINGS PER GENDER / AGE-GROUP 2014 – 2016 ............... 90

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PRM arrest man for foiled Sommerschield kidnap attempt ........................................ 91

PRM agent arrested for lending uniform to criminals ................................................. 91

PRM officer shot dead in Nampula ............................................................................ 91

PRM officer accused of raping teenager .................................................................... 91

Former FADM officer accused of assault ................................................................... 92

Mob lynches man to death in Beira ............................................................................ 92

Domestic worker beaten to death in Maputo .............................................................. 92

Man lynched in Nacala ............................................................................................... 93

Zimbabwe and Mozambique sign deal on prisoners .................................................. 93

HUMAN RIGHTS, SOCIAL DEVELOPMENT AND NGO’S ......................................... 94

Disaster agency prepared to face coming rainy season............................................. 94

German grant for food aid .......................................................................................... 95

President Nyusi open conference on women and gender .......................................... 96

Joint UN programme aims to empower over one million girls in Mozambique ........... 97

WILDLIFE AND ENVIRONMENTAL PROTECTION .................................................... 98

Conflict and drought threaten Mozambique's Gorongosa park .................................. 98

Illegal logging on the rise in Tete ............................................................................. 100

Involving communities in the fight against wildlife crime .......................................... 100

Are South African rhino calves being exported to Thailand? .................................... 102

HEALTH ...................................................................................................................... 104

Mozambique to open first radiotherapy and nuclear medicine unit in 2017.............. 104

BUSINESS INDEX

ABC Holdings 36

AdM 27, 32, 51

AfricaOnline 59

AMEP 62

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Anadarko 21, 36, 38, 39

Arise 37

Atlas Mara 36, 37

Autogas 41

Banc ABC 36

Banco de Moçambique 14, 16, 22, 24, 25, 35

Banco Terra 37

Banque Populaire du Rwanda 37

Barclays Bank 36

BCI 35

Besmindo Pemba Semesta Lda. 75

BG Group 43, 47

BMI Research 23, 44

BP 3, 38, 39, 43

BRD Commercial Bank 37

Bretton Woods 19

BVH 33

Carrefour 29

CFAO 29

CFM 32, 53

CHEC 33

China Petroleum Pipeline Bureau 33

China Road and Bridge Corporation 33

China Three Gorges 33

Choppies 61

CNPC 37, 38, 39

Coca-Cola 56, 59

Credit Suisse 20, 21, 62

Damodar Ferro Lda. 50

DNO ASA 42

EdM 51, 87

Ematum 16, 17, 18, 20, 40, 63

Energy Mega 75

ENH 31, 38, 39, 75

ENI 21, 37, 38, 39, 40, 42, 43

Enron 47

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Ernst & Young LLP 43

Eutelsat 59

Exim Bank 33

Expo4business 59

ExxonMobil 21, 37, 38, 41, 47

Finibanco Angola 37

Fitch Ratings 30

Florestas de Niassa 54

Galactics 58

Galp 3, 38

General Electric 47

Gondwana International Networks 59

Green Resources 26, 54

Gulf Keystone Petroleum Ltd. 42

Hayiu Mining Company 50

Hotel Avenida 68

Hotel Esterla do Mar 60

IMF 2, 15, 16, 17, 18, 19, 20, 21, 39, 40, 63

Intelsat 58, 59

InterOil Corp 42

JGC 38

Kenmare 48, 49

Kentz Engineers and Contractors 49

KOGAS 3, 38

Mafunyane 102

Malawi Railways 32

MAM 14, 16, 20, 63

Mara Group 36, 37

Microsoft 57, 58

Milhulamente 88

Millennium BIM 35

Mitsui & Co. 28

Montebelo Indy Congress Hotel & Spa 62

Montepio 37

Moody's 22, 23, 59

MultiChoice 58, 59

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Naspers 58

Nippon Steel & Sumitomo Metal 28

Nosso Banco 51

Odebrecht 25

Ophir Energy 47

Orlean Invest Holding 59

Petroleo Brasileiro 42

Portucel 53

Premier African Minerals 49

Profin 39

Proindicus 16, 20, 63

PwC 44, 45, 46

Quantum Power 44

Rabobank 37

RDC Properties Limited 61

SacOil 39

Samsung Heavy Industries 38

Sasol 47

Sena Company 55, 77

SES 59

Shell 43, 47

SNC-Lavalin Group 49

Société Générale Moçambique 35, 36

State Grid 33

Statoil 41, 42, 47, 48

Syrah 49

Technip 38

Teneo Intelligence 21

Total 43

Toyota Tsusho 29

TPD 48

Transnet 33

Twigg Exploration & Mining Limitada 49

Vale 28, 52, 78

Verdemar Ltda 59

Vodacom 59

12


VTB 14, 20, 62

Wood Mackenzie Ltd. 41

World Bank 20, 40

Xinavane Sugar 56

Yamaha Motor 29

13


ECONOMY & BUSINESS

Mozambique Exchange Rate and Fuel Prices: 26 August 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) 79,58 81,18

U.S. Dollar (USD) 70,50 71,92

S.A. Rand (ZAR) 4,96 5,06

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Macro-Economy:

Ministry of muddle

Caught between Frelimo and the exasperation of international donors, the Finance Ministry is a confusing place to be.

New horror stories about public finances are continually emerging from the Finance Ministry as the confusion over who borrowed what and from whom beleaguers civil servants and political appointees. Some see the Ministry as massively incompetent while others say it is simply not in possession of the facts of which it is meant to be in charge. Either way, calls are growing for a set of fresh faces to repair broken relations with the International Monetary Fund (IMF), donors and the public.

Also ripe for replacement is the Governor of the central bank, the Banco de Moçambique, Ernesto Gove. Under his management, the bank excessively manipulated the exchange rate and built its extravagantly luxurious headquarters in Maputo. Gove was seen last week enjoying a lavish holiday on Miami (United States), in photographs published in social media by his children and then relayed to the public. The contrast between such luxury and the penury many suffer at home was stark enough.

Then outrage grew because such a holiday looks highly improbable on the official hard currency withdrawal limit of around US$1,000 a month. So severe is the US dollar shortage that some banks can’t even manage that. Gove’s days are numbered, we hear. President Filipe Nyusi already disliked him strongly, say sources in the governing Frelimo.

Finance Minister Adriano Maleiane is hardly in better odour, his fabled competence appearing less than advertised and his reputed integrity questioned by Mozambicans who accuse him of playing a key role in the continued concealment of the hidden loans. His conduct has damaged relations with the IMF and donors.

Last December, he grudgingly signed a letter to the Fund stating that government guarantees on the secret private loans totalled only US$897-million. However, we can now reveal that he had already met representatives of Russia's VTB bank in Maputo to discuss the hidden loans and had seen the figures.

Africa Confidential has also learned that the state security-linked company, Mozambique Asset Management (MAM), was audited in November 2015. VTB provided clear data for the auditors, including the US$35-million loan arrangement fee which was added to the US$500-million loan. Given the State links and the government-guarantee, one would have expected the Finance Minister to have seen the documents.

Minister Maleiane’s deputy Minister, Maria Isaltina Lucas, seems to be regularly at odds with the Minister as she tries to prevent his toxic reputation rubbing off on her. She, however, was heavily involved in the hidden loans saga while Secretary to the Treasury under the then finance minister, Manuel Chang.

She owes her current position to being seen as one of the few relatively competent officials around. Some suggest she could replace Minister Maleiane. Yet many Frelimo and donor sources oppose the idea because they think she should be

15


on the list of those to be held to account over the debt debacle.

The government is stuck when it comes to replacements. The hunt for a suitable finance minister has even extended to the diaspora but so far, to no avail. That hot seat – and that of central bank governor – is hardly likely to attract successful economists abroad, least of all while the country is heading towards bankruptcy. Conscious of this problem, according to diplomats in Maputo, Frelimo has been hoping that donors would finance a salary attractive enough to tempt the right calibre of new central bank governor – a bizarre aspiration at any time but especially now.

Budget secrets are expensive:

Mozambique’s belated monetary policy adjustments cannot keep up with the metical, which continues to negate much of the benefit of new austerity measures. July’s revised budget assumes an exchange rate of MT52 to the US dollar, which immediately cast doubt over the Finance Ministry’s calculations, which already forecast foreign reserve levels to fall to a dismal US$1.2-billion instead of the US$2.3-billion originally predicted for 2016.

While the budget goes some way to addressing macro-economic imbalances, it made cuts of only 1.1% and even increased spending on the Presidential Guard. Overall, those at the top of the pyramid come out better than those at the bottom. Leading local economists predict negative growth this year.

Another confidence-draining factor is the lack of transparency at a time when restoring confidence is so important. There is an unusually large provision in the budget for unspecified ‘contingency’

spending. Mozambican economists João Mosca and António Francisco have told the local media that their own Ministry sources say that up to 20% of the budget may be allocated to ‘unspecified’ spending.

Calculations based on the government’s fiscal tables indicate that at least 10% of current central government spending is unallocated, a far higher level than the generally accepted 5% ceiling. It has multiplied by around 10, from M1.2-billion to M10.3-billion. The most logical conclusion is that some of this is to cover repayment of the hidden debt.

Donor sources confirm this is the case, as to leave this out of the budget could be interpreted by creditors as a sign of a decision to default. Rather than try to explain this to parliament and win its approval, the government instead opted for its classic position of obfuscation. This tendency to secrecy is precisely, critics say, part of why Mozambique is in its current mess.

Source: Africa Confidential

Mozambique aims to reconcile with new-look IMF team – but key hurdle remains

President Filipe Nyusi will visit Christine Lagarde in Washington, DC next month ahead of a new International Monetary Fund (IMF) mission that is expected to arrive in Maputo later in September. Together with personnel changes in key positions at the Fund, the stage could be set for a thaw in relations – should Mozambique’s government accede to the IMF’s key demand for an independent, international audit of US$2-billion in opaque state-backed borrowing.

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Relations between Mozambique and the IMF were suspended following the April 2016 discovery of US$1.4-billion in hidden government-guaranteed borrowing, on top of the already controversial US$850-million borrowed by state-guaranteed tuna fishing company Ematum.

The IMF froze disbursement of an emergency credit facility after the discovery of US$622-million borrowed by Proindicus, a maritime security company owned by Mozambique’s secret services, and US$535-million borrowed by Mozambique Asset Management (MAM), a ship-building firm established to support Ematum and Proindicus. All three companies are in dire financial straits and unable to repay their loans, while questions remain unanswered over where the US$2-billion ended up.

Western donors followed the IMF’s lead, freezing budget support and in some cases, all aid that went through government agencies. The IMF cancelled a trip to Mozambique in April, visiting in June instead and calling for an independent, international audit to be conducted into the three loans.

The government has so far stood firm against the demand – but nevertheless, another IMF mission will arrive in Maputo on 22 September “to review recent economic developments and continue to advise the authorities on macro-economic policies”, an IMF spokesperson told Zitamar News. The mission will focus on assessing “progress in implementing the 2016 revised budget and the monetary policy measures recently adopted by the Banco de Moçambique.

Changing of the guard at the IMF:

Two of the Fund’s harshest critics of Mozambique are leaving their posts at the end of August. The IMF resident representative in Mozambique, Alex Segura-Ubiergo, has come to the end of his three-year posting and will be replaced by Brazilian Ari Aisen. Aisen starts in Maputo on 9 September after three years in Washington, which came after a three-year stint as the IMF’s representative to Tajikistan.

Segura-Ubiergo’s departure will be an important step in clearing the way for a reconciliation between the IMF and Mozambique. The hidden debts were taken out on Segura-Ubiergo’s watch and Zitamar understands he took the deception personally. He has also taken some criticism for allowing it to take place undetected. Relations between Segura-Ubiergo and senior government members, including Finance Minister Adriano Maleiane, were irreparable damaged in the weeks after the debts were discovered.

Also at the end of August, the head of the IMF’s Africa Department (AFR), Antoinette Sayeh, is retiring. She was the person who, at the Spring Meetings in Washington, announced that Mozambique had hidden debts of US$1.4-billion from the Fund – directly contradicting Minister Maleiane who that morning had publicly claimed the opposite.

Roberto Tibana, a Mozambican economist who has spent his career at international finance institutions and worked with Sayeh while she was Liberian finance minister, told Zitamar that Sayeh was probably a strong influence behind the Fund’s hard-line on Mozambique.

17


Tibana described her as an “integrity rock”, adding that she “hates corruption and takes every opportunity to fight it”.

Sayeh was probably a big influence on Lagarde’s decision to publicly say Mozambique had been “clearly concealing corruption” in May this year, Tibana told Zitamar.

Too soon to make up:

Despite the departure of Sayeh and Segura-Ubiergo, in the absence of an independent audit, President Nyusi is unlikely to be able to talk Mozambique back into the IMF’s good books when he meets Lagarde next month.

On 14 July, IMF spokesperson Gerry Rice told a press conference that the international and independent audit demanded by the IMF in late June is a necessary condition for a Fund review to be completed – which is in turn a precondition of funding support to be resorted. “Our understanding is at this stage the government is not ready to move forward with the audit”, he said. “That’s kind of where we stand”.

Tibana argues that the Africa Department may not even be the one making the decision. “It is my understanding that the Africa Department is under pressure from Strategy and Policy Review (SPR), a very powerful but publicly little-known department in the Fund, not to let go”, he said. “In fact it is my understanding that SPR played a key role in pushing the AFR towards suspending the programme. I guess staff would have wanted to fudge thing as they did when they first found out about Ematum”.

Joanna Kuenssberg, the United Kingdom’s High Commissioner to

Mozambique, confirmed for Zitamar on 18 August that the donor community remains firm on the question of an independent audit. “The UK shares the view of other donors that the government of Mozambique needs to commission an independent international audit of the debts contracted by the three state-owned companies in question”, she told Zitamar.

“It is a necessary step towards restoring the trust that was shattered by the concealment of these huge state-backed debts”, she added.

Tibana agrees that the IMF must stand firm, for the sake of its own credibility. “I cannot see how and why, having publicly staked its reputation by making a clear demand, the IMF can reset [relations] with the government having refused to move an inch towards meeting such a key demand. To me this would further put a dent on [the IMF’s] reputation”, he told Zitamar.

Some of the IMF’s shareholders might even think that the Fund has already been lenient with Mozambique, Tibana argued. “Under normal circumstances, the IMF should have requested Mozambique to return the monies received as a first tranche of the suspended programme. Not doing that was a concession that may have already irritated some shareholders”, he said.

The long road back:

For now, the government is commissioning internal investigation into the deals, including a parliamentary commission, the majority of whose members come from the ruling party, and which has been boycotted by main opposition party Renamo. The Prosecutor General’s office also announced a

18


preliminary finding that the loans were probably illegal – although its next steps remain unclear.

According to Tibana, the Prosecutor General “made things worse by publicly acknowledging the existence of a serious criminal breach of national laws, yet not moving to the logical next step of … a trial. This plays as evidence that national institutions are not in a position to move with the matter to the final consequences”, he said.

For High Commissioner Kuenssberg, the findings of an independent audit “would be useful for the work of the Attorney-General’s office, Parliament and other Mozambican institutions that might look into these matters. The Mozambican public also has many unanswered questions, which the audit could help address”.

The UK is also willing, she said, to consider funding such an exercise – but so far, the government is showing no signs of readiness to launch one.

“We welcome indications from the Mozambican side of greater openness to this requirement”, High Commissioner Kuenssberg said. “We would expect the government and any other relevant institution to co-operate openly with the conduct of such an audit”.

Whether the audit needs to be completed, or merely initiated, for IMF and donor funding to restart may be the focus of debate within the donor community going forward – but having staked their reputations on the key demand, neither party can turn back at this stage.

Source: Zitamar News

Could the IMF back off?

Satisfying the IMF remains key to resolving part of the secret debt crisis. When President Filipe Nyusi goes to the United States from 15 to 20 September and meets the gas companies, he hopes to ensure more than US$1-billion in capital gains to fill the budget hole.

He will also meet IMF head Christine Lagarde in Washington. The next IMF mission will arrive in Mozambique on 22 September. As mentioned in the previous article, “two of the Fund’s harshest critics of Mozambique are leaving their posts at the end of August”.

Resident representative Alex Segura-Ubiergo has finished his three-year term and will be replaced by Brazilian Ari Aisen, while the head of the Africa Department, Antoinette Sayeh, is retiring. Both took the revelation of the secret debts as a personal affront.

President Nyusi will want two things from the IMF – that it does not require a forensic audit of how the money was used (thus protecting his predecessor Armando Guebuza and others in the Frelimo leadership who may have benefited), and that they accept that the capital gains tax can be used to plug the hole.

Loan pushing and other debt background:

The original Ematum bond was only US$$500-million, but so many investment funds wanted to lend Mozambique money in 2013 that the country was encouraged to borrow an extra US$350-million that it did not need. This is a classic example of what is known as “loan pushing”. The global economy is cyclic and there are periods, as now, when there is surplus capital and lenders take on increasingly

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risky lending to developing countries – often encouraging countries to borrow too much, as happened in the 1920s, 1970s and recently.

Joseph Hanlon is the author of the ‘Debt and Development’ chapter of the Oxford University Press textbook Introduction to International Development, and posts on his website the chapter from the second edition. It has a discussion of lending history, illegitimate lending and lender responsibility – which has clearly been violated in this case. It can be downloaded from http://bit.ly/Debt-Dev

Source: Mozambique News Reports and Clippings

Is the investigation of hidden debts crucial for a Mozambique-IMF reconciliation?

Economists are divided on the issue of a reconciliation between the IMF and Mozambique. The fact that the country is a member of the IMF supports the optimism of some, while according to others the absence of a serious investigation could further distance the parties.

President Filipe Nyusi will visit the United States in mid-September, during which time an IMF mission is scheduled to visit Mozambique in the context of the clarification of hidden debts made by state-owned enterprises and backed by State guarantees. The visits are seen as a kind of rapprochement between Maputo and the Bretton Woods institution.

Mozambican economist José Chichava is one of the apologists of this vision. “We must assume that Mozambique is member of the IMF, and as such it would not be wise even for the Fund to not

approach a member when it has problems and help solve the problem”.

Space for dialogue is also valued by another Mozambican economist. Orlando da Conceição welcomes the fact that all channels for clarifying and better managing the hidden debts are being explored.

Government must change attitude:

But Conceição is not so optimistic about the way the Mozambican government is handling the case. According to him, “While the country does not take this with due seriousness, accepting a forensic audit by international experts, and while not taking responsibility for what happened, I do not see great results”.

And Conceição expects more from the government. “It will be a visit, working on a technical level, but there has to be a commitment whereby Mozambican authorities recognise that there was illegal action and take measures”.

The IMF called for an international audit last June, but President Nyusi argued that an investigation must first be conducted internally by the Attorney-General’s Office and the National Assembly, which created a commission, though not an all-party one.

Will the IMF return to the country without the results of the investigation being made known? Conceição says that: “I do not believe the IMF’s attitude will progress beyond this. In order to make further commitments, continue to give their support, this [investigation] is a sine qua non condition.

I have many doubts that the work that the Attorney-General is conducting will have

http://bit.ly/Debt-Dev

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any effect. I will not even talk about parliament, because parliament is truly wasting time. There is minimal respect for the voters. People in parliament are not taking this matter with due seriousness, so I do not see any light at the end of the tunnel”.

Is there a light at the end of the tunnel?

Chichava holds a different view, and is more optimistic. “I think we will find a way. I think the country will get back on track and the International Monetary Fund will resume the relationship that it has always had with Mozambique”, he says.

Meanwhile, the international rating agencies have been lowering Mozambique’s ratings. The confidence of financial agencies is shaken, and they warn of a failure to satisfy creditors.

MAM, one of the companies that benefited from the hidden loans, has already failed to make its first repayment, and the State also had to intervene in the case of Ematum, another company involved in the financial scandal.

Source: Deutsche Welle

“Government working to restore trust with IMF and international partners” – Prime Minister

Speaking to businesspeople in Niassa Province, Prime Minister Carlos Agostinho dos Rosário said that the government is working to restore the trust of the IMF, and of the country’s other international partners, following the crisis sparked off by over US$1-billion worth of government guaranteed loans that had not been disclosed to the IMF, let alone to the Mozambican public.

The loans, from the banks Credit Suisse and VTB of Russia, were contracted by the quasi-public companies Proindicus and MAM in 2013-14, and were guaranteed by the previous government, headed by president Armando Guebuza. The government guarantees for these loans, plus the bond issue of US$850-million for Ematum, which was already in the public domain, added 20% to the country’s foreign debt.

When the Proindicus and MAM loans became public in April this year, the IMF reacted by suspending the second instalment of a loan under the Fund’s Standby Credit Facility (SCF).

The World Bank and the 13 other donors and funding agencies who provide direct support to the Mozambican State Budget suspended all further disbursements.

According to a report in Monday’s issue of Mediafax, Prime Minister Rosário told his audience that an IMF mission “will visit Mozambique in September or October”.

“We have agreed on the steps to be taken to re-establish trust”, he said, “and the indications we have is that everything is in hand to achieve this”. When the IMF mission arrives, it will discuss “the next steps” with the government.

An IMF mission was in Maputo in June, when it insisted that there should be an international audit to ascertain exactly what had happened to all the money lent to Ematum, Proindicus and MAM.

So far there is no sign of such an audit, although the Mozambican Attorney-General’s Office has announced that the three loans are under investigation.

Source: Agencia de Informacao de Moçambique/Notícias Ao Minuto

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Will capital gains tax plug the hole?

Government is hoping that the sale of part of the Cabo Delgado gas fields will be concluded soon and generate more than US$1-billion in capital gains taxes to plug the budget hole caused by cuts in aid and repayments on the secret debt.

It has been widely reported that ENI is selling part of its gas fields to ExxonMobil, the largest publicly traded international oil and gas company; Anadarko also wants to sell part of its field and is talking to ExxonMobil.

Zitamar News recently reported that when ExxonMobil CEO Rex Tillerson met President Filipe Nyusi last month, Tillerson assured the President that capital gains tax would be paid. Last week it was announced that President Nyusi will visit the United States, going to Washington on 15 September, followed by Houston on 16 and 17 September, and then New York for the UN General Assembly opening. In Houston the President will meet with Anadarko CEO Al Walker; ExxonMobil is also based in Houston.

The key question is if Mozambique can get enough money soon to fend off IMF and donor pressure and continue to protect former president Armando Guebuza. Pressure is also coming from the Japanese, a major donor which is normally quiet on these issues.

Ambassador Akira Mizutani told Savana on 12 August, that: “Japan is concerned by these debts which were not disclosed. We hope that Mozambique shows its sincerity in trying to regain credibility with international partners, for example by an international and independent forensic audit”.

The IMF, UK High Commissioner Joanna Kuenssberg and US ambassador Dean Pittman have all called for an independent forensic audit. “We need to have clarity on how the loans were made, what the money was used for and if there’s a possibility to recuperate those funds”, said Ambassador Pittman.

“These were bad decisions, they were made in secret and they will have consequences”.

Meanwhile, the Wall Street Journal recently said that Credit Suisse, which made substantial profits on the secret loans, is now getting worried and the loans “have become an albatross for the bank. The transactions also cast a rare spotlight on the ties between banks, defence contractors and the countries they supply … Privately, Credit Suisse’s top executives have recently expressed concerns about the deals, calling them the wrong type of business for the bank”.

The report quotes Anne Frühauf, head of southern Africa research at political risk consultant Teneo Intelligence, as saying “You’re talking about a country with extreme health and poverty needs … If there had been a proper prioritisation of public-investment needs, neither of these projects would have seen the light of day”.

Source: Mozambique News Reports & Clippings

Mozambique’s foreign currency reserves fell US$29.2-million in July

Mozambique continues to record a reduction of net international reserves (foreign currency reserves), reducing the country’s ability to respond to external shocks and challenging its economic

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relations with foreign countries, especially its ability to pay debts and import goods.

Preliminary information published by the Banco de Moçambique points to a fall of US$29.2-million in July. The bank says that foreign currency reserves fell by US$19.3-million to US$1.9016-billion in the first half of last month alone.

According to the document, the situation reflects net Banco de Moçambique sales of US$9.6-million to commercial banks, US$7.9-million in external debt service and miscellaneous state payments of US$6.7-million.

In the first half of July, the fall in foreign reserves was mitigated by net foreign exchange gains amounting to US$6.8-million, an entry of US$24.1-million to the State and interests from assets abroad worth US$1.3-million.

In the second half of July, external reserves fell by US$9.9-million to a balance of US$1.8405-billion, primarily reflecting the repayment of foreign debt in the amount of US$23.9-million and net sales of US$13.2-million by the Banco de Moçambique to commercial banks.

Net foreign exchange gains of US$9.1-million and foreign direct investment worth US$8.7-million were recorded during the same period.

The decline in international net reserves comes at a time when the economy is struggling with shortages of foreign exchange, which limits the purchase of imports in a context of high dependence on external markets. Mozambique’s external reserves are usually expected to cover about 3.5 months of imports.

Source: Folha de Maputo/O País

Forex shortage raising concern in Mozambique

“To get US$10,000 to import a machine will take me 20 years”, a Mozambican entrepreneur complains.

With commercial banks in Mozambique limiting the amount of foreign currency that customers can withdraw each month, private customers and companies with foreign currency accounts are apprehensive at a time of severe economic and financial crisis.

Due to the decline in export sales, the Mozambican market has been experiencing a shortage of foreign currency recently, leading some banks to impose new monthly limits of US$500, €500 and ZAR1,000 on their clients. As such, entrepreneurs eager to venture into agro-processing are contemplating two decades of daily visits to the bank to raise the required capital.

Economists say that these measures should be complemented by concrete actions to increase production for exports, resulting in more foreign currency entering the country. Mozambique currently has exports worth about US$5-billion annually, up from US$300-million 20 years ago but nevertheless an amount far short of requirements.

Source: VOA Português

Mozambique’s rating constrained by weak institutions and intensifying external pressures – Moody's

Mozambique’s institutional weakness, marked currency depreciation and the fall in its foreign exchange reserves have increased risks for creditors and constrain the government’s Caa3 sovereign rating,

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Moody's Investors Service said in an annual report this week.

The country faces several short-term challenges, including the need to resolve liquidity pressures derived from the debts of state-owned enterprises that have received government guarantees, the restoration of financial support from the international community, and improving its weak public governance and transparency of the public finances.

“Mozambique’s weak institutional apparatus was displayed by the under-reporting of government debt that became apparent earlier this year”, said Lucie Villa, a Moody's vice-president, senior analyst and the report’s co-author. “The government’s willingness to alter the terms of debts that it had guaranteed to postpone payments manifests a low commitment to service debt when pressures are mounting”.

The negative outlook on Mozambique’s rating reflects litigation risks that could result in a prolonged period of disorderly debt distress for the government, with a propagation of default to other classes of debt beyond guarantees.

Moody’s would downgrade Mozambique’s government ratings if government defaults on its direct debt were to appear imminent with a loss likely to surpass 35%.

The rating outlook could be stabilised if litigation risks abate and if liquidity pressures were to ease, potentially helped by the restructuring of debts guaranteed by the government.

Mozambique’s credit profile is supported by the prospect of liquefied natural gas (LNG) exploitation that would have a substantial positive impact on the

government finances, economic growth and the balance of payments.

However, the timing of any benefits stemming from this source is still too uncertain and Moody's has not incorporated LNG in its central projections.

Source: CPI Financial

Mozambique may delay further rate increases until 2017 – BMI

Mozambique’s central bank will probably pause its tightening cycle for the remainder of 2016 and resume increases in the first quarter of next year, according to BMI Research.

During the last meeting, held in July, the Monetary Policy Committee increased its policy rate by 300 basis points to 17.25%, seeking to rein in galloping inflation. Consumer prices rose by 20.7% in July from a year ago, while the metical has fallen 45% against the US dollar over the past 12 months, making it Africa’s worst-performing currency in that period.

“Weak real GDP growth – projected at just 4.1% in 2016 – and the government’s substantially elevated external debt burden will provide sufficient deterrents for any further hikes before 2017”, BMI said, while forecasting inflation would be at 22.5% by the end of the year.

There is scope for further monetary-policy tightening in the first quarter of 2017 to counteract inflationary pressures and negative real interest rates, BMI said. Once economic recovery feeds through to the exchange rate and prices begin to stabilise, the central bank will have room to make several cuts and end 2017 with the benchmark rate at 16%, it said.

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Investors spooked:

The metical has depreciated as foreign investment in crucial industries such as energy and infrastructure slows, with investors spooked by the government’s lack of transparency and lower commodity prices.

In April, the coal-producing southern African nation owned up to the existence of US$1.4-billion of previously undisclosed borrowing, including loans taken out by state-owned companies.

“The central bank will be reluctant to add another headwind to economic activity”, according to BMI. “Furthermore, the government’s enormous external debt burden – estimated at around 80% of gross domestic product (GDP) – will add another deterrent, as increased borrowing costs at home would add even greater pressure to the government’s debt-servicing capacity”.

Source: Bloomberg

Interest rate rises making it difficult for companies to repay loans

Successive rises in interest rates are making it impossible for some Mozambican companies to pay off bank loans, reports Mediafax

In order to fight inflation, the Banco de Moçambique has repeatedly hiked its key interest rates. Since October 2015, the Standing Lending Facility (the interest rate paid by the commercial banks to the central bank for money borrowed on the Interbank Money Market) has risen seven times.

The latest increase was in July, when the Banco de Moçambique increased the rate

by 300 base points, from 14.25% to 17.25%.

Commercial banks have followed the lead from the central bank and have increased their own interest rates, making the cost of loans, especially for small businesses, increasingly prohibitive.

A spokesperson for the Confederation of Economic Associations of Mozambique (Confederação das Associações Económicas de Moçambique, CTA), economist Eduardo Sengo, confirmed to Mediafax that there are indeed companies in this situation, although he did not name them, or say how many businesses find themselves unable to pay off their loans. They have approached the CTA, asking it to intervene with the banks in order to restructure the debts.

But the CTA does not want to be involved in negotiations with the banks. “These are questions of management of each company”, said Sengo. “The company must manage its situation with its bank”.

He said the CTA is urging companies in difficulties to analyse their current financial situation, and draw up a plan which they can present to their banks, in order to reach an understanding that will harm neither the companies nor the banks.

“Certainly they will reach a solution, and this is better than defaulting on their loans to the banks”, he added. But he stressed that, as far as the CTA is concerned, “this is a private matter between the company in debt and its bank”.

“We cannot intervene in the management of each company”, he said.

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However, the CTA has discussed the question of interest rates in general with the banks – notably the complaint that when the Banco de Moçambique increases its reference interest rates, the commercial banks do likewise, but when the central bank's rates fall (as happened earlier in this decade), the commercial banks are reluctant to cut their rates.

“This has been discussed several times”, said Sengo, “because it seems that the commercial banks are much quicker to adjust to rises rather than to falls in interest rates”.

The banks had tried to justify this behaviour, claiming that, in setting their own interest rates, “they don't depend exclusively on the central bank, but have a series of costs which influence the structure of interest rates”.

The CTA found such arguments unconvincing – the banks were effectively saying they had to follow the central bank’s lead when it increased interest rates, but not when it lowered them.

Sengo accused the commercial banks of opportunism – they were saying “we shall share what is bad, but we shall not share what is good”.

Source: Agencia de Informacao de Moçambique

Maputo council slashes city budget by 37% and stops bus rapid transit

The Maputo Municipal Council plans to reduce its 2016 budget by 37% to approximately MT3,973-million (from MT6,306-million) in response to the current economic situation in the country. The revised budget was approved by the municipal assembly on Tuesday 23 August.

The decision aims to adjust general provisions, projects and activities in accordance with the disbursement plan and anticipated income for the remainder of the year.

Meanwhile, the proposed bus rapid transit system will not be built, revealed @Verdade. Work was supposed to start last month, and the system was to have been built by the Brazilian firm Odebrecht with a US$330-million Brazilian export credit.

But such credits require government guarantees, which are not forthcoming after the revelations of more than US$1-billion in secret debt. @Verdade points out that this loan would have been only 15% of the secret debt, and be much more useful.

Bus rapid transit is used in Johannesburg (South Africa) and is common in Latin America. Buses use special lanes and are boarded at high platform stations as on a metro, and provide a very fast service.

They are also cheaper than rail systems because they do not need bridges and pass through ordinary road junctions. The two proposed routes would have run from the baixa to Zimpeto and to Magoanine.

Source: Jornal Notícias/Mozambique News Reports and Clippings/@Verdade

Average commodity prices: 17 to 24 August

During the period 17 to 24 August, average prices for basic food products once again shifted in some shops and markets in the cities of Maputo, Beira and Nampula.

In Maputo, the price of locally produced eggs increased by 9%, while brown sugar

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and locally produced white sugar increased by 6% and 4%, respectively. The price of locally produced cooking oil increased by 5% and imported mackerel (20 cm) increased by 3%, while the price of locally produced corn flour increased by 2%.

In Beira, the price of locally produced frozen chicken increased by 32%, white and brown sugar by 27% and 8%, respectively; locally produced eggs by 5%, and imported rice by 2%. The price of imported cooking oil decreased by 9%.

During the period under review, the price of essential commodities remained relatively stable in Nampula. The price of locally produced reno potatoes fell by 4% and locally produced tomatoes by 2%.

Source: Jornal Notícias

INAE mobilises against price speculation

During the course of the week, agents from the National Economic Activities Inspectorate (INAE) met in Matola to discuss standardised responses to price speculation. INAE officials around the country combat price speculation and the sale of substandard or expired products.

During the INAE meeting, the Permanent Secretary of the Ministry of Industry and Trade, Carla Gulizane, called on participants to find solutions to price speculation at a time when the cost of living is rising.

Meeting chair Virginia Muianga said that one of the main focuses of the event was to enhance compliance with regulations setting out maximum profit margins.

Source: Folha de Maputo

Niassa business people ask government for SEZ

The private sector in Niassa Province has asked the government to establish a Special Economic Zone (SEZ) in the area in order to attract public and private investment and leverage local socio-economic development.

The request was made during the meeting between Prime Minister Carlos Agostinho do Rosário and the provincial business council.

Entrepreneurs believe that the establishment of a SEZ in Niassa would address the province’s concerns about attracting investment for infrastructure projects.

Inocencio Sotomane, chairman of Green Resources, said that the development of Niassa was dependent on access to the market for its agricultural production, whose potential remains dormant mainly due to lack of access roads.

“We need to have strong companies, but this goal is difficult to achieve because despite ongoing reforms the road is still long”, said Sotomane.

Businessman Faizal Lacá noted that Niassa was supplied with all types of manufactured goods from the southern provinces of Mozambique, but that the freight costs of one truckload were between MT280,000 and MT300,000, substantially raising final prices to consumers.

Air transport has ceased being an alternative because, as entrepreneurs told the Prime Minister, passenger and cargo rates charged by the national airline and

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the Aeroportos de Moçambique (AdM) were unaffordable.

The expansion of financial services in Niassa is slow, contributing to the meagre circulation and poor availability of currency, as local people customarily bury money to keep it safe.

Business people at the well-attended meeting also mentioned that the funding which partners made available to micro-, small- and medium-sized enterprises do not appear to reach Niassa Province.

The Prime Minister said that the efforts that the government was pursuing to return peace to the country was a commitment to the development and well-being of the population. “But we are also committed to ensuring road and rail connections with Niassa Province and the process is registering advances”, he said.

He assured his audience that the government is working to complete the rebuilding of the branch railway that connects Lichinga to the northern rail corridor running from the Port of Nacala to Malawi.

Prime Minister Rosário also said that the government would continue to pay the District Development Fund throughout the country, despite low returns. He said the fund, currently standing at MT7-million, was changing people’s lives, but should be reformed.

Prime Minister Rosário finished by saying that his visit to Niassa had allowed him to observe at first hand “the potential that the province has to offer for speedy development”.

Source: Jornal Notícias/Agencia de Informacao de Moçambique/Rádio Moçambique

African market beckons global builders and sellers

Companies around the world are locked in fierce competition to cash in on the increasingly promising African market, as they eye a continent of 1.2-billion people, rich in natural resources, as the last economic frontier.

While some global companies vie to build infrastructure, others are seeking to tap consumer markets amid a sharp expansion of Africa’s middle class. Taken as a whole, Africa’s population is forecast to exceed those of China and India, respectively, by the mid-2020s and top the two-billion mark in 2040.

According to one estimate, the number of African households with annual incomes over US$5,000 will more than double from 57-million in 2000 to 127-million by 2020.

After decades of conflict and periodic famine, and despite ongoing challenges such as infectious disease and terrorism, Africa, once written off as “a lost continent”, is gradually becoming unlost – reducing its reliance on aid and drawing more trade and investment.

Building a presence:

The Tokyo International Conference on African Development, sponsored by the Japanese government, has been held five times. The sixth TICAD, to be held in Nairobi (Kenya), will be the first in Africa. On 27 and 28 August, top government and business leaders from Japan and Africa will discuss issues concerning development.

Japan still lags other countries in terms of direct investment in Africa, according to the government-affiliated Japan External

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Trade Organization. But Mozambique, in southeast Africa, one of the world’s poorest countries, has emerged as a focal point of Japan’s drive to play a bigger role on the continent.

One area of interest is coal for steelmaking. The Mozambican Port of Nacala, 1,500-kilometres north of Maputo, began shipping coking coal to Japan in May. Nippon Steel & Sumitomo Metal imports the coal at its Kimitsu Works in Chiba Prefecture, southeast of Tokyo.

Nippon Steel & Sumitomo Metal currently buys more than half its coking coal from Australia. “Securing new sources of supply is crucial to stability”, according to a senior company official. But there are only a few regions in the world that can produce high-grade coal used for steelmaking. Mozambique is one, and its resources are largely untapped.

The coal is transported by rail to Nacala from the Moatize coal mine, 90-kilometers inland. Brazilian miner Vale and Mitsui & Co., a Japanese trading house, are developing and operating the mine, the

railway and the port in a huge project worth over US$8-billion.

“We have total power as a trading house. We will use it to ensure stable resource supplies to Japan, and to promote the economic development of the sub-Saharan region”, said Motomu Takahashi, Mitsui’s executive vice president. Mitsui sees infrastructure as key to that development.

During his visit to Mozambique in 2014, Japanese Prime Minister Shinzo Abe pledged a total of ¥70-billion (US$701-million) in official development assistance over five years. As part of the aid package, Japan will extend low-interest yen loans for the construction of a new terminal for general goods at the Port of Nacala.

At the fifth TICAD in Yokohama in 2013, the Japanese government named 10 priority areas for wide-area development projects, including the so-called Nacala Corridor, a network centred on the port that spans several countries.

Despite headwinds for the development of resources in the form of low commodity prices, such integrated projects and new infrastructure should help the continent’s economies become more self-sustaining. They will also create new business opportunities.

Others are joining the African infrastructure fray. Like in many others, China is active in Africa as part of its Belt and Road Initiative, an effort to create an economic network linking China with Europe and Africa by land and sea.

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The Northern Corridor transport network project is a high-profile project. It links the Kenyan Port of Mombasa – a gateway to East Africa – to the landlocked countries of Uganda, Rwanda and Burundi.

While Japan is assisting with the development of the port and the creation of a special economic zone with yen loans, China will build a 450-kilometre rail line between Mombasa and Nairobi.

Expanding middle:

Many global companies are hungry for a piece of Africa’s growing middle-class consumer market. In December 2015, a big shopping mall anchored by a Carrefour supermarket opened in Abidjan, the commercial capital of Ivory Coast. The Abidjan store is French retailer’s first foray in the region. It plans to open outlets in eight neighbouring countries as well.

The mall is operated jointly by Carrefour and CFAO, a French trading company acquired by Japanese trading house Toyota Tsusho in 2012. “Africa has a huge potential because of its population. The swelling middle class provides us with business opportunities”, said Takashi Hattori, senior managing director with Toyota Tsusho.

Japan’s Yamaha Motor, together with Toyota Tsusho, is assembling 110cc motorcycles in Kenya, targeting owners of the motorbike taxis widely used in the country. To hold prices down, Yamaha Motor imports parts and materials from a plant in India. To capitalise on the African consumer market, global companies must develop products that meet local needs, sell them at suitable prices and establish sales channels.

Source: Nikkei Asian Review

Mozambique inks investment protection agreement with Singapore

On Wednesday 24 August, the Minister of Industry and Trade, Ernesto Tonela, and his Singaporean counterpart, Minister Lim Hng Kian, signed an agreement for the promotion, facilitation and reciprocal protection of investments, an instrument that will boost economic co-operation between the two countries.

The Ministry of Industry and Trade press release revealed that Minister Tonela was in Singapore for the Ministerial Forum on Experience Exchange between the island nation and 10 sub-Saharan African countries, held under the banner ‘Singapore and Africa: Partnership for Sustainable Development’.

The forum’s opening session was addressed by the Singaporean Minister of Foreign Affairs, Vivian Balakrishnan, who stressed the importance of partnerships between countries in the implementation of the Sustainable Development Goals adopted by the United Nations in 2015, and acknowledged that: “there are no universal models that serve to all countries, hence the urgent need to exchange ideas and experiences on ways to achieve sustainable development”.

Wednesday’s programme also included a business forum with South Africa, Botswana, Cabo Verde, Ivory Coast, Ethiopia, Ghana, Mauritius, Mozambique, Tanzania, Uganda and Zimbabwe and Singapore represented.

During the event, participants had the opportunity to visit and interact with various Singaporean institutions and organisations, including the Academy of Civil Aviation, the Central College of Technical and Professional Education, the

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Dam and Water Treatment Centre and the Urban Planning Centre.

Source: Agencia de Informacao de Moçambique/The Straits Times

Mozambique and China: a fast friendship into the future

From the pristine, vast beaches of the Quirimbas Islands in the north to the colonial-style café esplanades in the capital, Maputo is a place of sun and leisure not exactly known for being a fast-paced destination.

But in a time when heated discourse over the country’s recent economic downturn rises above the coffee-shop din, many events are quickly unfolding for a nation previously considered the paragon of economic development on the African continent. And no change can rival that of Mozambique’s evolving relationship with China.

The discussions invariably centre around US$2.3-billion. This is the total off-budget debt that the current government of Mozambique is being forced to reckon with by its western partners, which includes credit granted by western banks to public security sector companies designated by the preceding government.

In restructuring this debt at a time when the metical is weakening, total public debt should surpass 100% of GDP by 2016, according to estimations by Fitch Ratings. Indeed, debt restructuring of some sort seems inevitable in the near-to-medium term.

In addition to a shift in mood, recent events may have stirred up Maputo. The visit of Portuguese President Marcelo Rebelo de Sousa’s brought tidings of bad news. As Portugal currently chairs the

G14 group of countries and institutions that finance the Mozambican State Budget, he had the very unpleasant task of announcing, standing side by side with his Mozambican counterpart, President Filipe Nyusi, that the roughly US$300-million the group dispenses annually to the Mozambican budget was being suspended until the debt crisis is sorted.

That very day, another much more celebratory press conference took place elsewhere in the capital. Sun Jian, the Chinese ambassador to Mozambique, met with Mozambique’s Deputy Minister for Foreign Affairs and Cooperation, Nyeleti Mondlane, to convey China’s intentions of providing US$16-million in much needed infrastructure, including 200 water wells, 80 public buses, and construction of a cultural centre in Maputo. This partnership could not have been timelier.

“We want to increase aid to Mozambique as a way to help the country overcome this tough time”, said Ambassador Jian, adding that: “this country has been an example of one of the better-performing economies in the region”. This extension of aid posed a stark contrast highlighting the different approaches by Beijing versus Washington or Brussels.

Eleven days later, President Nyusi flew to Beijing for a high-level official state visit that analysts were quick to interpret as a dash to negotiate financial assistance. The Mozambican authorities dismissed this presumption, claiming that the visit had been under preparation for months. Regardless, what is certain is that Beijing gave President Nyusi a grand reception to further boost bilateral ties and prove to Maputo that assistance lies not only to the west of Mozambique but to the east as well.

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Mozambique becomes China’s first true partner in Africa:

President Nyusi may have landed in Beijing under pressure, but during his five-day visit (16-21 May), Chinese authorities certainly spared no expense or gesture of good faith to reassure him of their support. After conferring with the highest level of government – including President Xi Jinping, Prime Minister Li Keqiang, and prominent local businessmen – the President returned to Maputo with a Global Strategic Partnership Cooperation and Agreement in his briefcase.

For China, this is the first agreement of its kind with an African nation. Only Cambodia, Laos, Burma, Thailand and Vietnam have signed similar agreements with Beijing. The document sets out 14 principles by which to govern bilateral relations, with the aim to strengthen co-operation between the army, police and intelligence services of the two countries and to strengthen Mozambique’s national defence capacity, particularly with regards to training, arms supply, equipment and technology.

Additionally, a co-operation agreement was signed during the state visit providing relocation of certain Chinese industries to Mozambique to accommodate China’s ongoing restructuring of its own economy. Also promising is framework agreement advocating energy co-operation between the National Hydrocarbon Company of Mozambique (ENH) and China.

As the African country is set to become one of the world’s top natural gas producers in the coming decade, Chinese companies have taken a foothold in the industry’s development.

President Nyusi was accompanied by a delegation of six members of the Mozambican government including Minister of Foreign Affairs and Cooperation Oldemiro Balói, Minister of Industry and Commerce Ernesto Tonela, Minister of Public Works, Housing and Water Resources Carlos Martinho, and Minister of Culture and Tourism Silva Dunduru.

In summarising the accomplishments at the end of his state visit, President Nyusi made certain to stress that the visit was scheduled prior to the G14’s decision to suspend financial assistance to Mozambique. “We did not come here to ask for help to pay our debts”, which he did acknowledge, “is a problem”.

Given Mozambique’s short-term financing needs, analysts continue to focus on what the visit may yield, for instance, in terms of credit lines. Joseph Hanlon, leading analyst of Mozambican politics and business, considers China’s investment an integral part of the government’s strategy in dealing with the debt issue.

The Mozambican government expects Chinese investment to rush in in exchange for the “selling of state companies and assets such as [the State’s] share of gas”, asserts Hanlon.

“This would need to cover a significant part of the US$2.3-billion debt. If that were done, [the government] hopes that – as always in the past – donors and lenders have so much invested in the Mozambique success story that they will not let Mozambique collapse”.

Only a few weeks after President Nyusi returned from Beijing, the Mozambican government announced a move that could lead to partially privatising the country’s

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airport enterprise, AdM. Additionally, the Council of Ministers (Cabinet) decided that the national railway company Portos e Caminhos de Ferro de Moçambique (CFM) would sell all its shares in the concession companies running the Port of Nacala, Malawi Railways, and the railway from Nacala to the Moatize coal mines. This is expected to raise around US$150-million.

A government source informed Macao Magazine that despite the “very strong decision” by Beijing to strengthen political relations with Maputo, the preferred assistance route pursued by Chinese authorities over the last few months remains economical and financial, that is, strengthening the presence of Chinese companies and providing technological and unspecified financial support.

Loro Horta, a diplomat and leading analyst of China-Mozambique relations, underlines that the visit’s timing was no “coincidence”, though he is cautious about its results. “I think China will give some support to Mozambique; at least it will be more receptive than the West”. But, he adds, given the current internal and global slowdown Beijing is experiencing, it “has become more selective and careful in foreign aid”, taking a less risk-prone approach to global relations.

“China, though also affected by the [financial] crisis, is still a strong investor abroad, buying large companies in the outside world. Faced with a global economic crisis and the reluctance of Western countries to accept certain political models, many African countries are again turning to China”, Horta informs Macao Magazine. For example, Angola was an early proponent of this strategy with President José Eduardo dos Santos’ visit to Beijing in 2015.

A flurry of activities after the Beijing visit:

Immediately following President Nyusi’s visit to China, a delegation of 70 Chinese businessmen from Shandong Province arrived in Mozambique. During the Mozambique-China Business Forum held in Maputo, Deputy Governor of Shandong Province, Sun Wei, who led the mission, said that the trip’s aim was to “implement the business agreements signed” in Beijing.

The vice-president of the CTA, Rogério Samo Gudo, said the Chinese mission intended to “materialise the agreements from business and economic points of view”, highlighting areas such as energy, construction, infrastructure, services, hospitality and tourism.

Another indication of the expeditious relationship between the two countries manifested with President Nyusi’s June appointment of former prime minister Aires Ali to the post of ambassador to China. As head of government between 2010 and 2012, Ali is a respected political heavyweight, having previously been minister of education as well as governor twice, first in Niassa Province, and then in Inhambane Province. His political cache is perfectly suited to that of an ambassador to a global power and Mozambique’s global strategic partner.

In Beijing, Ambassador Ali will have a heavy workload. He must first follow up with all the agreements signed in May. Addressing financial issues will also be on his list of priorities. Following a 160% increase in funding to the country since 2012, China is now Mozambique’s foremost bilateral creditor.

Then there is the critical issue of investment. The recent economic

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downturn, particularly the metical’s depreciation, has been compounded by the downturn in the natural resources sector which was, for many years, one of the country’s strongest sources of growth. Luckily, Chinese companies are now coming forward with billions of US dollars in infrastructure investment.

In such dire economic times, Chinese investment projects are ever more beacons of inspiration and progress. Recently, Zimpeto Stadium, the first major sports infrastructure built in post-independence Mozambique, was funded by China. Now, attention is focused on the Maputo-Catembe Bridge project: once completed in 2017, it will be the longest suspension bridge in Africa, constructed to the tune of US$300-million.

Construction has also begun on the new Port at Beira, Mozambique’s second largest city. China Harbour Engineering Co. (CHEC) is leading the project for the new port, an infrastructure key to revitalising the country’s fishery industry. An overhaul of the entire production chain is in the works, including refrigeration and exporting processed products.

Another flagship infrastructure project spearheaded by Chinese co-operation is the Maputo Ring Road, built by China Road and Bridge Corporation who is also in charge of the Maputo-Catembe Bridge project. Exim Bank also recently financed the completion of the new terminal at Maputo International Airport in 2012.

An international consortium including CHEC is also planning a US$1-billion investment in a new port serving Mozambique and its neighbouring countries, including South Africa. The Techobanine deepwater port project in Matutuíne district (Maputo Province), is

being promoted by another consortium led by Mozambican company Bela Vista Holdings, SA (BVH) that includes, again, CHEC as well as South African public railways company Transnet, according to weekly newspaper Savana.

New energy opens up a new chapter:

In mid-2015, a new US$400-million Chinese credit was announced for the construction of an electricity transmission line between the provinces of Zambézia and Nampula. The interest of major Chinese state-owned enterprises, such as China Three Gorges and State Grid, have been widely referenced in these major Mozambican hydroelectric projects.

Development of the gas sector and related infrastructure is actually expected to take in the biggest investments in the coming years. Mozambique’s vast natural gas resources comprise the country’s most abundant source of wealth and are expected to provide the nation with a new, more prosperous stage in its history. Here too, major Chinese enterprises are gaining a foothold.

This past March, a US$6-billion investment was announced for construction of a 2,600-kilometre pipeline. The China Petroleum Pipeline Bureau, part of the China National Petroleum Corp Group, and a shareholder in the Rovuma off-shore Area-4, is in charge of the feasibility study. Once the investment decision is finalised, 70% of the funding is expected to come from Chinese financial institutions.

This financing will be crucial, considering how much the debt crisis has impacted the country’s access to international financing. At a time when many large western banks and companies are giving

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Mozambique the cold shoulder, China is encouraging its companies to invest heavily, creating conditions for future development.

According to an analysis by Africa Monitor Intelligence, more important than financial aid, Mozambican authorities endeavoured to bring back “moral support” from Beijing.

President Nyusi’s welcome in the Great Hall of the People was certainly an alternative to the reception and support from the West. It was also an international platform upon which Mozambique could save face and retain its respectability, which has often been undermined in recent statements made by foreign partners.

The agreements signed indicate that, at least to the East, there is no shortage of confidence in the country’s future. And confidence, more than capital, is what Mozambique needs most.

Source: MacauHub/Macao Magazine/Paulo Figueiredo

Africa caught up between Japan and China

This weekend Japan holds the TICAD VI in Nairobi (Kenya). Technically, this means, Africa hosts TICAD for the first time since its inception in 1993. But why so, and why now? One theory is that it was Africa’s initiative.

This may be true but is not any more adequate as an explanation than the claim, for instance, that the Forum on China-Africa Cooperation (FOCAC) was a purely African initiative.

He who pays the piper, as they say, always calls the tune. In a sense, we can also say, FOCAC inspired TICAD to come

to Africa just like TICAD inspired FOCAC to come into being in 2000.

FOCAC VI was held in Johannesburg (South Africa) in December 2015. What does TICAD IV mean in the wider context of Sino-Japanese diplomacy in Africa? Apart from Japan’s longstanding interest in providing a high-level forum for consultations about African development, one can sense at least four schools of thought about why TICAD came to Africa in August 2016.

First, it is a continuation of Japan’s strategy to contain China’s expanding influence in Africa and elsewhere, a strategy that seemingly began in earnest around January 2014 when Japan’s Prime Minister Shinzo Abe visited Ethiopia, Ivory Coast and Mozambique.

The second school sees Japan’s aim in Africa as engaging China by trying to make it clear that China’s behaviour in Asia could affect its interests in Africa. China’s interest in Africa is indeed expanding.

The third school views Japan’s ambition in Africa as more limited in nature, focusing mainly on gaining access to Africa’s resources. Then there is the fourth school that considers Japan’s interests in Africa as more specifically diplomatic, aimed at garnering Africa’s support in its quest for permanent membership of a reformed UN Security Council as well as its other global ventures.

In reality, of course, the four schools can overlap occasionally. In any case, one does not have to subscribe to the “containment” school in order to maintain, first, that it was the growing power of China in Africa (and elsewhere) and the insecurity it triggered in Japan that

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conditioned the timing of TICAD VI in Africa in August 2016. With more than US$200-billion, China-Africa trade hit all-time high in 2014, and that was more than seven times the value of Japan’s trade with Africa in the same period.

While Africa’s imports from China grew from 2% in 1995 to 13% in 2012, Africa’s imports from Japan fell from around 7% in 1995 to 3% in the same period. In 2014, 13.5% of Africa’s trade was with China. The comparative figure for Japan was only 1%.

China has also bolstered its growing economic presence in Africa with a potentially formidable soft power by mobilising its cultural resources and opening multiple channels of public diplomacy with governments and peoples of Africa.

The Yomiuri Shimbun, Japan’s largest daily newspaper, for instance thus sounded the alarm in 2013: “…Japan must be cautious about China’s moves on the African continent, where it is stepping up its presence. We cannot ignore China’s policy towards Africa, which is noticeably aimed at monopolising natural resources there while focusing only on China’s interest”.

And yet a broad consensus has been emerging that Japan had to make a move without much delay. A Japanese government official reportedly said that: “If you wait until the security situation fully improves across Africa … there will be no market left for you”. Now that China and Japan are ready to compete not only for raw materials and markets but also for respect and love in Africa, what is the proper African response?

Source: Standard Digital

Financial Services:

Banco de Moçambique’s higher interest rates come into force

The highest benchmark interest rates in the last 12 months came into effect this week at the instigation of the Banco de Moçambique, and will apply to all bank loans contracted or requested from 22 August. To date, the minimum interest rate (prime) for loans at the Millennium BIM was 22.25%, and 23% at BCI. From April to June, it had risen from 19.07% to 19.20%.

From September 2015 to this month, the central bank has increased the benchmark interest rate seven times, the last increase having been the biggest, of 300 basis points, which came into force this week. The Banco de Moçambique’s increase in interest rates is intended to curb inflation and stabilise the exchange rate of the metical against the main foreign currencies used in the country.

But some Mozambican economists, such as Roberto Tibana, have warned that this measure will not solve the problem and suggest cutting what they consider “rampant” state expenditure instead.

Source: O País

Mozambican companies may pay their Chinese suppliers directly in renminbi

Mozambican companies can start paying their Chinese suppliers through their banks in China following the introduction of a new CNH clearing service launched by the Société Générale Moçambique.

The CNH, or offshore yuan, is the international code for China’s currency (CNY) that can be traded outside the country, mainly in Hong Kong, which

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tends to be worth slightly more than the currency in circulation in China as its value changes based on demand, whilst the domestic value of the currency is based on national exchange rate policy.

Launched in August, the new service makes it possible to make payments “quickly and safely at a low cost” and to carry out transactions all over the world, with the support of the bank’s headquarters, in Paris.

The statement also said that the service had been created due to growth of trade between Mozambique and China and based on statements from China’s President, Xi Jinping, when in December 2015 at the China-Africa Summit in Johannesburg he announced financing for Africa of US$60-billion.

Société Générale Moçambique also said it had recently hired a Chinese business manager who would focus exclusively on management of customers in China, as well helping them develop their business in Mozambique.

Source: MacauHub

Eduardo Mondlane Junior is the new chairman of Banc ABC

Eduardo Mondlane Junior is the new Chairman of the Board (PCA) of the Banc ABC in Mozambique. Mondlane replaces Benjamin Alfredo, who held the position for over a decade.

Among other positions in institutions and multinational companies, Eduardo Chivambo Mondlane Junior has in his professional career worked as non-executive director for the Atlas Mara Group the majority shareholder of ABC Holdings. He has also worked as a non-

executive director at Barclays Bank and a senior strategic advisor to the Anadarko oil company in Houston, USA, among others.

Source: O País

Atlas Mara plans job cuts after first half profit plunge

Atlas Mara, an investment vehicle partly owned by former Barclays chief executive, Bob Diamond, which has been acquiring banks in sub-Saharan Africa, plans to cut down on employees by about 35% after it suffered a 71% plunge in half profit.

The London Stock Exchange listed financier’s posted a US$1.2-million profit in the first six months of this year, compared to the US$4.1-million it made in the same period last year.

Planned job cuts could save the company US$8-million in operating costs annually, starting 2017, according to a statement posted on the The London Stock Exchange website.

Currency depreciation in Nigeria (which is the bank’s biggest market), and other countries in Africa, coupled with the fall in oil prices in the West African nation and copper in Zambia were major contributors to the dip in profits, the statement said.

Nigeria’s economy entered into a recession in June, further shooting down prospects of financial recovery and sending banks fortunes lower.

The half-year profit dip comes just months after the bank incurred a US$6.7-million loss in the first quarter, Wall Street Journal reported.

Atlas Mara Ltd. operates in seven countries across Africa: Tanzania,

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Rwanda, Botswana, Mozambique, Zimbabwe, Nigeria and South Africa.

It was founded by Diamond and Ashish Thakkar, a Ugandan-born Dubai-based entrepreneur who owns Mara Group.

Atlas Mara Ltd. is also focused on reducing non-performing loans and impairments as part of boosting its returns in the Southern Africa markets of Zambia, Mozambique, Zimbabwe and Botswana, according to the bank.

The bank expects improved results in the second half of the year due to the measures it has put in place despite weaker currencies and the expected costs of integration, Bloomberg reported.

The Rwandan economy which relies on agriculture, services and industry performed well in the first quarter and holds better future prospects for the bank.

Atlas Mara owns a 62.06% majority share in the combined entity of Banque Populaire du Rwanda and BRD Commercial Bank.

The sub-Saharan bank is also in talks to buy Barclays Africa Group’s operations, which announced its decision to exit the continental market by selling its 62.3% shares in February, this year.

Source: AFK Insider

Montepio Geral transfers assets in Angola and Mozambique to holding company Arise

Montepio, a Portuguese mutual bank, will join Arise – a company established by banks supporting the Norfund development fund of Norway and FMO of the Netherlands and by the Rabobank banking co-operative.

Arise is a holding company (SGPS) that brings together the holdings of each institution in the African market, which according to a source from Montepio will be established this year to launch operations on 1 January 2017.

Montepio will transfer its shares in Finibanco Angola and Banco Terra in Mozambique, in which it holds 51% and 44.537% of the share capital.

Participants in Arise currently hold stakes in financial institutions and financial service providers in sub-Saharan Africa and the holding company will start operating with a presence in 20 countries and assets of US$660-million.

A recently released statement said the aim of founding Arise is to build sound and stable financial institutions geared to the retail market, small and medium enterprises, the rural sector and customers that have not had access to financial services.

Source: MacauHub

Oil and Gas:

Exxon, ENI and CNPC in secret Yalta on Block 4

Over the past few months a flurry of top-level meetings in Maputo and Beijing handed out roles between ExxonMobil, ENI and CNPC in developing the highly prolific Block 4. The one remaining question concerns funding the giant project and it still hangs in the balance.

What part for ExxonMobil? The visit was to have been discreet, but the arrival of Exxon CEO, Rex Tillerson, in Maputo in late July caught everyone’s attention due to the large number of bullet-proof cars travelling through the city en-route to the

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President’s residence. Tillerson was able to consult in private with President Filipe Nyusi as well as a third rather special person, the CEO of ENI, Claudio Descalzi. On the agenda was ExxonMobil’s exact role in Block 4 – where the FLNG (to be built by Technip, Samsung Heavy Industries and JGC) will be deployed.

Exxon – which won’t be releasing any information for several weeks – is expected to acquire 50% of ENI East Africa (EAA) that is currently 71% controlled by ENI and owns 70% of the precious block.

If confirmed, the acquisition will give Exxon 35% of the project. Another point that was discussed at the gathering concerned the unitised zone between Block 1 – operated by Anadarko – and Block 4, on which the giant reserves of Mamba and Prosperidade are situated.

Anadarko and ENI have agreed to jointly develop the reserves but it appears some details remain to be pinned down. Anadarko’s Vice-President for LNG, Mitch Ingram, was able to squeeze in a meeting with Mozambique’s President just after the conclave with the Italian and American oilmen on 19 July.

In buying into EAA, ExxonMobil isn’t expected to become operator of the Coral FLNG project but could take that position later on the Mamba and Prosperidade fields. These two reserves are to supply trains 3 and 4 of the future LNG terminal at Afungi.

Also a part of the Exxon and ENI programme is the Chinese major CNPC, which has owned 21% of the license – through its 30% holding in EAA – since 2013. According to our sources, the ENI

and Exxon chiefs flew directly from Mozambique to Beijing to confer with their counterpart at CNPC, Wang Yilin. The aim of the visit was to reach an agreement on the parts each company will play in developing Block 4’s gas.

How KOGAS and Galp fit into the picture, as far as Exxon is concerned vis-à-vis the development of the FLNG programme still raises some questions. Firstly, BP – which was theoretically supposed to buy all of the 3.4-million tons of liquefied gas products turned out each year – hasn’t yet formally signed the agreement. Another issue is that the two other partners of ENI and CNPC, namely South Korea’s KOGAS and Galp of Portugal, haven’t yet approved the development plan.

ENI has given them a deadline of 31 October to make up their minds. Through EAA, ENI could decide to buy out the stakes of the two companies, or 20% in all. But if it did, the estimated price tag of US$4-billion (based on the price CNPC paid in 2013 for 21% of the block, at US$4.3-billion) would need financial backing from ExxonMobil.

How can ENH pay? The last question concerns the 10% owned on Block 4 by the national oil company ENH. While exploration costs on the block are being carried by the private partners, ENH will have to put up cash for its 10% share in development expenditure. Mozambique is currently in hock to the tune of over 100% of its GDP. As a result, the cash calls on ENH will probably need to be met by ENI. Early on in talks, the Italians wanted to apply a 13% interest rate on loans but ENH’s boss, Omar Mithá, had that reduced to 9%.

Source: Africa Intelligence

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For Mozambique, a much-needed energy windfall

Earlier this month, Italy’s ENI finally completed talks to sell part of its stake in Mozambique’s LNG fields to Exxon, even though industry sources say the deal won’t be formally announced for several months.

Ever since ENI and some of its industry rivals (like the American Anadarko Petroleum) discovered rich natural gas deposits off the East African nation’s shores in 2010, the promise of energy wealth has helped buoy hopes of further economic progress in one of Africa’s poorest nations.

In that light, the ENI-Exxon agreement represents an important milestone in what could prove to be a game-changing enterprise for Mozambique.

Of course, locals in Mozambique are hardly the only interested party. Between them, ENI and Anadarko have already discovered 160-trillion cubic feet (tcf) of LNG in the Indian Ocean’s Rovuma Basin. By buying its own stake in these rich reserves, Exxon joins China’s CNPC, BP and other oil majors that have invested in Mozambique’s energy resources.

Across the table from them sits ENH, Mozambique’s own national oil company, with its 15% stake in the Anadarko consortium and 10% stake in the ENI project. ENH is also part of the consortium planning to build a pipeline to carry Mozambique’s as-of-yet untapped natural gas to energy-hungry South Africa, alongside the South African firm SacOil, the Dutch Profin, and China’s Petroleum Pipeline Bureau.

However, standing in the way of Mozambique leveraging these assets are a whirlwind of debt, market, and social pressures that have conspired to keep the country from fully moving past its civil war. Even though the long running conflict ended in 1992, tensions between the warring sides of that era continue to run deep.

Outside groups like the IMF have pointed to renewed fighting between government forces and Renamo – or what they refer to as “political tension” – as the greatest threat to what has otherwise been one of Africa’s fastest-growing economies.

With a poverty rate that stands at 54% and over 10-million rural poor (out of a total population of approximately 26.5-million), Mozambique urgently needs the wealth its natural gas can provide. Without its own capital to finance the extensive infrastructure required, Mozambique is also dependent on outsiders like ENI and Exxon to tap into Rovuma Basin resources on its behalf.

Among Mozambique’s greatest challenges is the delay in delivering its extensive offshore LNG resources to a global market that has seen energy prices fall dramatically. Even though its offshore resources rival those of Nigeria and Algeria, and industry estimates suggest there is enough LNG now under ENI’s control to meet United States-scale demand for two whole decades, low prices for natural gas and rapidly expanding production in North America has helped delay exploitation.

Mozambique’s LNG future in context:

Mozambique also faces mounting debt hurdles, with more than US$1.35-billion in controversial loans it is struggling to repay

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and the IMF suspending aid payments after revelations the State concealed that borrowing. Much of the country’s underlying debt can be traced to the civil war that dragged on for nearly 20 years, in the shadow of the Cold War and outside machinations. Nearly a million people died during the civil war, with another five-million displaced before the conflict finally ended in 1992.

Mozambique, already among the poorest and least developed nations on earth, emerged from the war years saddled with billions more in debt. It was the first African nation to receive debt relief from the IMF and the World Bank under the Heavily Indebted Poor Country Initiative, making the precariousness of its current financial state all the more troubling. Debt service continues to steal dollars away from any other social and economic advances.

In that context, the ENI-Exxon announcement could not come at a better time. Developing the LNG reserves holds out the promise of much-needed tax revenues, financing, and investment into the struggling economy.

However, given the government’s inability to finance expensive projects on its own, the need for infrastructure investment can’t be overstated: the proposed 2,600-kilometre pipeline from Mozambique to South Africa, for one, would cost US$6-billion, with most of that money coming from Chinese banks.

With foreign entities needing to put so much capital forward in order to take advantage of Mozambique’s offshore resources, maritime security is also going to be a major question.

The political conflict on land is an issue in and of itself, but Mozambique’s East African neighbourhood has a notorious legacy of piracy and West African energy producers (notably Nigeria) are all too familiar with seaborne bandits seizing tankers and taking hostages in poorly-patrolled waters.

Using some of the funds that have since gotten it into hot water with the IMF and international creditors, Mozambique responded to rampant illegal fishing by predominately Chinese vessels in its waters by purchasing a small fleet of patrol boats purchased for Ematum.

Where the country had precious little capacity to police its own coastline just a few years ago, those vessels could be key to protecting the valuable (and vulnerable) infrastructure ENI and its partners will be building in Mozambican waters. In this, Mozambique will again need help in demonstrating to partners that its trade routes, industry facilities, and infrastructure are secure.

The United States has provided assistance in the past, while France, India and notably South Africa have all co-operated with Mozambique to help safeguard sovereignty over its waters – Indian Prime Minister Narenda Modi made a point on his recent visit to East Africa to stress a greater role for India in maritime security in their shared Indian Ocean.

With so much at stake, and with market competition pressures arising from Tanzania and other global players, the ENI-Exxon deal may be a spark that gets Mozambique back on track with its energy production plans and the sorely needed promise they hold.

Source: Diplomatic Courier

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“Mozambique should promote the use of compressed natural gas” – Autogas

The Executive Director of Autogas, João das Neves, maintains that natural gas can be part of the solution to the economic and financial crisis that the country is currently facing.

Das Neves suggested recently that natural gas may also provide for access to a cheaper fuel as well as reduce financial charges on fuel imports.

“What the country is facing is a major economic and financial challenge. However, Autogas prefers not to be part of the problem but the solution. The vehicular natural gas offers a huge competitive tool for small- and medium-sized Mozambican companies”, he said.

The depreciation of the metical poses a huge challenge to the State to keep the liquid fuel at an affordable price for small- and medium-sized companies, as well as for communities.

“If, instead of focusing only on the import of liquid fuels, we had already started the effective promotion of the use of compressed natural gas maybe we would not be in the tight situation we are in now”, said das Neves.

According to the official, with the effective promotion of compressed natural gas, hundreds of thousands of US dollars could be saved, because a portion of transport systems would use natural gas instead of liquid fuels.

Currently six natural gas stations serve the city of Maputo and Matola, with more projected in the near future. “At this time, the company is facing internal structure issues in a bid to ensure that its

expansion projects improve viability and not descend the company in financial crisis”, he said.

According to das Neves, the completion of the pipeline connection at two stations in Matola is underway.

Currently, the country has 1,800 vehicles fuelled by gas. However, the overall potential is estimated at about 80,000 cars in the next 10 years, depending on the project implementation conditions.

Source: A Bola

Oil M&A is back as industry focus shifts from survival to growth

Multibillion-dollar oil and gas deals are back on the table.

More than US$11-billion of transactions were announced globally in July as crude’s recovery fuelled hopes of a steadier market, Wood Mackenzie Ltd. said.

That’s the highest monthly total this year and brings the amount since May to US$32-billion, triple that of the previous three months. Deal making will continue to accelerate as oil prices stabilise, according to the consulting firm.

ExxonMobil Corp. and Statoil ASA were among the buyers after crude’s rebound from a 12-year low earlier this year bolstered confidence.

Acquisitions will allow the companies to ensure future growth as the industry has slashed US$1-trillion in spending to protect their balance sheets during the downturn.

“The extreme oil price volatility in the first quarter caused a lot of uncertainty”, said

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Greig Aitken, principal analyst for mergers and acquisitions at Wood Mackenzie.

“Activity picked up as confidence returned and companies started looking towards future growth instead of focusing entirely on survival”.

Exxon, the world’s largest oil producer by market value, agreed last month to acquire natural-gas explorer InterOil Corp. for as much as US$3.6-billion to add discoveries in Papua New Guinea.

The company also is in advanced negotiations with ENI SpA to buy a stake in gas finds off Mozambique, people with knowledge of the talks said in July.

Statoil, Norway’s biggest oil producer, agreed last month to purchase an oil block off Brazil from Petroleo Brasileiro SA for US$2.5-billion, its biggest acquisition since 2011.

The deals follow a period of relative quiet as buyers and sellers failed to agree on valuations amid oil’s decline.

North America, home to many higher-cost shale drillers, saw the fewest transactions last year since 2004, according to data compiled by Bloomberg.

Benchmark Brent crude averaged US$35.21 a barrel in the first quarter of 2016, the lowest in more than a decade.

“Buyers and sellers were so far apart in terms of price expectations”, said Bijan Mossavar-Rahmani, executive chairman of oil producer DNO ASA, which made a US$300-million bid for Gulf Keystone Petroleum Ltd. in July.

“A lot of the sellers still were hopeful that US$100 oil or at least US$80 oil was around the corner, and it hasn’t happened”.

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Shell-BG:

Those companies that did make acquisitions had little cash to draw on. Royal Dutch Shell Plc’s debt ballooned when it bought BG Group Plc, a rare mega-deal of the past two years, valued at more than US$70-billion in April 2015.

The transaction was announced just weeks before crude prices resumed their slide, prompting some analysts and shareholders to suggest Shell was paying too much.

Such anxiety may ease with Brent crude now trading around US$50 a barrel, and acquisitions could pick up as buyers and sellers have more similar price expectations, according to Bloomberg Intelligence.

While crude has recovered, “there seems to be an increasing consensus that oil will not go back to over US$100 any time soon”, said Philipp Chladek, a senior industry analyst for BI in London.

“So the differing perceptions about the asset values that, next to the volatility, was the main deal-breaker in the past, are gradually converging”.

There’ll be plenty of assets up for grabs. Shell intends to raise US$30-billion through divestitures in the three years to 2018, while BP Plc plans as much as US$5-billion of disposals this year.

Total SA and ENI also are putting assets on the block.

The market for oilfield acquisitions has “stabilised in the last three months and the consensus around commodity prices and where prices are going has narrowed”, said Jon Clark, a transaction adviser at Ernst & Young LLP.

“There seems to now be a shift back into M&A-type activity and we’re starting to see potential divestments coming out of the majors”.

Source: Bloomberg

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Sub-Saharan Africa may help soak up global LNG glut, says BMI

Sub-Saharan Africa holds the highest potential to become a “niche” market for LNG to feed power plants as the world faces a growing surplus of the fuel, according to BMI Research.

Ivory Coast, Ghana and South Africa are the most likely destinations for LNG in the region, the analysts wrote in a note dated Thursday 18 August.

As most countries have limited domestic consumption and infrastructure, integrated LNG-to-power projects will be an anchor for wider demand creation, BMI said.

“In the face of reduced offtake from traditional buyers” in northeast Asia, sub-Saharan Africa holds potential as a new market, BMI said. “Government support through pricing and offtake agreements is crucial for long-term gas import growth”.

South Africa’s Department of Trade and Industry created a gas industrialisation unit in May, which will initially focus on importing LNG as part of a gas-to-power program to add 3,126 megawatts (MW) of capacity between 2019 and 2025.

Ghana earlier this year signed a deal with Quantum Power for construction and operation of LNG storage and regasification facilities.

Ivory Coast and Ghana have “the most prospective markets for integrated LNG-to-power projects” with plans already in place and room for further growth within BMI’s 10-year forecast period.

Source: Bloomberg

Opportune time for Africa oil and gas industry to consider change: PwC oil and gas review

The decline in the global oil price has led to a reduced level of activity across the African continent and had an impact on countries that traditionally depend on oil and gas revenue. Despite the bleak landscape, the African continent still offers significant opportunities in the oil and gas sector.

“It is an opportune time for local governments that want to attract oil and gas investors to reform their regulatory, fiscal and licensing systems”, says Chris Bredenhann, PricewaterhouseCoopers (PwC) Africa Oil & Gas Advisory Leader.

Bredenhann says it is also important for the industry to look beyond the challenges caused by depressed prices and consider other forces that are shaping the industry. PwC’s ‘Africa oil & Gas Review, 2016’ suggests that with the ongoing focus on cost reduction in the industry, the demand for innovation in technology will grow.

Furthermore, this can be the ideal time for the industry to consider introducing training programmes to upskill levels and company standards in order to give local players a chance to enter the sector when activity picks up again.

PwC’s ‘Africa oil & gas review, 2016’ analyses what has happened in the last 12 months in the oil and gas industry within the major and emerging African markets.

As at the end of 2015, Africa has a proven natural gas base of 496.7 tcf, down marginally from 2014, with 90% of the continent’s natural gas production still

45


coming from Nigeria, Libya, Algeria and Egypt.

Dealing with the decline:

The top challenges identified by organisations in the oil and gas industry have remained unchanged to those in previous years – uncertainty in regulatory frameworks, corruption/ethics, poor physical infrastructure and a lack of skill resources.

This year, there was also a significant rise in the challenge of meeting taxation requirements, as well as government relations. Regulatory uncertainty has remained the top challenge facing oil and gas businesses in Africa for the third year in a row, with 70% of organisations citing it as one of the five biggest issues they experience.

For the first time since PwC’s series of annual reviews began in 2010, ‘government relations’ has hit the top six challenges. Around the continent, many organisations have experienced difficulty obtaining government sanction for new projects.

This is proving to be extremely difficult in new hydrocarbon provinces, such as Mozambique, because governments do not fully comprehend the intricacies and scale of oil and gas projects. As a result, organisations are beginning to ally themselves with government in order to ensure that they are a strategic and supportive partner.

Organisations identified the price of oil and natural gas as the most significant factor that would affect their companies’ businesses over the next three years, with respondents expecting the price to reach US$52 by the end of 2016, US$60 by the

end of 2017, and US$69 by the end of 2018. With little control over the price, businesses have focused on improving efficiency and driving down costs.

Regulatory compliance, at number two, remains a significant challenge for organisations this year. Foreign currency volatility is also rated a likely factor (number three) to impact business over the next three years. This year there have been large currency fluctuations – with the fallout from the Brexit vote precipitating some of the largest so far.

Asset management and optimisation remains a key strategic focus area for companies. “Fortunately, the industry remains optimistic, and many upstream players are focusing on exploration and finding new resources over the next three years, most likely in anticipation for an upturn in the oil price”, adds Bredenhann.

Financing and investing:

Although there has been some recovery in the pricing environment, investor confidence remains low as a significant recovery does not seem to be on the horizon, and oil market fundamentals are still down. The low oil price has led operators to defer final investment decisions (FIDs) on over US$300-billion of projects. Globally, mergers and acquisitions (M&A) activity has also dipped and it is expected that this trend will trend continue.

Sustainability:

Under the current economic climate, oil and gas companies are looking to invest in a number of key areas in order to boost growth over the next three to five years. Improved efficiencies ranked highest, followed by local content and skills

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development, and infrastructure improvements. “The oil and gas industry is faced with a higher entry barrier because technology and jobs tend to be more complex, highly specialised and costly”, explains Bredenhann.

The sustainability of the industry will also be affected by a number of drivers. These include the price of oil, impact of renewable and alternative energy sources, emergence of new competitors, environmental consequences of the industry, legislative frameworks and government takes.

Basic as well as technological infrastructure is essential for the oil and gas industry to thrive. Twenty percent of organisations think that inadequacy of basic infrastructure will have a significant impact on their business over the next three years – with 73% expecting it to have an unchanged impact or no impact.

Similarly, 20% of respondents expect technology to have a significant impact on their business over the next three years, but only 3.43% rated technology infrastructure as a top strategic focus area over the same period.

It is positive to note that over half of respondents expect acreage and license costs to either decrease or decrease substantially. Adds Bredenhann: “This is likely due to the decreased oil price, ultimately devaluing acreage/licences”.

Regulatory framework:

An uncertain regulatory framework is one of the main issues that organisations in the oil and gas industry are grappling with. In South Africa, there have been commitments to address concerns since 2015, and the intention of government to

separate regulations for oil and gas from the mining industry was communicated. However, the Minerals and Petroleum Resources Development Act (MPRDA) has not yet been changed and approved to reflect such modifications.

In Tanzania, the regulatory environment remains uncertain despite the promulgation of the Petroleum Act in 2015. Furthermore, in Nigeria, the government has failed to pass the Petroleum Industry Bill into law.

The digital oilfield:

The digital revolution and technological breakthroughs are disrupting businesses. PwC’s global research shows that oil and gas companies are slower than other industries to respond to using new technologies, particularly digital. We believe that there are a number of trends that will ultimately transform the oil and gas industry.

These include: the Internet of things, building alliances, simplification and standardisation, solution-based buying, and knowledge transfer from international oil companies to oilfield services companies.

“The complexities and challenges facing Africa’s oil and gas industry have become daunting. As uncertain regulatory frameworks, taxation requirements and corruption continue to rank at the top of industry’s challenges in Africa, it also high time that governments make significant changes”.

“Furthermore, players must look at the current state of the industry as an opportunity to reinvent themselves. Given the state of the industry, we think that stakeholders must also consider making

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changes to their business models. Change is the way to survive in the ‘new energy future’. We need to see new business models, new products, new energy sources and new strategies to meet the new reality”, concludes Bredenhann.

Source: Naija24 News

Mateus Zimba new General Electric Oil and Gas executive in Mozambique

On 15 August Mateus Zimba took office as Regional Executive functions of General Electric Oil and Gas in Mozambique, covering southern and eastern Africa. Zimba will have a key role in formulating and leading the implementation of GE Oil and Gas strategy in eastern and southern Africa.

Prior to joining GE, Zimba held various positions at Sasol between 2000 and 2016, most recently as resident director. Prior to this position, he held strategic positions in Sasol with responsibility for management and corporate affairs. He also worked at Enron as an independent consultant in the implementation of the iron and steel casting project.

“I am very happy to be joining this prestigious organisation and taking on the challenge of an important role in the executive leadership team of GE Oil and Gas in Mozambique. I pledge my full commitment to the success of GE’s operations in the country. Mozambique has enormous potentialities and a promising future in terms of economic and social growth”, Zimba said.

Zimba’s appointment reaffirms GE’s commitment to the modernisation of development projects in Mozambique, bringing its cutting-edge technology and

innovation as well as technical knowledge and training to provide long-term benefits for Mozambique.

GE plans to expand its operations in all key sectors for national development. It has successfully installed 14 wellheads and equipment in offshore Area-4 and always works with local partners to develop technologies and broader solutions.

As part of its commitment and skills development, GE has signed Memoranda of Understanding (MoU) with three institutions. The first, with Eduardo Mondlane University, awards scholarships worth US$250,000, as well as sponsoring curriculum development and improvement, teacher training and the development of projects of mutual interest.

The second MoU, with the National Petroleum Institute, presents local courses offered by the GE Oil & Gas University based in Florence, Italy. The third was signed with the National Employment and Professional Training Institute and supports curriculum development and improvement, seminars and teacher training.

The three MoU have resulted in the hiring of 20 engineers in practical training capacities.

Source: General Electric

Magufuli calls for end to Tanzania LNG delay

BG Group, recently acquired by Royal Dutch Shell, alongside Statoil, ExxonMobil and Ophir Energy, plan to build a US$30-billion onshore LNG export terminal in partnership with the state-run Tanzania

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Petroleum Development (TPD) by the early 2020s.

But a final investment decision (FID) has been held up by government delays in finalising issues relating to acquisition of land at the site and establishing a legal framework for the nascent hydrocarbon industry.

“I want to see this plant being built, we are taking too long. Sort out all the remaining issues so investors can start construction work immediately”, President John Magufuli is quoted as saying.

President Magufuli, a reformist who took office in November, has dismissed several senior officials for corruption and cut all spending that he deemed wasteful, such as curbing foreign travel by public officials.

According to his office, President Magufuli issued the instructions for the LNG project to be fast-tracked during talks with Oystein Michelsen, Statoil’s Tanzania country manager, and senior Tanzanian government energy officials.

The Tanzanian presidency did not give the construction schedule for the project, but said once completed the LNG plant would have an expected economic lifespan of more than 40 years.

The government said it has acquired over 2,000-hectares of land for the construction of the planned two-train LNG terminal at Likong’o village in the southern Tanzanian town of Lindi.

Tanzania discovered an additional 2.17 tcf feet of possible natural gas deposits in February, raising the east African nation’s total estimated recoverable natural gas reserves to more than 57 tcf.

East Africa is a new hotspot in hydrocarbon exploration after substantial deposits of crude oil were found in Uganda and major gas reserves discovered in Tanzania and Mozambique.

Source: Upstream

Mining:

Revenue at Mozambique’s Kenmare drops by US$17.7-million in first half

During the first six months of 2016, revenue at mining company Kenmare fell by US$17.7-million to US$56.2-million, when compared with the same period last year.

The firm said this drop was as a result of lower average prices due to pricing and subsequent contracts being at the bottom of the cycle late in 2015, as well as a reduced value sales mix during the period.

Half-year earnings after day-to-day expenses (EBITDA) was negative US$10.7-million, US$0.1-million more than for the first six months of last year.

This led to an operating loss for Kenmare between January and June of US$24.9-million, however this has improved from a US$27.2-million loss for the same period in 2015.

The H1 results also show ilmenite production increased by 24% to 402,900-tons compared with H1 2015, while zircon production during the period was 20% higher at 28,500-tons.

There was also a new half-year record, with total shipments of finished products in the first six months increasing by 7% to 441,700-tons.

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Kenmare said the ilmenite market has shown signs of recovery in recent months with prices increasing.

Kenmare Resources, a global producer of titanium minerals and zircon, operates the Moma Titanium Minerals mine in northern Mozambique.

The firm’s Managing Director, Michael Carvill, said Kenmare “has made significant progress in reducing unit operating costs by 22% during the period, through cost savings and increased production.

“Further reductions are expected in the second half of the year as higher production is generated from increased grade levels, volumes of ore mined, recoveries and operating time.

“Prices received for our products in H1 2016 are a reflection of the weak market conditions experienced at the end of 2015, when prices for the majority of H1 2016 shipments were struck”.

Carvill added that: “The conclusion of the capital restructuring has provided the company with a robust balance sheet, reduced interest payments and enhanced liquidity and will position the business to take advantage of what we believe will be a sustained recovery in the market”.

Source: RTE News

Syrah awards construction contract for Mozambique project

Engineering and construction company Kentz Engineers and Contractors has won the structural, mechanical and piping construction contract at Australian firm Syrah Resources’ Balama graphite project, in Mozambique.

Kentz, which is a member of the SNC-Lavalin Group, has successfully operated in Mozambique for 18 years and has worked on, among others, the Moma mineral sands mine, the Mozal aluminium smelter and Moatize coal mine.

According to SNC-Lavalin, the contract is valued at C$21.7-million.

The award is with the Mozambican subsidiary of Syrah Resources; Twigg Exploration & Mining Limitada. The Balama project involves the development of a greenfield graphite mine, of which the processing plant will have a production rate of over 350,000-tons per annum and a mine life of over 40 years. The graphite concentrate will be transported to the Port of Nacala for export to international markets.

"We are delighted with this contract award on the Balama Graphite Project in Mozambique, a country we have successfully operated in for 18 years”, said Martin Adler, president of oil and gas at SNC-Lavalin. “We look forward to the safe and successful execution of the project and a long and fruitful relationship with Syrah Resources”.

The Balama project is expected to produce its first ore in the second quarter of next year.

Source: Montreal Gazette/Creamer Media’s Mining Weekly

Premier advancing Mozambique projects

Aim-listed Premier African Minerals has extended the optimisation at its RHA tungsten project, in Mozambique, as the original six-mm screen did not pass material in excess of four-mm on average,

50


necessitating the replacement of the panels with larger 10-mm panels.

These are expected to be installed before the end of August.

Ore from underground operations fed through the plant has returned a head grade greater than four-kilograms/t and a recovery of up to 70% of the contained metal.

The company is targeting an 8,000 t/m throughput at a grade of six-kilograms/t and the recovery of 80% of contained wolframite.

The completion of a new resource statement for RHA is also nearing completion, after which final decisions will be made regarding the re-establishment of openpit operations and the further development of the X-ray transmission upgrade.

Meanwhile, surface exploration at the company’s Zulu lithium and tantalum project, also in Mozambique, has brought the project to a drill ready state.

Final site preparations and negotiations with a drilling contractor are under way.

On 19 August, Premier entered into a subscription agreement for 140 loan notes valued at about £3.5-million.

Proceeds will be used for general working capital purposes and to support the exploration and development activities at the Zulu project.

“This loan instrument removes any short-term funding issues the company may have faced, as RHA is fully optimised, and ensures the rapid development of the exploration activities at the Zulu exploration tenements.

“In that regard, drilling is expected to start in September and with in-house resource management and laboratory facilities at RHA, we expect a rapid and efficient turnaround from these exploration activities”, Chief Executive Officer George Roach said. Source: Mining Weekly

Price of raw materials leads to closure of companies in Mozambique

Three mining companies have closed in Nampula Province due to the economic and financial crisis facing the country and the drop in the price of minerals on the international market, said the provincial director of the sector.

Olavo Daniasse, provincial director of Mineral Resources and Energy of Nampula, said a fourth mining company will reduce activity from September, with all of them arguing that production costs continue to grow and sales are not offsetting that.

One of the mining companies which has closed is Indian-owned Damodar Ferro Lda., and there are others struggling, including China’s Hayiu Mining Company, which despite being in a difficult situation has not yet announced the dismissal of workers, according to the Mozambican press.

Further south, in Zambézia Province, the economic and financial crisis and political and military tension led to the closure of 88 companies and the consequent dismissal of 319 workers.

Eugénio Selemane, of the Organization of Mozambican Workers Secretariat, told reporters that the sectors most affected by the redundancies are construction, industry, trade, bakery and transport, mainly in the districts of Quelimane,

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Mocuba, Milange Gurué and Alto Molócuè, regions that have some economic activity.

In the neighbouring province of Tete workers have been dismissed in much larger number, about 4,000, but for reasons linked to the fall in the price of coal, the main product exported to international markets.

Source: MacauHub

Energy:

EdM to expand electricity network with the help of Nosso Banco

Electricidade de Moçambique (EdM) will benefit from financial support under a co-operation agreement signed with Nosso Banco. The funds will be used to expand the electricity network and other services offered to customers.

The agreement, signed on Monday 22 August in Maputo, has been designed to generate mutual benefits for the two institutions.

The representative of Nosso Banco, Claudino Gaspar, said that his company aims to provide quality services to EdM in the context of ensuring that the financial market becomes highly competitive. The bank will also re provide support for the organisation and restructuring of EdM’s debt.

“We intend to facilitate the various projects that EdM has over the next two years. These include the improvement and expansion of the electricity network to areas that are not covered by their services”, said Gaspar.

Among the projects to be financed by Nosso Banco is the Caia power

transmission project in Sofala Province. In the provinces of Nampula, Cabo Delgado, Niassa and Zambézia, the funds will be utilised to strengthen the overall supply capacity.

EdM also plans to build a powerhouse in Temane (Inhambane Province), which will benefit the region as well as enhance the supply of energy to the city and province of Maputo via the implementation of a transmission line.

EdM’s goal is to connect 100,000 people to the supply grid every year by 2030.


Transport & Construction:

Mozambique international airport

closures still up in the air

No decision has yet been taken in which

of Mozambique’s seven international

airports will be closed to international

flights, the head of Mozambique’s civil

aviation authority told Zitamar News on

Friday 26 August. He confirmed that

international flights were still running to

Vilankulo, a popular tourist destination in

southern Mozambique, despite recent

reports to the contrary.

In September 2015, AdM Chairman,

Emanuel Chaves said that in future, only

three airports in the country would be

allowed to receive international flights:

Maputo in the south, Beira in central

Mozambique, and Nacala in the north.

“[However] There’s been no decision

taken on this, either at the official level or

at the level of the government and the civil

authority”, João de Abreu, the chairman of

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Instituto de Aviação Civil de Moçambique

(IACM), told Zitamar by phone.

“We are still looking at the proposal that

was formulated by AdM”, he said, adding

that it is a complex question that will take

time to evaluate.

“It is not a matter that can be dealt with

simply, as we need to involve all the

partners who could suffer from a probable

closure of certain entry points into the

country”, he said – highlighting the

aviation and tourism industries as among

those that could be affected. There is so

far no deadline for the evaluation to be

concluded, he told Zitamar.

Reports in Notícias in July suggested that

the government had already stopped

international flights to the airports at the

coastal resort town of Vilankulo, the point

of departure for Mozambique’s famous

Bazaruto Archipelago.

However, the Director of Vilankulo airport,

David Augusto Banze, told Zitamar on

Friday that the airport continues to receive

international flights. “We have always

received and will continue to receive

international flights”, he said.

Banze said the proposal to reduce the

number of international airports was “only

on paper, with no date set for its

implementation”.

If its implemented, it will be done

gradually, he said – confirming that the

current plan involved continuing

international flights to the airports of

Maputo, Beira and Nacala.

“We’re still waiting”, said Banze. “Until we

have instruction to close to international

traffic, we will continue operating”.

Mozambique’s other international airports

currently include Tete and Pemba, hubs

for the mining and gas industries,

respectively; Inhambane, another popular

tourist destination; and Nampula, the

biggest city in northern Mozambique.

Source: Zitamar News

Rail link between Cuamba and Lichinga to resume in November

The rail connection between the cities of Cuamba and Lichinga (Niassa Province) will resume operations in November after six years of interruptions due to the degradation of the line.

The Manager of the rehabilitation project, Carlos Mucave, told Prime Minister Carlos Agostinho do Rosário that approximately US$100-million has been invested in the initiative, which included the reconstruction of roughly 240-kilometres of railway.

The work, carried out by a Portuguese company and partially paid for by Vale Moçambique (US$48-million), will be completed in October, according to the project manager, following which the line will have capacity to transport one-million tons of cargo per year.

The contract included construction work of new bridges, removal of landmines, mitigating the effects of erosion and removal of the bushes that had grown over the track in the six years it was out of commission.

Source: A Bola/MacauHub

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President Nyusi inaugurates new Beira Port truck terminal

On Tuesday 23 August, President Filipe Nyusi officially inaugurated the new truck terminal at Beira Port. (Click here to follow link to related article).

The terminal, built at the entrance of the port in Munhava-Matope, is a public-private project budgeted at MT225-million. With capacity for 127 cargo trucks, it is designed to reduce traffic congestion and improve road safety.

Various customs services are available on site, putting an end to previous procedure, whereby drivers obliged to visit multiple locations to deal with cargoes.

Executive Director of CFM, Cândido Jone, who explained the operation of the terminal to the President, said that, since it came into operation, road accidents in the port area were much less frequent and there was less congestion.

“Since this has come into operation, there is greater flexibility all round. Trucks no longer remain in the port area for hours, and road safety has improved a lot. Before, we had a lot of difficulty evacuating the area after accidents, but not anymore”, Jone said.

Source: Diário de Moçambique

More than 20 construction sites embargoed in Machava

The Matola Municipal Council has embargoed approximately 22 construction projects in the municipal district of Machava because they failed to satisfy legal requirements.

According to Domingo, Matola Councillor, Joaquim Mundlovo, said that the

embargoed construction sites comprise of housing, small industry and retail buildings, and have been sanctioned because they fail to observe a minimum distance of 15-metres from the edge of Avenida Josina Machel, which connects the village of Machava to Moamba district headquarters in Maputo Province.

“Some of the buildings were in the final stages, most located along Avenida Josina Machel and the Maputo Ring Road”, he added.

In addition to being illegally sited, some of the buildings lack construction licenses and title of land use (DUAT) certification.

Source: Folha de Maputo/Domingo

Agriculture & Fishing:

Portucel writes off €14.5-million from the value of timber plantations in Mozambique

Portucel wrote off €14.5-million from the value of its timber plantations in Mozambique, because “the political and economic situation in the country is unstable, which presents additional challenges, in terms of the safety of everyone involved and also the security of supplies of products, materials and services needed for the project.

Pressure on the metical has resulted in inflation, a problem which became serious in 2015 and continues to increase”.

A major Portucel plantation is being developed in Báruè (Manica Province), where there have been repeated attacks attributed to armed Renamo men.


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Green Resources will produce pulp for paper in Mozambique

Norwegian company Green Resources will start producing pulp in Mozambique from 2018 in order to feed the paper industry, Arlito Cuco, a company official, told Notícias.

Green Resources, along with Florestas de Niassa, explores 24,000-hectares in the districts of Chimbonila, Majune, Muembe, Lago and Sanga, in the northern province of Niassa.

The company will also produce poles for power transmission lines and telecommunications, reducing the costs of imports.

It already has a factory in the city of Lichinga running on an experimental basis for processing the poles.

Industrial production of pinewood and eucalyptus poles is due to start in 2017 and, according to the Green Resources business plan, the domestic market will be a priority to replace imports that are currently brought in from South Africa, Zimbabwe and Swaziland.

The company currently employs 860 workers in various tasks and, according to Cuco, the number of staff is expected to increase to about 1,500 people when it starts processing the wood for furniture and posts.

Green Resources is one of the largest forestry companies in Africa, with 41,000-hectares of forest in Mozambique, Tanzania and Uganda and operating the largest sawmill in Tanzania and charcoal production units in all three countries.

Source: MacauHub

Mozambican agro-business attracts Chilean entrepreneurs

On Wednesday 24 August, Chilean entrepreneurs expressed their interest in investing in Mozambique, given the country’s potential in several areas – particularly in agro-business.

The Director of ProChile to Africa, Hernán Gutiérrez, said that his country looks to Mozambique as a gateway to the countries of sub-Saharan Africa.

“Therefore, we intend to establish partnerships with entrepreneurs who have a good network in these markets”, said Gutiérrez.

Gutiérrez was speaking in Maputo at a business forum where a Chilean trade mission had the opportunity to share their experiences with Mozambican businesspeople with interests in sectors related to wine production, agribusiness and maritime activities.

According to Gutiérrez, the Chilean trade mission to Mozambique follows a visit by the President of Chile, Michelle Bachelet, in August 2014 in the context of strengthening the existing relations of friendship, solidarity and co-operation between the two countries.

In turn, the Deputy Executive Director of the CTA, Eduardo Sengo, highlighted the relevance of the mission’s visit, taking into account the potential that the country has.

According to Sengo, Mozambique can benefit from Chile’s experience to boost the agro-business sector, as well as other sectors that are likely to add value to domestic products.

“Our country has arable land and a favourable climate for production, and

55


Chile can share their experience through partnerships with our entrepreneurs and producers”, said Sengo, who also referred to the growth of the consumer market in terms of big cities.

“The consumer market is growing rapidly in urban areas and the answer to that pressure is the provision of goods. This can only be overcome by increasing the production and productivity”, he said.


Cooking oils and soaps: raw materials exempt from VAT

According to a government decision, imports of raw materials for the cooking oil and soap industries will continue to be exempt from customs duties and VAT.

The measure aims to encourage the growth of these sectors, which are considered strategic to boost the processing of agricultural products.

A source from the General Directorate of Customs explained that the measure will run until 31 December.

The source added that, to benefit from these exemptions via the Single electronic Window (SeW), companies should adhere to the customs procedure for import of raw materials for manufacturing.

Since 2012, companies in this sector (which includes cooking oils, soaps and sugar), have benefited from exemptions from payment of customs duties and VAT; however, incentives under the VAT Code ceased as of 31 December 2015.

The source assured the media that discussions are currently underway with the aim of extending the incentives under a new code, which is currently under

preparation. According to the source, based on the current rate of talks, the new VAT Code may be ready before the end of the year.

In Mozambique, agriculture contributes roughly 30% to the GDP.

To support the development of this vital sector, the government has approved a number of tax incentives.


Sena Company produces stevia

The Sena Company, which runs one of the largest sugar plantations in Mozambique, at Marromeu, on the south bank of the Zambezi, is introducing the cultivation of stevia, a sweetener and sugar substitute extracted from the leaves of the plant Stevia Rabaudiana, which is native to Brazil and Paraguay.

During his visit to Marromeu district on Tuesday 23 August, President Filipe Nyusi visited the stevia project, and Sena Company officials briefed him on its advantages.

The Sena Company is diversifying the crops it produces, increasing its sources of income, producing raw materials for the food and medical industries, and creating further job opportunities.

Officials showed President Nyusi around the nursery where the mother plants are grown, before the stevia is later transferred to the production fields.

This year the Sena Company has six-hectares reserved for stevia production, but the area could be increased to 50-hectares.

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The company hopes to obtain four stevia harvests a year. Twenty-four workers are currently employed on the project.

Company managers told President Nyusi that they hope to obtain eight-tons of dry stevia leaves. After initial processing, the leaves will be exported to China for transformation into the final sweetener (claimed to be 300 times as sweet as sugar).

The main consumer of stevia is Japan, which uses it to sweeten foods and soft drinks, including locally manufactured Coca-Cola.

It has been used increasingly in the United States and other western countries in recent years, marketed under a variety of brand names.


Xinavane Sugar transport workers end strike, agree to 5% raise

A strike at the Xinavane Sugar company, in Maputo Province, came to an end on Thursday 18 August when the company and the workforce signed an agreement following intervention by the sugar workers’ union and by the Provincial Labour Mediation and Arbitration centre.

According to a press release from the Mozambican Labour Ministry, the strike, in pursuit of a demand for a 26% wage increase, broke out on Monday 15 August and involved 120 workers from the cane transport sector.

After lengthy negotiations the company agreed to increase the wages of this group of workers by just 5%. Their monthly wage packet will thus rise from MT11,074.5 to MT11,628.22.

In addition, the company agreed to pay all its 459 workers (most of them casual) an extra 3% “sugar campaign allowance” every month.

The workers and the company management also agreed to strengthen mechanisms for “permanent dialogue”.

The Ministry claimed that the mediation and arbitration service, established in 2009 to find extra-judicial solutions to labour disputes, has proved its value by reducing the number of strikes or other forms of instability in the labour market.


Land conflict over Costa do Sol’s former Maguiguane Association plots

Conflicts relating to the sale of land, illegal construction and demolition of private property are emerging over land that once belonged to the Maguiguane Association of Agricultural Producers.

Folha de Maputo maintains that the strife is being generated by known individuals driven by selfish interests, contrary to law and public morality.

A press release from Maputo City Council revealed that these individuals sold plots to an unnamed company but couldn’t deliver them to the buyers given the illegality of the transactions and the illegitimacy of the vendors.

The municipality embargoed the transfer, and the purchasing company sued in court and had the vendors convicted.

“Unsuspecting citizens inadvertently gave money to the three individuals, convinced they were getting a good deal. The three

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even sold areas earmarked for public works”, the document reads.

Presented with the facts, the Maputo Municipal Council decided on the restoration of law and order in the area and ordered the seizure and demolition of illegal constructions.

Their owners must now approach the KaMavota Municipal Administration District and demonstrate the legality of land tenure (there is no land ownership in Mozambique) and constructions within 48 hours of notification, after which, if proof of land rights has not been made, procedures according to the law will be carried out.


Telecommunications:

Microsoft working with Mozambique government on IT

US multinational technology company Microsoft is to work with the Mozambique government to maximise the use of the company’s information and communication technologies (ICT) for the social and economic development of the country.

Microsoft and the government will analyse the use of ICT to leverage strategic areas of national development like agriculture, energy, infrastructure and tourism.

The parties signed a MoU in Maputo on Wednesday 24 August, covering collaboration on developing solutions to promote interoperability of government institutions and the reform of the education sector through technological solutions to improve the quality of teaching and school management.

The agreement was signed by Microsoft’s Vice-President for Europe, Middle East and Africa, Giuseppe Marci, and the Mozambican Minister of Science and Technology, Higher and Technical Vocational Education, Jorge Nhambiu.

Proposed activities also include the training of civil servants in Microsoft’s productivity solutions and ICT support for the government’s work towards the United Nations’ Sustainable Development Goals in the health, education, industry and innovation sectors.

Minister Nhambiu said he hoped the new ICT policy would address the current challenges facing the country, and expects to have proposals for a strategic approach and updated technological solutions that reflect the current stage of technological development soon.

“We would like to have Microsoft as an ICT technology partner, and rely on its contribution both in the design of policies and strategies and in their implementation. We would also like to work with Microsoft on specific national human resources training programmes in the use of Microsoft products and solutions for the public sector and higher, technical and vocational education institutions”, Minister Nhambiu said.

The minister also said he hoped to learn from Microsoft’s experience on the role of the private sector in addressing this technological challenge.

In response, Marci said he recognised the importance of technology in the development of the country and assured the minister that Microsoft would work with the Mozambican government in training in the use of its ICT technologies.

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“We will work together to improve government service systems, to augment access to technologies and their use in education, health and agriculture. We will train students, doctors, nurses and private sector workers. We want to empower people and organisations”, he said.

The memorandum does not specify the overall value of the project, but notes that Microsoft will provide at least US$160,000 for the implementation of a government email service.


Satellites for Africa: as bandwidth grows, business slows

Communications satellite services provider Intelsat plans to launch two satellites on 24 August in what the company described as a significant moment for a largely underserved African market, IT Web Africa reported.

Intelsat 33e will join two other satellites to cover Africa and the Middle East.

Intelsat 36 will mostly serve pay television provider MultiChoice, a Naspers-owned video entertainment and Internet company based in South Africa that does business across the continent.

“Just watch, price increase incoming for DSTV subscribers,” an IT Web Africa viewer said on the site’s comments section.

Launching two satellites simultaneously is unusual, but it makes commercial sense for the company and the timing is right, said Brian Jakins, Africa regional vice-president of sales at Intelsat.

“They serve the same market predominantly”, Jakins said. “Africa has shown a lot of growth on the broadband side and there is also a lot of growth on the media side as well. I think (the dual launch) was related to a combination of timing and commercial attractiveness”.

Intelsat, which has offices in the US and Luxembourg, operates a fleet of 50 communications satellites in geostationary orbit. It has one of the world’s largest commercial fleets.

A satellite in geostationary orbit appears to remain in the same spot in the sky but it’s actually moving at the same speed as the Earth rotating below, according to Galactics. It’s usually very high up – 22,276 miles above the equator.

Earnings are down:

For the second quarter of 2016, Intelsat reported earning US$228.3-million (42% of its total revenue) from network services – a decrease of 16% compared to the same period in 2015.

Media revenue was US$211-million (39% of Intelsat’s total revenue) in the second quarter – a 5% decrease. Government revenue was US$93.6-million – 17% of Intelsat’s total revenue.

Intelsat is struggling to service US$15-billion in debt at a time of slow growth in its satellite telecommunications business, Space News reported on 18 May.

Just to maintain its current fleet requires a capital investment in about three satellites per year.

The entire fixed satellite services sector is under pressure from the economic slowdown in certain regions coupled with

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an increased supply of satellite bandwidth, according to Moody’s.

Intelsat, Paris-based Eutelsat and Luxembourg-based SES are the three biggest global commercial satellite fleet operators. Fresh concerns about the near-term prospects for the major satellite fleet operators were raised after Eutelsat issued a revenue and profit warning on 12 May.

Their businesses are not interchangeable, according to Space News. Each has its own unique business focus. But they are similar enough that a problem in one will rattle the nerves of investors in the other two.

Jakins said there’s growing demand by its customers for higher capacity and efficiency. Trends show Africa’s growth prospects in communications, broadband and media.

“The market is robust and it is growing”, he said. “If you look at Africa’s Internet penetration, we have been trailing at around just under 15%. Our population as a region is often compared to Latin America and their Internet penetration is almost at 40%, so from an Internet penetration perspective you can see that there is a huge demand for broadband capacity”.

Intelsat has about 300-million broadband connections and the market is generally underserved, Jakins said.

“There is a large population across sub-Saharan Africa that are not connected to any form of technology and this is where satellite plays a big role by enabling us to connect those at the last mile – to connect those rural and underserved communities”, he said. “Satellite … is

ideally placed to service all those markets”. Partnerships with mobile network operators and others are managed by Intelsat staff from offices in South Africa and Senegal.

Intelsat customers include Coca-Cola, MultiChoice, Vodacom and Gondwana International Networks subsidiary AfricaOnline.

Another launch is scheduled in February, and seven satellites are planned over the next four years. Intelsat is also working on low constellation satellites which will bring lower latency, higher speeds and greater capacity.

Source: AFK Insider

Tourism:

Volpi eyes a comeback in tourism

In mid-August, the firm headed by Italian businessman Gabriele Volpi, Orlean Invest Holding, acquired a 95% stake in the Mozambican firm Verdemar Ltda.

Active in the holiday trade, Verdemar can boast of having Simone Santi, Mozambique’s honorary consul in Italy, as an administrator. Santi also serves as president of the Mozambique-Italy Chamber of Commerce and is a founder of Expo4business, a firm that organises business encounters between Italian and foreign entrepreneurs.

Since President Filipe Nyusi came to power in January of last year, Volpi has no longer been in good odour in Maputo. In April the government ordered Orlean Invest to rein in its plans for an oil logistics platform in Pemba (Cabo Delgado Province).

Source: Africa Intelligence

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Mozambican hospitality sector concerned about military instability

Located 756-kilometres north of Maputo, Inhassoro has beautiful beaches, but local tour operators are desperate because of the military instability.

Hotel Esterla do Mar is one of the main hotels in Inhassoro, but owner Aziza Esmael says that there is almost no tourism in the district any more.

Unlike Vilankulo and Inhambane, where most of the tourists are South African, Inhassoro’s visitors come mainly from Zimbabwe and the provinces of Tete and Beira.

Before the resumption of military attacks, Inhassoro was abuzz with activity. But now, because of the political and military situation, the hotel is almost empty, going for months without a single guest.

Hotel Esterla do Mar currently has 17 employees, but had more in the past. Because of the crisis, Esmael has had to lay off six workers.

The situation is difficult, but entrepreneurs refuses to give up. On the contrary, they are increasing capacity.

Source: VOA Português

Other:

South Africa plans to promote local companies in Mozambique

South African companies will participate in the 52nd edition of the Maputo International Trade Fair next week, said the Department of Trade and Industry.

The trade fair (commonly known as FACIM) is an international multi-sectoral

fair held annually to showcase Mozambique as an attractive destination for trade and investment.

Twenty-seven South African companies are set to participate in the fair that takes place in the Mozambican capital from 29 August to 4 September.

According to the South African Minister of Trade and Industry, Rob Davies, FACIM will expose South African companies to trade and investment opportunities available in Mozambique and other countries participating in the exhibition.

“The department is striving to facilitate economic development through promoting outward investment, intra-Africa trade, regional industrialisation and infrastructure development within the Southern African Development Community (SADC) region and the rest of Africa.

FACIM will be a good platform to promote South African manufactured products in the Mozambican market and beyond”, said Minister Davies.

Last year, the trade fair attracted 680 foreign companies, compared to 651 foreign companies in 2014. Thirty-one countries participated in the trade fair last year, compared to 26 countries in 2014.

Foreign countries that participated in FACIM 2015 include South Africa, Zimbabwe, Germany, Brazil, Italy, France, Spain, Macau, Indonesia and the Netherlands.

One of the department’s strategic goals is to grow the South African manufacturing sector in order to promote industrial development, job creation, investment and exports.

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“In order to achieve this objective, the department embarks on international missions and participates in targeted international trade exhibitions in order to promote exports of South African value-added goods and services to increase market share in various regions of the world.

“This will enable South African businesses to access global markets, which will lead to them increasing their production, thereby growing the South African economy and creating employment”, said Minister Davies.

The participation of the South African companies in the popular fair is through the department's Export Marketing and Investment Assistance (EMIA) scheme.

The objective of the scheme is to develop export markets for South African products and services and to recruit new foreign direct investment into the country.

Mozambique is one of South Africa’s top five trade partners in the SADC region. Trade between the two countries totalled more than ZAR39-billion in 2015.

Source: SAnews.gov.za (Tshwane)

RDC anticipates having Choppies as a tenant in Mozambique

RDC Properties Limited will in the near future complete its retail developments in two sites in Maputo – one of which will launch the local mega grocery store, Choppies in the country, a move that will see the mass retailer continue to break the mould.

At the company’s financial results presentation, RDC‘s Chairman, Guido Giachetti, disclosed that the tenant lease agreement has been signed.

The two sites – one in Zimpeto and the other in Xai Xai where Choppies will be a tenant to RDC – are considered to be promising locations. RDC described the economic outlook for Mozambique as “although tough in the short-term, is very promising in the medium-term with the current oil and gas developments taking place”.

Regarding the two developments in Mozambique, RDC anticipates the completion of the projects by the end of 2017, and expects two more to be complete by 2018.

Giachetti estimated that the initial investment will cost P75-million, adding that the developments will be funded by the company’s cash balances.

Regarding developments in Namibia, RDC considers the country’s outlook as promising citing a stable political environment and positive economic prospects attributed to the development of new mines and diversification of the economy.

“At this stage 14 sites have been identified and two pieces of land have been already reserved for development. The preliminary designs, market research and feasibilities are underway for many centres around the country”, said the company. RDC intends to maintain and increase the marketing tools as a way of assisting the growth of the company.

The strategies include reducing vacancies by increasing lettings, looking for development opportunities to grow the portfolio and building and maintaining relations with their tenants.

Source: Sunday Standard

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Maputo International Advertising Festival postponed

The 11th Maputo International Advertising Festival, scheduled for 5 to 8 September 2016, has been postponed and the festival organisers AMEP, along with the Mozambican Association of Marketing, Advertising and Public Relations, hope to announce a new date soon. The new date for the festival, to be held at the Montebelo Indy Congress Hotel & Spa, in Maputo, will be announced by AMEP within two weeks, following contacts and negotiations with public and private, national and foreign entities.

The postponement decision is due to the fact that the minimum and necessary financial conditions were not met for the Festival to take place successfully on those dates. According to the press release, the organisers deeply regret the postponement.

“The national and international economic situation and the deep and growing disinvestment in the advertising industry, forced agencies and advertising producers from many countries to reduce their investment in participations in international festivals and competitions”.

“At the end of the registration deadline, 15 August 2016, the number of participating agencies was very low, which makes the

realisation of the festival unfeasible and unjustifiable, especially with regard to travel to our country of the international jury”. AMEP has informed agencies and advertising producers that they will be reimbursed for payments already made through their respective applications. Sponsors who have made their payments will also be reimbursed. AMEP reports that listed material may be considered as valid to the competition within the new dates of the festival and others are likely to be registered within the new registration deadlines to be fixed.

“AMEP regrets and asks immense apologies for all inconvenience that have been or may be caused by this decision and hopes that all agencies and advertising producers continue to join the Maputo Advertising International Festival as an important reference in their work schedules.

“After a year of AMEP’s activity, considered to be fruitful and successful – in which we highlight the work done by the national government that allowed the reform of the Advertising Code – our Association regrets not achieving the established dates to hold the annual International Advertising Festival of Maputo”.

Source: Bizcommunity

POLITICS

Luisa Diogo denounces undisclosed debts

The undisclosed debts contracted under the previous government, headed by president Armando Guebuza, were “not transparent, responsible or serious”,

declared former prime minister Luisa Diogo, on Monday 22 August.

She was referring to the hidden government guarantees for loans from Credit Suisse and the Russian bank VTB for the quasi-public companies

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Proindicus (US$622-million) and MAM (US$535-million). When the known bond issue of US$850-million for Ematum is included, these government guarantees, issued in 2013-14, added US$2-billion to Mozambique’s foreign debt, pushing it to unsustainable levels.

Giving a lecture on the thinking of the country’s first president, Samora Machel, on national economic development to students of Maputo’s Higher School of Accountancy and Management, Diogo was asked what she thought Machel’s attitude would have been towards the “hidden debts”.

According to a report in Tuesday’s issue of Mediafax, she did not directly answer this question, but pointed out that the loans violated the procedures for contracting debts.

This is a matter on which Diogo has a great deal of expertise. Under the governments headed by president Joaquim Chissano in the late 1990s, and the start of this century, she was the key figure in negotiating debt relief, and Mozambique’s membership of the Heavily Indebted Poor Countries (HIPC) initiative. Under HIPC, and the subsequent Multilateral Debt Relief Initiative (MDRI), Mozambique’s debt burden was slashed, bringing the foreign debt down to tolerable levels.

But now, with the Ematum, Proindicus and MAM loans, the work done by Diogo and her colleagues has been frittered away.

“The process was not transparent, responsible or serious”, she said. “The people who contracted the loans did not take into consideration the consequences that could arise”.

“The management of the public debt was not handled carefully”, Diogo accused, and as a result “the donors are beginning to be very demanding and to control what is done with the money”.

Indeed, when the Proindicus and MAM loans became public knowledge in April, the IMF suspended its programme with Mozambique, notably the disbursement of a second instalment of a loan from its SCF. Other partners followed suit, and all the donors and funding agencies that provided direct aid to the Mozambican State Budget have suspended disbursements.

IMF Managing Director, Christine Lagarde, publicly declared that corruption lay behind the undisclosed loans, and the IMF, in addition to major donors such as Britain and the United States, is calling for an international forensic audit of the loans to establish exactly what the money was spent on.

Source: Agencia de Informacao de Moçambique/Mediafax

Mediators cause confusion as war escalates – Joseph Hanlon

Attempts by mediators to push the talks forward created confusion and discord and seem to have left the government and Renamo more entrenched in their positions. Meanwhile the war has intensified, with Renamo attacks on towns and visits by President Nyusi to war affected areas.

Government denies agreed statement promises Renamo governors soon:

“With respect to [the first point on the agenda], ‘Governance of Renamo in the six provinces’, legal mechanisms must be found for interim appointments of

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provincial governors coming from the Renamo Party as soon as possible”, states a paragraph in a one-page statement drafted by the mediators and signed Wednesday 17 August, by negotiators on both sides.

This was immediately reported in the electronic media as a concession by government that some Renamo governors would be named, and that it would happen soon.

Jacinto Veloso, head of the government negotiating team, rushed out a statement that afternoon denying that interpretation, and saying it must be seen in the context of the whole joint statement.

Veloso argues that the phrase “as soon as possible” was “perhaps an error” because it must take into account that legislation must be approved by parliament, and that nothing is agreed until the whole package is approved by President Filipe Nyusi and Renamo leader, Afonso Dhlakama, when they meet sometime in the future.

And there is nothing to say that Renamo governors have been agreed: “It could be zero provinces, it could be two, it could be five, or even more” – this has to be negotiated in the national interest.

In a press conference Veloso added that there was no chance that Renamo governors could be named before 2019 election – it would be “unacceptable to the government and out of the question”.

He also argued that this paragraph, the penultimate in the statement, must be seen in the context of the main agreement, which was simply to pass

the issue of Renamo’s demand for six governors to a sub-committee of the negotiators which, with the presence of mediators, would draft legislation to be presented to parliament. Therefore, the issue has been moved forward without so far resolving any of the substantive issues, such as how governors are to be selected or elected.

The statement says: “the matter should be discussed in the framework of national unity and the administrative decentralisation process, giving greater decision-making powers to local state organs, including financial resources and decentralised election/appointment of provincial governors”.

The statement says that the sub-committee will prepare a legislative packet consisting of constitutional amendments and changes to six laws on provincial administration and finance, and take a new look at a 1994 law on elected district councils which was passed by parliament but then decided to be unconstitutional and never revised or resubmitted.

Finally, the statement says that the package must be ready to go to parliament by the end of November. Veloso said he said in the negotiating session that this was “unrealistic”, but Renamo and the mediators wanted it left as is.

The sub-committee met for six hours on Thursday 18 August, and the entire Joint Commission met for four hours in the late afternoon to discuss a truce or ceasefire, and a way for the mediators to meet Dhlakama.

Mediators on Friday 19 August, met separately with the two sides.

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Comment:

The Wednesday statement is confusing, but does involve small concessions on both sides. Government does appear to have accepted faster decentralisation and at least some Renamo governors, while Renamo has accepted the phrase “national unity”, which will be interpreted as a unitary, centralised state and not federalism.

Veloso’s reply is much longer than the original statement and points to the sharp divisions within Frelimo. In retrospect, an unusual statement made by President Nyusi now looks aimed at the Frelimo hard-line; speaking in Inhassoro (Inhambane Province) on 11 August, he said that the people in the negotiating team “are serious, competent, experience and adults. They cannot be treated as errand boys”.

Did Veloso come under pressure from Frelimo hard-liners who see him simply as an errand boy and feel he made more concessions than he was permitted, as suggested by Savana, or did he feel the need to argue that the paper represented no concessions?


Joint Commission meets, but no public statements

The Joint Commission between the government and the opposition Renamo met again in Maputo on Thursday 18 August, but neither side made any statement to the press.

At the previous meeting, on Wednesday morning, a consensual statement on decentralisation was read out, which gave the impression that provincial

governors drawn from Renamo could be appointed in the near future. However, later on Wednesday, the head of the government delegation, former security minister Jacinto Veloso, declared that the appointment of governors could not be taken in isolation from the other matters on the agenda of the Joint Commission, which include a cessation of hostilities and the disarming of Renamo.

Despite meeting for more than three hours on Thursday, the commission seemed to make little progress. The co-ordinator of the team of foreign mediators, Mario Raffaelli, told reporters that: “Today the meeting was inconclusive, and so we shall meet again tomorrow (Friday)”.

According to a report in Friday’s issue of Mediafax, Renamo presented a “prior point” at the start of the meeting, protesting at the press conference given by Veloso on Wednesday evening, claiming that it was a breach of the Joint Commission’s protocol.

Renamo claimed that the Wednesday morning statement had been clear and represented an understanding between the two sides, and there was therefore no reason for the government to react to “wrong interpretations” in some of the media. Renamo argued that any clarification should have been given jointly and not just by Veloso.

At the press conference Veloso had warned against any belief that the appointment of provincial governors from Renamo was imminent. “If anyone says that the government has already agreed to appoint governors from Renamo for six provinces, this

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conclusion is absolutely wrong”, he stressed.

Mediafax also learnt that on Thursday, from 09:00hrs until about 13:00hrs, the sub-commission charged with drawing up draft legislation on decentralisation, to be submitted to the National Assembly, held its first meeting.

In the afternoon, between 15:00hrs and 19:00hrs, the entire Joint Commission met, and the main items under discussion were a cessation of hostilities and the proposed visit by the mediators to the central district of Gorongosa to meet with Renamo leader Afonso Dhlakama at his bush headquarters.

It was expected that discussion on these matters would continue on Friday.

On Thursday, the National Defence and Security Council (CNDS), an advisory body to the head of state, also met, and called for an immediate end to all military activities.

It condemned the loss of human life, and said there was no justification for the murder of defenceless people.

The CNDS encouraged President Filipe Nyusi to continue his effort to obtain effective peace, maintaining total openness to dialogue.

It praised the progress made so far by the Joint Commission, and urged all of Mozambican society to place the country above any other interests, and to unite to secure the normalisation of the lives of all Mozambicans.


Peace talks proceed in Maputo between obstacles and advances

There was optimism on an agreement for a cessation of military hostilities in Mozambique, with the government and Renamo Joint Committee delegations holding separate working sessions on Friday 19 August to debate – for the second consecutive day – the cease-fire point of the agenda.

The spokesperson for the international mediators, Mario Raffaeli, said at the end of the meeting that they were “discussing, discussing, discussing”.

Uncertain climate:

But last week ended in an atmosphere of uncertainty over what the delegations understood to have been agreed in relation to the agenda item concerning the requirement of the largest opposition party to rule in the six provinces where it claims to have won in the last elections.

The head of the Renamo delegation, José Manteigas, said that the two parties had agreed to find legal mechanisms for the interim appointment of Renamo provincial governors in the six provinces as soon as possible.

But the head of the government delegation, Jacinto Veloso, said that the two parties had not reached any agreement and that the final decision on the matter would be taken by President Filipe Nyusi and the leader of Renamo, Afonso Dhlakama.

Analyst Fernando Gonçalves told Deutsche Welle Africa that he sees no reason for diverging. “We have all seen what is on the paper. What the document says is that everything has to

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be done so that, as soon as possible, governors from Renamo are appointed for the six provinces”.

The Joint Commission also agreed to establish a sub-commission to prepare a legislative package that is to come into force before the next elections.

Analyst Alexandre Chiure argues that: “The fact that the Joint Commission has decided to review a package of laws implies that it is precisely to accommodate this situation which is being raised by Renamo”.

The package provides for the timely revision of the Constitution, the revision of the law of the state agencies, revision of the law of provincial assemblies, approval of the law of the governing bodies and the law of provincial finances, revision of the law of the bases of organisation and functioning of public administration and the revision of the municipalisation model of all districts.

Electoral package ready in three months:

The electoral package is supposed be ready by next November, but Gonçalves considers that too little time. “There are seven legal instruments, including the Constitution, to be revised, although there is a sub-commission that will handle it, I think that three months is too little time”, he says.

Negotiations between the government and Renamo have been marked by both advances and apparent setbacks. Chiure considers this normal given the complexity of the subject under consideration.

“What is needed is sufficient discussion to reach an enforceable agreement, an agreement which will then be implemented by both parties with neither party later feeling that it has been misled by the other”, he says.

Increased violence:

But as peace negotiations continue, violence escalates. Asked by Deutsche Welle Africa, Chiure said that: “This is a Renamo strategy to be in a strong position to demand and win political battles at the negotiating table”.

However, the two analysts expect a positive outcome from the negotiations between the government and Renamo and believe they will reach agreement on the termination of military hostilities.

Gonçalves goes as far as saying: “We could even hope that, maybe by the end of this year, a final agreement is reached to end the current situation in Mozambique”.

Source: Deutsche Welle

Cease-fire: mediators claim “some advances” in government-Renamo talks

On Monday 22 August, the foreign mediators in the dialogue between the government and Renamo told reporters that there have been “some advances” in discussions on a cessation of hostilities.

“There are some points in the proposal that are not a problem for either side. They can be agreed”, said the Italian co-ordinator of the mediators, Mario Raffaelli. “But there are other points that need deeper discussion”.

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Raffaelli said the discussion on a cessation of hostilities began at last Friday’s meeting of the Joint Commission. It is based on a proposal from the mediators to re-establish effective peace in Mozambique.

The proposal, he added, takes into account “what was discussed with both delegations in the bilateral meetings that were held last week”.

Raffaelli gave no details as to the content of the mediators’ proposal, and neither the government nor the Renamo delegations were willing to speak to the press.

On Monday, the Joint Commission suspended meetings until Wednesday 24 August.

Rafaeli said that the two parties had a day to deepen reflection on the proposal of the mediators for the cessation of hostilities in Mozambique.

Source: Agencia de Informacao de Moçambique/TVM

Mozambique peace talks suspended with no cease-fire agreed

Peace talks between the government and Renamo have been suspended as the two sides failed to agree a cease-fire to end fighting that’s killed hundreds of people.

International mediators want to hold talks with President Filipe Nyusi before negotiations resume on 12 September, Mario Raffaelli, the co-ordinator of an international mediation team, told reporters on Wednesday 24 August.

He appealed to both sides to “refrain from all violent actions to relieve the suffering of the Mozambican people”.

Renamo had sought a withdrawal of government forces from around the Gorongosa National Park – where the opposition group’s leader, Afonso Dhlakama, is believed to be hiding – before agreeing to a truce, Raffaelli said. Government forces have declined to withdraw from the area because they are protecting people and property, he said.

According to Notícias, during Wednesday’s Joint Commission session, which lasted six hours, both delegations agreed that a suspension of military hostilities is needed in order for the international mediators to carry out a planned visit to Gorongosa, where they hope to meet with Dhlakama.

Source: Bloomberg/Jornal Notícias

Facing rigidity on both sides, mediators take a break

Faced with inflexibility on both sides and no progress at a six-hour session on Wednesday 24 August, mediators announced they are taking a break and would only return to Mozambique on 12 September.

O País pointed to the “visible nervousness of the mediation team, particularly Mario Raffaelli, team co-ordinator”, at the end of the session at 22:00hrs in Hotel Avenida.

Talks on Monday and Wednesday were about some form of truce or ceasefire. The mediators had agreed among themselves that as they had met President Filipe Nyusi face-to-face, they

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should go to Gorongosa (Sofala Province) to meet Afonso Dhlakama.

And in discussions, both Frelimo and Renamo agreed that such a trip required a truce. The mediators’ proposal called for a “demilitarised corridor” or “other safer and more effective way” to allow the mediators to go to Gorongosa.

But Dhlakama said he would only agree to such a corridor if the government withdrew its troops surrounding his base on the Gorongosa mountain, because without that there could be no guarantee of security.

But government said it would not withdraw because that would allow Renamo to take advantage of the truce. In particular, government forces occupy some former Renamo bases, which they do not want Renamo to re-occupy. On this point there was no movement. Defence Minister Atanásio Ntumuke used a speech on 24 August to urge his opposition to withdraw from Gorongosa.

"The Defence Forces are not subject to requests or messages for withdrawal from positions and locations where there are attacks, because they are in compliance with the tasks enshrined in the Constitution”, he said. (Click here to follow link to related article). This appeared to be a message aimed at the mediators, that he would send troops where he wanted.

And it raises a question as to whether President Nyusi has power over Minister Ntumuke, or if he is taking orders from a hard-line group in the Frelimo Political Commission.

It is the army which is surrounding the Gorongosa mountain and sporadically

shelling it, but it is a police paramilitary unit FIR which is doing the actual fighting against Renamo.

FIR and the police are under the Minister of Interior, and it appears President Nyusi has more control there. On the morning of Thursday 25 August, the mediators released a copy of the ceasefire proposal that they had given to the two sides.

Just one page and with little detail, it included a call for “the suspension of all hostilities and all forms of violence across the country”, including in Gorongosa, and for an international verification mission to monitor the ceasefire.


Text of ceasefire proposal

On Friday 26 August, Savana published the full one-page text of the ceasefire proposal issued by the mediators on Wednesday, and rejected by the two sides. This is Joseph Hanlon’s translation of the text, followed by the Portuguese original as published in Savana:

Proposal of the international mediators/facilitators

The presence of international mediators/facilitators, as well as the delegation of the President of the Republic of Mozambique and the delegation of the leader of Renamo, is a response to the desire for peace of the entire Mozambican people.

The delegation of the President of the Republic of Mozambique and the delegation of the Renamo leader,

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mandated by their heads, agree to a suspension of all hostilities and all forms of violence throughout the country. The suspension shall take effect with the arrival of international observers to the country, in all areas where there are military actions, including Gorongosa.

To implement this, once it is agreed by the Joint Commission, the government of Mozambique will invite the neighbouring countries and friends that are available to mobilise and dispatch, as soon as possible, the staff necessary for there to be an International Verification Mission.

The delegation of the President of the Republic of Mozambique and the delegation of the Renamo leader, agree to create a demilitarised corridor or other safer and more effective way to allow international mediators/facilitators to engage in personal meetings with the leader of Renamo, from the moment in which the suspension of hostilities is agreed.

In order to technically implement such a demilitarised corridor, and to provide information on the movement of international observers in the agreed areas, a specific working group is established with the presence of international mediators/facilitators.

The working group, once the cessation of hostilities and all violence is respected by both parties, may propose to the Joint Commission a schedule of further steps to create the terms and conditions for a permanent ceasefire.

Proposta dos mediadores/facilitadores internacionais

A presenca de mediadores/facilitadores internacionais, assim come da Delegacao do Presidente da Republica de Mocambique e da Delegacao do Presidente da Renamo e uma resposta ao desejo de paz de todo o Povo Mocambicano.

A Delegacao do Presidente da Republica de Mocambique e a Delegacao do Presidente da Renamo, mandatadas pelas sua chefias, acordam uma suspensao, de todas as hostilidades e todas as formas de violencia em todo o Pais. A suspensao entrara em vigor com a chegada dos Observadores Internacionais ao Pais, em todas as areas onde ocorrem accoes militares, incluindo em Gorongosa.

Para o Efeito, uma vez acordado na Comissao Mista, o Governo de Mocambique convidara os Paises vizinhos e amigos que estejam disponiveis a mobilizar e enviar, o mais cedo possivel, o pessoal necessario para ha missao de Verificacao Internacional.

A Delegacao do Presidente da Republica de Mocambique e a Delegacao do Presidente da Renamo, concordam em criar um corredor desmilitarizado ou outra forma mais segura e eficaz para permitir que os mediadores/facilitadores internacionais tenham encontros pessoais come o Presidente da Renamo, a partir do momento em que a suspensao das hostilidades for acordada.

Com a finalidade de implementar tecnicamente tal corredor desmilitarizado, e para fornecer indicacoes sobre a deslocacao dos Observadores Internacionais nas areas

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acordadas, e estabelecido um working group especifico com a presenca dos mediadores/facilitadores internacionais

O working group, uma vez que a suspensao das hostilidades e todo tipo de violencia seja respeitada por ambas as partes, podera propor a Comissao Mista um calendario de etapas posteriores para criar os termos e as condicoes de um cessar-fogo permanente.

Source: Mozambique News Reports and Clippings/Savana

“Peace, but not at any price” – President Nyusi

On Thursday 25 August, President Filipe Nyusi rejected the successive demands that Renamo has been placing on the dialogue table as conditions for the cessation of military hostilities.

Speaking at a press conference in Beira, at the end of a working visit to the central province of Sofala, President Nyusi warned that real peace cannot be bought “at any price”.

On the contrary, real peace must be reached in a sustainable manner, and not in an “emotional” burst that ignores the Mozambican Constitution.

“We have to find a solution that is sustainable and viable”, said the President. “Not one that rips up the Constitution, or overthrows the democracy that is a reality in this country”.

He noted that there have been peace agreements before, but “they did not bring effective peace”. Indeed, the only peace agreement that had proved lasting was the agreement on

Mozambican independence signed between Frelimo and the Portuguese government in 1974.

There have been two agreements between the government and Renamo. The first was the General Peace Accord of 4 October 1992, and the second was the Agreement on a Cessation of Hostilities of 5 September 2014.

Both these agreements foundered because Renamo violated them by keeping its own private militia, rather than demobilising all its forces. That militia was sent back into action to resume the conflict in June 2013, and again in February of this year.

President Nyusi said that Mozambique cannot just carry on signing agreements on the same subject, but must bring it to a definitive conclusion.

“We must continue to be a serious and determined people”, he said, “a people that cannot be manipulated. That is the effort that we are making”.

The latest Renamo demand, which has sabotaged plans put forward by international mediators for a truce, is that the defence and security forces should withdraw from the positions they currently hold in Gorongosa, near the Renamo headquarters where rebel leader, Afonso Dhlakama, is currently living.

“Where should we withdraw to?” mused President Nyusi. “That’s the problem. Because the Renamo attacks are now occurring in Maua (Niassa Province), they’re occurring in Morrumbala (Zambézia Province), so where do we withdraw to?”

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During all the rallies President Nyusi had addressed in Sofala, his audience had called for continued dialogue with Renamo to re-establish peace as quickly as possible. “We would like peace to come tomorrow, or today, or even yesterday”, he said. “But what we are doing is shortening the waiting time, because the people cannot continue dying, without hope”.

President Nyusi said there was no alternative but to work for peace, and he assured the reporters that the government is doing all in its power to restore peace as quickly as possible.

He pointed out that coexistence with opposition parties is quite possible and cited the example of Beira municipality, which is currently run by the second largest opposition party, the Mozambican Democratic Movement (MDM). MDM leader Daviz Simango is Mayor of Beira and has a cordial relationship with President Nyusi.

“As you know, Beira is led by the opposition”, he said, “but the environment here is totally democratic. It’s an environment that encourages Mozambicans to work together”.

Beira was living proof that there was no need for Mozambicans to fight each other, President Nyusi added, “because there is space for all of us to work”.


Dhlakama intransigent on ruling six provinces

Renamo leader, Afonso Dhlakama, has insisted that his top priority in the current talks between the government and his party is to take control of the six central

and northern provinces where he claims that Renamo won the 2014 general elections.

Interviewed in the latest issue of Savana, Dhlakama was utterly intransigent, demanding that the Constitution be amended to suit his demands.

He rejected the idea that Renamo could propose names for provincial governors who would then be appointed by President Filipe Nyusi, an arrangement that would not need any constitutional amendment. “If I were to give a list to [President] Nyusi, it would seem that I am offering Renamo cadres to work with Frelimo policies”, Dhlakama said.

Once again, Dhlakama recycled the Renamo claim that President Nyusi is only in power because of electoral fraud. “Everybody knows that [President] Nyusi did not win the elections, but he is governing”, he claimed.

“Everybody” knows nothing of the sort. Renamo has never provided any evidence for generalised fraud – certainly nothing that can account for the gap of a million votes between President Nyusi and Dhlakama. The elections were fought after the electoral legislation was altered in exactly the way that Renamo had demanded, producing laws which Dhlakama had boasted would be invulnerable to fraud.

Dhlakama told Savana that, at most, President Nyusi could swear Renamo provincial governors into office, but they would work with Renamo policies (although he did not state in what way these policies would be different from current government policy).

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“The existing governors will have to leave, and political and administrative powers delivered to governors appointed by Renamo”, he said. “That’s what we want. We’re not demanding anything out of this world”.

Dhlakama added that, if offered the post of Deputy President, he would reject it because “I cannot work with Frelimo”. He alleged that Frelimo remains “Marxist” (although in reality Frelimo abandoned Marxism at its Fifth Congress, in 1989). He feared that, if he were to accept a senior position, he would suffer the same fate as Zimbabwean opposition leader Morgan Tsvangirai and “end up disappearing”.

“There must be a constitutional amendment which says that the provinces are governed by the winning party”, insisted Dhlakama.

Dhlakama’s claim that Renamo won in six provinces (Sofala, Manica, Tete, Zambézia, Nampula and Niassa) is not often challenged, but it happens to be untrue. Dhlakama topped the presidential poll in all of those provinces except Niassa, but in the parliamentary elections Renamo took a majority of votes in just two provinces, Sofala and Zambézia. In the elections for provincial assemblies, Renamo won a majority in Sofala, Zambézia and Tete. As for Niassa, Frelimo won in all three elections.

The Joint Commission between the government and Renamo has established a sub-commission to work on constitutional amendments and new and amended laws on decentralisation that are to go before the National Assembly. The deadline for submission is the end of November – but the head

of the government delegation, Jacinto Veloso, has warned that this is quite unrealistic.

The package consists of six laws plus constitutional amendments. To draft all of this in just three and a half months is an enormous task – but Dhlakama claimed that “with good will, it can be done by the end of September”.

But “provisionally” he would accept the Assembly just discussing and approving the constitutional changes that would allow Renamo to take over the six provinces it wants, and a new law on provincial finance.

Dhlakama said he had spoken on the phone with the group of foreign mediators who had asked him to declare a truce. He said he would only do so if the government withdrew its forces from the Gorongosa mountain range (near his bush camp in the Satunjira region).

He said he was also willing to establish a “demilitarised corridor” to allow the mediators to visit his camp. To operate such a corridor “three commanders from Renamo, three from the government and one independent could be appointed”, he suggested.

Dhlakama claimed he was concerned for the security of the mediators, because “Frelimo might assassinate mediators and blame Renamo”.


“There is a group which was created to derail independence” – Hama Thai

Veteran of the national liberation struggle, Antonio Hama Thai, says that Renamo was created to derail the

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country’s development and that it will never abandon this goal.

“There is a group that was created to derail independence, so it destroyed everything. They burned buses, destroyed hospitals, and went about this for 16 years. The group, which is now called Renamo, has been improved, but its objective, which was to derail any ruling made by Frelimo, has not changed”, he said.

Speaking on Friday 19 August, at a lecture on ‘Life and Work of Samora Machel’, Hama Thai, who is also a member of the Joint Commission of the political dialogue, said that the first president of Mozambique was killed by people who hated him for his determination and leadership.

The lecture is part of the commemorations of the 30th anniversary of Machel’s death on 19 October 1986 in a plane crash at Mbuzini in South Africa.

Source: O País

Hunguana warns of ‘liberators’ suppressing dissent

Some of those who call themselves “comrade liberators” are viscerally anti-democratic and hostile to different types of thinking typical of democratic systems, warned Teodato Hunguana.

His outspoken comments carry weight because of his standing in Mozambique, and they underline the deepening divisions within Frelimo.

A lawyer, Hunguana was a minister of information in the one-party state era, a Frelimo member of parliament, and finally a member the Constitutional

Council. He was speaking on 10 August at a conference to mark the 25th anniversary of Mozambique’s press law.

“I have no doubt that outrages and assaults are perpetrated by organised groups for the purpose of restricting freedom of expression, and imposing a regime of fear, silence and intolerance” with the ultimate aim of “restricting and curtailing our very citizenship”, he said.

These “organised groups” are using all means ranging from social media to the “law of the bullet” to intimidate critics.

He continued: “people have fallen, have been shot, because they think, because they have the freedom to think and express what they think. This is serious”.

The removal of a memorial to Gilies Cistac underlines both the sense of intimidation and the deep splits in Frelimo. A highly respected expert on constitutional and administrative law, but also sometimes a thorn in the side of government, Cistac was gunned down in 2015.

In March the Universidade Eduardo Mondlane (UEM) Law Faculty – where Cistac had taught – erected a memorial stone and named the library after Cistac.

This was seen by some inside the party as an implicit criticism of Frelimo. Early this month UEM removed the stone and renamed the library, saying only that the proper procedures had not been followed.


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Indonesian ambassador optimistic about peace in Mozambique

The Indonesian ambassador in Mozambique, Tito dos Santos Baptista, praised the continuous efforts made by the government and Renamo towards the achievement of a lasting peace in the country.

Speaking on Wednesday 17 August in Maputo, on the occasion of the 71st anniversary of Indonesian independence, Ambassador Baptista expressed his country’s desire to see the two parties reach a final agreement as soon as possible.

On the topic of bilateral relations, the Indonesian diplomat said that the two countries are committed to strengthening relations, particularly in the political and economic spheres.

With regard to economic relations, Ambassador Baptista presented a balance of the activities developed between the two countries over the past five years. This includes import and export of products such as palm oil, heavy equipment, a variety of basic and essential foodstuffs and textiles. “But the scale of import and export does not reflect the true commercial potential of the two countries, as we hope it will come to fruition in the future”, he said.

Concerning the investment sector, the diplomat made specific reference to the Indonesian company, Energy Mega, which is working together with ENH in natural gas research in Sofala Province. Another Indonesian company, Besmindo Pemba Semesta Lda., operates in Cabo Delgado in the area of oil and gas services.

Social and cultural co-operation between the two countries over the past few years has been strengthened, especially in the form of training (academic and non-academic). The diplomat noted that a large number of Mozambicans have participated in training courses and workshops offered by Indonesia in agriculture, fishing, defence and security, capacity building and risk and disaster management. In addition, Indonesia also offers undergraduate and graduate level scholarships in the areas of art and culture.


President Nyusi visits Sofala

On Monday 22 August, President Filipe Nyusi commenced a four-day working visit to Sofala Province, where he visited the districts of Machanga, Marromeu, Caia, Nhamatanda and Beira, the provincial capital.

President Nyusi attended meetings with local governments and various segments of society, and held popular rallies. He also visited projects of economic and social interest.

The head of state’s visit included the official opening of the ninth National Culture Festival, held in Beira from Wednesday 24 August, under the motto ‘Celebrating Cultural Diversity for Consolidation of Peace and Development’.

While in Sofala, President Nyusi met with governor Helena Taipo, who explained that the military tension, coupled with the effects of the drought, adversely affected the implementation of

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the Economic and Social Plan (PES) in the province.

Despite the setbacks, Governor Taipo explained that, in terms of the implementation of the 263 actions incorporated in the 2015 PES, 241 were successfully completed, corresponding to 91.6%.

As such, the governor praised the role of economic agents, religious bodies and the central government for their timely response to the concerns of the population.

According to Governor Taipo, construction was the sector that stood out the most with a total investment of US$53-million, corresponding to 76.6% of total investment in the first half of 2016.

However, there are a number of challenges, such as the expansion of the water network, the rehabilitation of roads and the sustainable exploitation of natural resources.

Also on Monday, the President met with residents of Machanga district, who condemned the insurrection waged by the rebel movement Renamo.

In a message presented to President Nyusi, the residents said they live in perpetual fear of Renamo raids. “We live in sadness because of attacks by Renamo gunmen”, the message said. “We live in uncertainty. We cannot live at ease. We’ve had enough of tears of terror”.

Nonetheless, they hoped that President Nyusi’s repeated messages calling for dialogue to achieve effective peace would bear fruit, and that Renamo would

eventually understand the need for dialogue to attain stability.

“We call for dialogue. It’s through dialogue, and not through guns that Mozambique will grow”, stressed the message.

Speakers at the rally also called on the government to ensure that banking services become available in the district, that a rural hospital be built in Machanga town, and that the road linking Machanga town to the main north-south highway (EN1) be paved.

In response, President Nyusi pledged that he will do all in his power to attain peace, and urged the population to preserve national unity. “When we are united, nobody can defeat us”, he said, adding that the government will “continue to defend the population”.

He also stressed the need for increased production – but Machanga is one of the districts in central and southern Mozambique affected by this year’s drought.

Nonetheless, President Nyusi urged Machanga farmers to prepare for the coming rainy season (which is expected to begin in October), since the forecast is for normal rainfall.

“Start to prepare your fields now”, he said. “The high cost of living is due to poor production. We don’t want families to weep of hunger while it is raining. Let’s get to work”.

Speaking on Tuesday in Nensa, Marromeu district, President Nyusi reiterated that it is the government’s duty to protect the public from attacks by Renamo.

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President Nyusi also expressed his commitment to do all in his power to bring peace to the country.

“As a government, we shall continue our effort to preserve effective peace in Mozambique”, said the President, in a speech which focused on preserving peace, strengthening national unity, increasing production and productivity, and protecting national resources.

On the topic of national unity, President Nyusi said this was an area in which Marromeu has a great deal of experience, because for years citizens from various parts of the country have come to the district to work at the Sena Company, one of Mozambique’s main producers of sugar.

“Marromeu is not a district of disunity and tribalism”, added President Nyusi. “It has experience of national unity which must be consolidated. Tribalism only delays development”.

“National unity is tolerance and respect”, he continued. “Our project of national unity is based on fighting against asymmetries, through sharing the riches existing in each of the provinces. Mozambique belongs to all of us, and what we need are opportunities for all and social justice”.

Also on Tuesday, President Nyusi visited the neighbouring district of Caia, where he addressed a rally in the Muraca administrative post, and visited the Caia Centre for Research and Transfer of Agricultural Technologies.

The President was accompanied on his travels by the Ministers of Interior, Jaime Monteiro; State Public Service and Administration, Carmelita Namashulua;

Education and Human Development, Luís Ferrão; Transport and Communications, Carlos Mesquita; Culture and Tourism, Silva Dunduru; Deputy Ministers of Foreign Affairs and Cooperation, Nyeleti Mondlane; National Defence, José Patrício; Culture and Tourism, Ana Comoana; Economy and Finance, Maria Isaltina Lucas; and staff of the Presidency and other state institutions.

Source: Folha de Maputo/Jornal Notícias/Agencia de Informacao de Moçambique

President Nyusi calls for co-ordinated actions to face Mozambican crisis

On Monday 22 August, President Filipe Nyusi argued that it is not one or other isolated measure that can solve the country’s current economic crisis, but a whole series of co-ordinated actions.

He was speaking in Beira, at the start of a visit to the central province of Sofala, where he inaugurated a cement factory, and a plant to process pigeon peas.

President Nyusi noted that when Indian Prime Minister Narendra Modi visited Mozambique in July, “we held a symbolic exchange of pigeon pea seed. Now we are delivering the final product”.

He urged peasant farmers to step up their production of this pulse, since the Indian investors guarantee a market for all that is produced.

He also visited the fisheries produce processing plant in Beira port, and, on Tuesday, inaugurated a truck screening terminal.

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To overcome economic crisis, President Nyusi declared, “a series of activities have to be undertaken, and these factories we are inaugurating are among them”.

According to the President, during his visits to the provinces he had carried a message urging the population to increase production, “but this implies a whole chain of activities”.

The call for increased production was being accepted, President Nyusi added, but problems had arisen such as access to markets, storage and processing.

The units inaugurated on Monday and Tuesday formed part of the value chain, he said, and thus contributed to solving the country’s problems.

The call for increased production was incomplete without factories to add value to raw materials, and adequate storage and market facilities.

On his arrival, President Nyusi was greeted by Sofala provincial governor, Helena Taipo, and by the Mayor of Beira, Daviz Simango.

Mayor Simango heads the MDM, but has friendly relations with President Nyusi dating back to the days when they studied together in the 1980s.

Mayor Simango also accepted President Nyusi’s invitation to become a member of the presidential advisory body, the Council of State.

At an extraordinary meeting of the Sofala provincial government, Governor Taipo said that among her top priorities were the sustainable exploration of natural resources, such as the limestone deposits in Muanza district, and the

resumption of coal traffic along the Sena railway line from Tete Province to Beira Port.

The Brazilian mining company Vale has twice suspended traffic along the line because of attacks by gunmen of the Renamo rebels against coal trains.

Governor Taipo also stressed her concern at mitigating the effect of climate change and of erosion, particularly in Beira.


Marromeu – widening divisions

Marromeu (Sofala Province) shows the divisions that need to be bridged to settle the current conflict. This is a very divided city and the formal statement to President Filipe Nyusi when he visited on 23 August was carefully crafted to be neutral: “Mr President, the population of Marromeu wants peace and not war because peace is the guarantee of our well-being.

Enough of war and misunderstanding between brothers. We have unforgettable memories of the 16-year war and do not want this scenario repeated”.

The stress on brothers clearly puts responsibility on both sides. But President Nyusi’s response was to blame Renamo and to say the government would defend the people of Marromeu against Renamo.

Municipal election results show that Marromeu is divided between the opposition and Frelimo. In the 2003 elections the Renamo candidate was elected mayor by just one vote, while

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Frelimo won a majority in the assembly by just 17 votes, leading to the first city with an administration split between two parties.

And there is a very strong suggestion that Frelimo stole the 2013 municipal elections from the MDM (Renamo did not stand).

One of the frauds we (Mozambique News Reports and Clippings) have confirmed in Mozambican elections has been polling station staff invalidating opposition ballot papers by adding a second ink mark.

Illiterate voters do make mistakes and in a normal election 4% of the votes are invalid, and in the 2008 municipal elections in Marromeu invalid votes were under 5%.

In the 2013 election the Frelimo candidate beat the MDM candidate by 3.3% of the vote, but 10.9% of the votes were invalid – unbelievably high.

The difference between the two candidates was 283 votes, but the results suggest that more than 600 ballot papers were falsely invalidated – presumably votes for the MDM.

For municipal assembly there were 12.5% invalid votes – much higher than any other municipality.

Of course this is not proof, but it is highly suggestive, because there seems no reason why the voters of Marromeu would be so much more likely to spoil their ballot papers in 2013 than in 2008.


President Nyusi joins 35 other heads of state at the TICAD-VI

On Friday 26 August, President Filipe Nyusi arrived in Nairobi (Kenya), where he will join at least 35 other African heads of state and African government representatives for the TICAD VI.

The President’s delegation includes the ministers of Foreign Affairs and Cooperation, Oldemiro Balói; Agriculture and Food Security, José Pacheco; Transport and Communications, Carlos Mesquita; Deputy Ministers of Health, Mouzinho Saíde; and of Industry and Trade, Ragendra de Sousa; and the Ambassador Extraordinary and Plenipotentiary of the Republic of Mozambique in Japan, Jose Maria Morais.

Approximately 10,000 delegates were expected in Nairobi on Friday, for the two-day TICAD VI Summit that commenced on Saturday.

Attending will be Japanese Premier Shinzō Abe, his host, President Uhuru Kenyatta, and some 35 other heads of state and government representatives.

Prime Minister Abe will hold bilateral meetings with some of the heads of state during the summit and is expected to sign 60 MoU with Kenya.

Japanese companies are quite interested in Mozambique, which has plentiful natural resources.

Prime Minister Abe visited Mozambique in January 2014, promising co-operation centred on Nacala Corridor development, and concluded an investment agreement that was the first in sub-Saharan Africa.

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Chief Representative Katsuyoshi Sudo of the JICA Mozambique Office said, “JICA has worked out a Nacala Corridor Economic Development Master Plan, which aims for implementation by 2035, and we will move forward with co-operation on repair and expansion of the Port of Nacala – the entryway to the Nacala Corridor, on strengthening electric power generation and conveyance, on improving roads, on developing agriculture, on developing society and on developing human resources”.

Source: Agencia de Informacao de Moçambique/un.org/The Nation/The Citizen/jica.go.jp

Quelimane turns 74 amidst water and electricity problems: mayor blames central government

As Quelimane celebrated its 74th birthday, the capital city of Zambézia finds itself beset with problems relating to power supply, transport and access to drinking water.

During the official celebrations on Sunday 21 August, Quelimane mayor Manuel de Araújo said that the metropolis had lost its former sparkle and its development had stagnated due to poor post-independence governance.

“The city of Quelimane was a pearl and prospered brilliantly, with modern infrastructure, paved streets and avenues and fully functioning basic services. Unfortunately, after 25 June 1975, the government relegated Quelimane to last place, as the fourth most-developed city of the country. The city has been neglected in all areas, and its development has stagnated”, the mayor complained.

On a more optimistic note, the Quelimane administrator highlighted residents’ commitment to the development of the city.

“Our people are committed to the cause of development and are bringing wonderful things to fruition to grow our city. It is true that we have many challenges ahead, but we will continue to fight for the development of Quelimane”, he said.

Source: O País

Renamo wants to increase party popularity in the southern region

Renamo plans to increase voter support in the three southern provinces of Maputo, Gaza and Inhambane, where the party traditionally records poor results in both general and municipal elections.

In order to overcome this situation in a bid to generate more votes in the 2018 municipal and 2019 general elections, the party held a meeting on Saturday 20 August, where members discussed the revitalisation of cells and the mobalisation of more members at administrative and district level.

Renamo Secretary-General, Manuel Bissopo, said that the number of votes acquired by Renamo in the south are not satisfactory, with Gaza Province generating the lowest number of votes.

According to Bissopo, efforts to generate more support will begin in Maputo, gradually moving spreading to Gaza and then Inhambane.

Source: O País/A Bola

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Peace march in Maputo

The Youth Parliament (Parlamento Juvenil), in partnership with the various civil society organisations that form part of the political dialogue monitoring panel, organised for a peaceful march to take place through the streets of Maputo on the morning of Saturday 27 August, under the slogan ‘Stop the war, the people no longer tolerate it’.

The purpose of the march is to denounce the military tension, while stressing the importance of dialogue and tolerance.

The march was scheduled to begin at 7:00hrs, departing from the Eduardo Mondlane statue, and ending at the Independence Square.

Speaking on Wednesday 24 August, at a press conference to announce the event, Salomão Muchanga, president of the Youth Parliament, explained that the peaceful march was authorised by the municipal authorities of the city of Maputo and that all conditions had been

created so that the Maputo residents could freely participate in the event in the name of peace.

Muchanga stressed that the peace march was not aligned to any party, and everyone was invited to participate.

The event also served to reaffirm that the inclusion of civil society is imperative for the ongoing dialogue.

In turn, the president of the Mozambican Human Rights League, Alice Mabota, told citizens not to have any fear when participating in the march, as it was peaceful and intended to show indignation at the high cost of living and continuing military hostilities.

“In an orderly and civilised manner, let us march! Let the march show that we do not want war”, said Mabota, who also appealed to residents, and especially the youth, not to take advantage of the situation to further other “obscure” aims.

Source: Jornal Notícias/@Verdade

SECURITY

New Deputy Chief of Staff for FADM

On Friday 19 August, President Filipe Nyusi appointed Maj-Gen Raul Dique as Deputy Chief of Staff of the country's armed forces (FADM), replacing Lt-Gen Olimpio Cambona.

Previous posts held by Dique include commander of the air force and Inspector of the FADM. In accordance with Dique’s new post, President Nyusi promoted him to the rank of Lieutenant-General.

Both Dique and Cambona were originally officers in the rebel movement Renamo, who joined the FADM when it was formed out of volunteers from Renamo and from the old government army, the FAM/FPLM, in 1994.

Dique’s appointment upholds the tradition, dating back to the creation of the FADM, that the Chief of Staff is a former officer of the FAM/FPLM, while his deputy is a former Renamo officer.

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Thus, figures originally from Renamo continue to hold senior posts in the FADM, despite the low level insurrection currently waged by Renamo in the central provinces.


Interior Minister swears in new Police Commander for Zambézia, pledges to respond with force to Renamo attacks

On Friday 19 August, Interior Minister Jaime Monteiro swore in a new Police Commander for Zambézia, and Director of Logistics and Finance.

These two new appointments were made in a bid to address the attacks attributed to Renamo gunmen in different parts of the country.

Minister Monteiro swore in Francisco Matiquita to the post of commander of the PRM in Zambézia, while Alberto Vago was appointed to the post of director of logistics and finance of the General Command of the Police.

The changes did not stop there. They extended to the appointment of Andique Molde to the post of director-general of social services.

Molde will be assisted by Nasson Keni Note.

In the context of political and military tension, Minister Monteiro promised to respond to Renamo attacks with force.

Source: O País

Frelimo secretary accuses opposition provincial assembly members of training Renamo guerrillas

Paulo Manjacunene, first secretary of the ruling Frelimo Party in Sofala Province, has accused Renamo members of the elected provincial assembly of training Renamo guerrillas in the bush of Gorongosa district, where Renamo leader, Afonso Dhlakama, is believed to be in hiding.

Speaking at a meeting of veterans of the independence war, Manjacunene said that three Renamo assembly members “travel to Gorongosa to train Renamo fighters during intervals between assembly meetings”.

He did not name these three members.

“We have one Renamo in the provincial assembly and we have another in the bush”, he said. “In our assembly, we have armed bandits who put on suits and ties and come here, claiming that they are discussing the problems of the people. But then the same individuals go back to Gorongosa to train men to murder. This is real terrorism”.

Nonetheless, Manjacunene urged the veterans to have faith in the current talks between the government and Renamo.

“Dialogue is under way”, he said, “and so you should have faith that this war waged by outside interests will end. The peace that the people long for will arrive”.


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Minister of Defence refuses withdrawal messages: Defence and Security Forces to remain in position

The Defence and Security Forces will not subject to requests or messages for withdrawal from positions and locations where there are attacks, because they are in compliance with the tasks enshrined in the Constitution.

This was the position adopted on Wednesday 24 August, by the Minister of National Defence, Atanásio Ntumuke, at a swearing-in ceremony for senior officers in the Estado-Maior-General, an act an act that took place in the presence of hundreds of soldiers, sergeants and senior officers of the army.

The ceremony formally invested former Renamo official Raul Luis Dique, who was recently promoted to the rank of Lieutenant-General and appointed to the position of Deputy Chief of the Staff of the FADM.

On the same occasion, the minister swore in Brigadier Ramiro Ramos Tulcidás, promoted to Major-General in order to perform the duties of FADM Inspector, and Colonels Matteus Mitama and Ludwig Cardoso, promoted to the rank of brigadier to direct the Departments of Information and the General Staff of the Communications FADM respectively.

Minister Ntumuke also promoted Colonel Christovao Chume, current National Director of Defence and Security Policy at the Ministry of National Defence, to brigadier.

The minister urged the officers to exercise vigilance and increase the

control of every square metre of national territory in order to assure the normal movement of people and goods while energetically fighting the promoters of instability.

“Therefore, we would like to reaffirm our confidence in the generals who have now been promoted in the military hierarchy, certain that, with their expertise and sense of mission, they will be able to so influence the armed forces in carrying out their service towards the Mozambican nation”, he said.

He explained that the promotion of new senior officers is aimed at reaffirming the country’s military expression which is rooted in the need for the Armed Forces to respond to the mandate that the Constitution conferred upon them, namely the defence of the territorial integrity, sovereignty and of national interests against potential or possible threats.

The promotion of senior officers is also of significance as part of the process of institutional renewal, some senior officers having moved to the military reserve with a view to refreshing the structure of the FADM.

The aim, according to Minister Ntumuke, is also the ongoing promotion of combative preparedness and the utilisation of the defence sector in all spheres of national power, so promoting effective peace and consolidating national unity.

“The choice that falls upon the officers now promoted to new positions and functions reflects the confidence placed in them, which is founded on professional merit, loyalty, the highest moral integrity and the need for the

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military to continue to improve the results of their joint effort in maintaining peace and tranquillity in our homeland”, said the minister.


Opposition group raids hospitals

Armed men linked to the country’s main opposition party, Renamo, have raided at least two hospitals and two health clinics over the past month.

The attacks on the medical facilities – which involved looting medicine and supplies and destroying medical equipment – threaten access to health care for tens of thousands of people in remote areas of the country.

“Renamo’s attacks on hospitals and health clinics are threatening the health of thousands of people in Mozambique”, said Daniel Bekele, Africa director at Human Rights Watch.

“Renamo’s leadership needs to call off these attacks on health facilities immediately”.

In the most recent attack, on 12 August, approximately a dozen gunmen who identified themselves as Renamo entered the town of Morrumbala (Zambézia Province), at approximately 4:00hrs, several witnesses and local authorities told Human Rights Watch.

The men first raided a police station, freeing about 23 men detained there, and then looted the local district hospital.

A nurse, who was on duty at the time, said that the men opened fire at the building.

“I was in the emergency room when they fired gunshots through the windows”, he said.

“We were hiding beneath chairs, beds … anything we could find”.

The nurse and two Zambézia-based reporters who arrived at the hospital just after the attack said that the gunmen had looted medicine from the facility’s main pharmacy.

On 30 July, a group of armed men who identified themselves as Renamo entered the village of Mopeia (Zambézia Province), at about 3:00hrs, two local residents said.

The armed men first raided the house of a local official of the governing Frelimo party, who is the chief nurse at the local Centro 8 de Março health clinic.

When they did not find him, they went to the clinic.

A doctor who visited the clinic the following day said the gunmen burned patients’ medical records and stole vaccines, syringes, and medicines.

The clinic stores essential medicines, including antiretroviral medicines for HIV/AIDS patients, for a population of over 8,000 people, he said.

The armed men then went to Mopeia’s main hospital, about eight-kilometres from the clinic.

A nurse at the hospital said that she saw about 15 men in dark green uniforms enter the main ward in the early morning, most of them armed with Kalashnikov assault rifles.

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They entered the ward where patients were sleeping, threatened patients and medical staff, ordering them to leave the hospital, and carried away medicines, serum bags, bed sheets, and mosquito nets.

The nurse said none of the patients or medical staff were hurt.

Together, Mopeia district hospital and Mopeia village clinic serve over 100,000 people, local health authorities said.

On 31 July, about a dozen armed men who identified themselves as Renamo raided the village of Maiaca, Maúa district (Niassa Province).

The administrator of Maúa, João Manguinje, told the Human Rights Watch that the gunmen attacked the local health clinic and the police station.

They took five kits of HIV tests, four boxes of syringes, and over 600 vials of penicillin, he said.

Manguinje also alleged that on 24 July, Renamo gunmen had raided the health clinic in the nearby village of Muapula, where they stole, among other things, five obstetric kits, over 200 tetanus vaccines, and over 300 vials of penicillin.

Human Rights Watch was not able to verify this attack.

Mozambican authorities say that Renamo gunmen have carried out similar attacks on health clinics over the past month in Sofala, Manica, and Tete provinces, in central Mozambique, but Human Rights Watch was not able to verify those reports.

The Renamo party, which has offices in Maputo, has neither confirmed nor denied carrying out the attacks.

However, the party leader, Afonso Dhlakama, who is believed to be hiding in Gorongosa (Sofala Province), told STV on 5 August that he had given orders to attack some areas of Zambézia Province.

He did not specify the targets or mention medical facilities.

Dhlakama said the attacks were a “military strategy” aimed at dispersing government soldiers who are surrounding Renamo positions in Gorongosa bush, about 200-kilometres south of the villages that were attacked.

Several districts of Tete, Zambézia, Manica, Sofala, and Niassa provinces have had recent armed clashes between government forces and Renamo fighters.

“Renamo’s raids on medical facilities seem part of a repugnant strategy to damage health facilities and loot medicines”, Bekele said.

“What they are succeeding in doing is to deny crucial health services to Mozambicans who need them”.

Source: Human Rights Watch

Police prevent Renamo attack in Niassa Province

On the morning of Saturday 20 August, the police aborted a Renamo attack in the town of Muaquia, Majune district (Niassa Province), arresting one armed Renamo militant in the process.

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The attack was carried out by 13 men (10 armed and three unarmed).

The attack targeted civilians in an alleged bid to cause mass panic and steal food.

According to the provincial police spokesperson, Alves Mate, the detained Renamo member remains in custody.

Mate informed the media that no injuries were reported, other than that of the detained Renamo militant, who sustained a bullet wound.

Jornal Notícias identified the detained Renamo militant as Gonçalves Joaquim Ruela.

According to the report, Ruela told the police that his group is responsible for attacks on the village of Muapula and the administrative posts of Maiaca and Nakhumua in Maua and Metarica districts, respectively.

The attacks, which all took place in the space of a month, saw armed Renamo men raid health units and steal drugs, and vandalise local secretariat and administrative posts buildings.

Majune administrator, Antonio Guido, told the media that the attack against the Muaquia administrative post was foiled because the PRM unit positioned there was prepared as a result of the population reporting suspicious movements in the days immediately leading up to the attack.

Source: RFI/Jornal Notícias/Folha de Maputo

Gunmen attack column in Báruè

On Sunday 21 August, suspected Renamo gunmen wounded four people, two of them seriously, in an ambush against a convoy travelling under armed escort from Vanduzi to the Luenha River in the central province of Manica.

This is the road from the Manica provincial capital, Chimoio, to the western province of Tete, and then on to Malawi and Zambia.

Cited in Tuesday’s issue of O País, the Manica provincial police spokesperson, Elsidia Filipe, said the attack against the first convoy of the day heading towards Tete took place in the Guta region.

She said the defence and security forces returned fire “but were unable to capture any of those involved in the attack and their whereabouts are currently unknown”.

The two seriously injured people were treated in the Manica provincial hospital in Chimoio, but one of them was later transferred to Beira Central Hospital for more specialist care.

Renamo is continuing to launch ambushes, despite the talks under way in Maputo.

Source: O País/Mediafax/Agencia de Informacao de Moçambique

Renamo stepping up attacks

The Defence Ministry claims that there were 17 Renamo attacks in five provinces between 8 July and 18 August.

There were four attacks in Sofala, three each in Niassa, Zambézia and Tete and

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two in Manica, as well as isolated killings in Inhambane.

In addition, there were three more attacks on Saturday 20 August.

In an interview published recently in Savana, Afonso Dhlakama said that the increase in attacks spread across the country was to force the government to spread out its troops and reduce their concentration near his Gorongosa base.

“This is a military strategy”, he said. “It’s in the books”.

Meanwhile, last week President Filipe Nyusi travelled to Manica Province as part of a new policy of holding rallies in war affected areas.

He arrived by helicopter, but journalists and others travelled by road.

Cars carrying journalists to a rally in Macossa were shot at on 12 August on the EN7 in Chiuala, Báruè.

This is a zone of frequent attacks and is on the stretch of the EN7 between Vanduzi (Manica Province) and Changara (Tete Province) with military convoys.

On 19 August Savana reported that the convoy included cars from EdM that were allegedly carrying soldiers. And in his Savana interview, Dhlakama claimed that four members of the FIR were killed in that attack.

He added that anyone who travels in a convoy knows they are “entering a zone of 100% risk” because this is a war zone, thus it is their own fault if they are shot.

The various press reports also make it clear that on the government side the war is being fought by the riot police, which is a seen as a trained and loyal paramilitary force, and not by the army, which is not trusted and seems limited to shelling Gorongosa (Sofala Province).

For example, Diario da Zambézia and Zitamar report that after an attack on Morrumbala town (Zambézia Province), on 12 August, two FIR brigades were moved from Sabe and Nicoadala to Morrumbala.

Other recent attacks:

20 August: Trinta, Localidade Zero, Morrumbala (Zambézia Province) – two attacks, houses burned.

18 August: Mepinha, Morrumbala (Zambézia Province) – public buildings attacked, no details.

13/14 August: Báruè (Manica Province) – EN7 convoy attacked, one dead.

11 August: Nhamatanda (Sofala Province) – police repel an attack and detain one person.

1 August: Mboza, Moatize (Tete Province) – police station attacked and car burned.


Zimbabwe style land occupation in Maputo

An abandoned eucalyptus plantation 30-kilometres from the centre of Maputo has been occupied in an organised way by people who are quickly building

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houses in a manner similar to the organised land occupations in Zimbabwe and Brazil.

The 1,230-hectare plantation 30-kilometres from of the centre of Maputo is on the EN1 just before Marracuene and was a FAO project FO-2 in the 1980s to grow woodfuel for Maputo; it was abandoned with other FAO projects during the war.

In 1998 there was a public tender and the land was given to a company called Milhulamente; although land cannot be sold, company spokesperson, Isidro Macaringue, said Milhulamente paid US$64,169 for the land.

Finally, in 2009 it obtained a DUAT which allowed 767-hectares to be divided into housing plots. After that, nothing happened.

But by now the rapidly growing city of Maputo has expanded past the plantation, and this is a valuable urban area.

In July a group of self-described “natives” of Marracuene occupied 200-hectares, used machinery to clear the land, quickly divided it into 40 metre by 20 metre plots, and began building both permanent and temporary houses.

There are new roads with cars; even the police now patrol the new neighbourhood and small temporary shops have opened.

On 15 August the local Marracuene court ruled the occupation illegal, and “construction embargoed” has been painted on the sides of some houses.

The land is now highly valuable – to whomever wins the right to occupy it, Milhulamente or the “natives”. Macaringue says that plots are already being sold for MT70,000.

And O País says the presence of expensive cars “suggests that the ‘natives’ are not just dividing up the land, but also selling it”.

Comment:

There is a myth, propagated in part by Zimbabwe President Robert Mugabe himself, that President Mugabe organised the Zimbabwe land occupation.

In fact, it was organised by the war veterans as a protest against Mugabe and a ZANU-PF elite because of their refusal to do land reform.

In a highly organised fashion the war veterans took over 1,000 white farms during the Easter weekend of 2000 and settled unemployed persons from the townships and landless from the communal areas.

Initially President Mugabe and the government opposed the occupation.

But President Mugabe is a skilled politician and later in the year when he saw the success of the occupation, he legalised it and took the credit.

And the media and opposition was happy to help him create the myth that he did it.


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CRIME

MAP 1: KIDNAPPING INCIDENTS IN CENTRAL MAPUTO 2014 – 2016

GRAPH 2: PUBLIC-MEDIA REPORTED KIDNAPPINGS PER YEAR

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GRAPH 3: TIME OF KIDNAPPINGS 2014 - 2016

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.

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PRM arrest man for foiled Sommerschield kidnap attempt

On Sunday 21 August, the Maputo PRM arrested a 30-year-old man (identified only as M. Naimo) on charges of attempted kidnapping.

The failed kidnapping attempt took place on Friday 19 August, in Sommerschield. The intended target (identified as Nampula born Abudul Satar Momed Anifa) managed to escape his would-be abductors.

The police are still searching for Naimo’s accomplices. No further details are available at this time.

Source: Folha de Maputo/O País/Jornal Notícias

PRM agent arrested for lending uniform to criminals

A PRM officer was recently detained in Mavalane district (Maputo Province) following accusations that he had lent out his uniform to a known criminal who engaged in residential and commercial robberies.

The officer, whose identity will not be revealed unless he is found guilty, denied lending his uniform to a criminal; however, he admitted to lending the uniform to a friend who was allegedly helping him patrol the neighbourhood.

Source: Folha de Maputo/@Verdade

PRM officer shot dead in Nampula

On Monday 22 August, two unidentified criminals shot and killed a PRM officer and seriously injured another in the city of Nampula.

The incident occurred at approximately 20:30hrs along Das Flores Street.

The motive behind the shooting is not yet known, as are the whereabouts of the two gunmen.

According to eyewitnesses, the two policemen were outside the local grocery store when the two gunmen approached them asking for help. When the officers responded, the two men withdrew their weapons and opened fire, shooting one of the officers in the head three times before fleeing the scene.

According to another eyewitness, the gunmen were armed with AK-47s.

Source: @Verdade

PRM officer accused of raping teenager

On Wednesday 24 August, a case of rape was opened against a police officer in the city of Inhambane.

According to reports, the incident occurred at approximately 19:00hrs on Wednesday when the officer accosted a young teenager in the company of a friend.

The officer subsequently ordered the victim’s friend to leave, at which point he proceeded to rape the young girl at gunpoint.

The victim immediately reported the incident to the local police station.

The police spokesperson of Inhambane Province confirmed the incident, condemning such behaviour as it tarnishes the institution’s reputation.

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The spokesperson assured the media that the officer will be exemplary punished.

The officer faces disciplinary action; however, it is not yet clear as to whether he has been taken into custody.


Former FADM officer accused of assault

A former military officer assigned to the FADM has been accused of impersonating a FIR agent in order to carry out an assault on a young couple in the Guava neighbourhood, Marracuene district (Maputo Province).

The former FADM solider has also been accused of attempting to rape his female victim.

The accused vehemently denies attempting to rape the woman, adding that the military uniforms found in his possession belong to him. As for the FIR uniform used during the commission of the crime, the accused could not provide a logical explanation as to how it came into his possession.

PRM spokesperson for Maputo, Emídio Mabunda, told the press that the man, dressed as a FIR officer, accosted the couple at approximately 22:00hrs and accompanied them to the nearest ATM, where he attempted to force them at gunpoint to withdraw money from their account.

However, the male victim managed to alert the police, who were mobilised to the scene and caught the perpetrator red-handed.

Source: @Verdade

Mob lynches man to death in Beira

On Saturday 20 August, the body of a 20-year-old man was discovered in Beira (Sofala Province). It is believed that the man was lynched to death by an angry mob after being accused of perpetrating armed attacks along the main road.

The incident occurred early in the morning, in the neighbourhood of Ponta-Gea. So far no eyewitnesses have come forward.

The body displays physical evidence of being lynched, and objects such as sticks were found near the body – suggesting that he was beaten in the process.

This is the 16th person to have been lynched in the area since January.

The media failed to ascertain the identity of the deceased, however, locals say that he has an extensive criminal record for robbery.

The administrator of Beira, João Oliveira, condemned the incident, arguing that no one is above the law.

Source: @Verdade

Domestic worker beaten to death in Maputo

On Wednesday 17 August, the body of a woman was discovered in the house where she worked as a maid in the neighbourhood of Zimpeto (Maputo Province).

According to the PRM, the woman was beaten to death by three unidentified individuals, armed with blunt objects.

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The police believe that the attackers entered the property at approximately 8:00hrs where they proceeded to physically assault the woman until she revealed the whereabouts of her employer’s valuables.

Once the attackers found what they were looking for they fled the scene, abandoning the woman, who subsequently died of her injuries.

The stolen goods were later recovered in the Boquisso neighbourhood.

Two suspects have since been arrested.

Source: @Verdade

Man lynched in Nacala

On Wednesday 24 August, an unidentified male was lynched by an angry mob in the Outupaia district, Nacala (Nampula Province).

The reason behind the lynching is not yet known, however, the vast majority of lynching victims in Mozambique were suspected of prior involvement in criminal activity.


Zimbabwe and Mozambique sign deal on prisoners

On Friday 19 August, Zimbabwe and Mozambique signed a Memorandum of Agreement (MoA) that will see prisoners from either country being repatriated to serve their jail sentences in their home country. Vice-President Emmerson Mnangagwa, who is in charge of Zimbabwe’s Justice, Legal and Parliamentary Affairs portfolio and Mozambique’s Minister of Justice, Constitutional and Religious Affairs,

Isaque Chande, signed the MoA establishing conditions for the transfer of inmates from one state to another.

Zimbabwe Prisons and Correctional Service Commissioner-General, Major General (Rtd) Paradzai Zimondi, and Mozambican General-Director for Penitentiary Service, Commissioner Eduardo Massanhane, signed a MoU for co-operation on rehabilitation of offenders, human resource development and exchange visits.

Speaking at the signing ceremony of the MoU and the MoA between the two countries, Vice-President Mnangagwa said that the event marked a positive development for both countries as it cemented their relations dating back to the liberation struggle.

“It is pleasing to note that the MoA’s objectives are aimed at establishing conditions and mechanisms for the transfer of sentenced inmates from one state to another, in order to ensure that they fulfil their sentences in their home state”, said Vice-President Mnangagwa.

“Whereas with regard to the MoU, the primary objective is to establish a framework for co-operation between the parties on how best to improve the standards of service within the Prisons and Correctional Institutions and ancillary matters”.

Vice-President Mnangagwa said that the transfer of inmates to their countries would facilitate better rehabilitation as they will be able receive visits from their relatives. On the other hand, he said that the MoU on co-operation would see the two countries having technical co-operation, education tours; and joint

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workshops, rehabilitation of offenders and any other mutual co-operation.

However, Vice-President Mnangagwa said that Zimbabweans were concerned with the developments in Mozambique where Renamo activities are threating peace and tranquillity.

“We are, however, happy and optimistic that the ongoing engagement and talks between the government of Mozambique and Renamo will bear fruit for the good of the people and the country’s socio-economic growth and development.

“This is the surest way towards guaranteeing peace and security, not only between our two countries but also in the SADC region and the African continent in general”, said Vice-President Mnangagwa.

Speaking through an interpreter, Minister Chande said that the signing of

the agreement was beneficial to the two countries. “We will work towards seeing that our prisoners serve their sentences in an environment that is closer to their families and as such, we are really grateful and satisfied.

“We are all aware that in both of our countries we have other nationals serving sentences. It is important to highlight that the numbers (of inmates from either country) are not so big. It is one thing that we are really happy about”, said Minister Chande.

Speaking on the Renamo insurgency, Minister Chande said his government is committed to restoring peace and stability. He said that there are positive signs that peace would be restored soon. Minister Chande returned to Mozambique on Saturday 20 August.

Source: The Herald

HUMAN RIGHTS, SOCIAL DEVELOPMENT AND NGO’S

Disaster agency prepared to face coming rainy season

On Friday 19 August, the Emergency Operational Centre (CENOE), the operational wing of the Mozambican relief agency, the National Disaster Management Institute (INGC), announced that it is prepared to face any possible disasters that may be brought about by the 2016/17 rainy season, which begins in October.

So far there are no forecasts for the next rainy season. The official forecast for Mozambique will only be announced in the first half of September, through the

Southern African Regional Climate Outlook Forum (SARCOF).

Speaking at a Maputo press conference after a CENOE meeting, the organisation’s spokesperson, Paulo Tomas, pointed out that the contingency plan for 2015/16 is still in force. The level of readiness, he said, “cold be updated taking into account what will be announced”.

He said CENOE already has human resources and equipment ready to respond in the event of any disaster. An analysis has been conducted of key institutions, and the actions that each

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sector could undertake during the rainy season. These institutions include the Health and Agriculture Ministries, the National Meteorology Institute, and the National Hydrography and Shipping Institute.

According to Tomas, six mobile bridges, other movable platforms and four boats are being imported to cope with possible damage to roads and bridges during the rainy season. “These metallic bridges can be used if roads are cut, or bridges swept away, allowing vehicles, people and goods to cross from one point to the other”, he added.

Tomas said that currently CENOE is distributing 4,000-tons of grain to approximately 600,000 victims of natural disasters (mainly the drought that struck much of southern and central Mozambique earlier this year).

The Health Ministry, he added, is continuing to monitor cases of malnutrition in drought-hit areas, particularly among women and children. So far there were no signs of any acute malnutrition, but greater attention should be paid to the central provinces of Manica and Tete.

Tomas announced that the Food and Nutritional Security Technical Secretariat (SETSAN) will co-ordinate a plan of assistance for 1.49-million people from September to November.

Between March and July, CENOE assisted approximately one-million people, distributing 13,000-tons of food in the southern provinces of Gaza, Inhambane and Maputo, and Sofala, Tete, Manica and Zambézia in the centre of the country.


German grant for food aid

The German government has made €1.2-million (approximately US$1.4-million) available to support households affected by drought in the southern province of Inhambane.

According to a German embassy press release, this sum will be managed by two non-governmental organisations, namely CARE and Welthungerhilfe (German Agrarian Action).

“The German government has provided CARE and Welthungerhilfe with €700,000 and €500,000, respectively, to support the neediest households in Inhambane”, announced the release.

It is estimated that 1.4-million people in Mozambique are in a state of food insecurity, and 43% of children suffer from chronic malnutrition.

“The population has no possibility of making savings for difficult periods or for preparing to deal with climate change”, added the release. “So the German government is also supporting projects that seek to respond better to climate change”.

Most of southern Africa was affected by severe drought this year, linked to the El Niño weather phenomenon, an anomalous warming of the surface waters in parts of the Pacific which disrupts world weather patterns. This was one of the worst El Niño droughts on record, and the increased frequency of such droughts may be an indicator of accelerating climate change. Source:

Agencia de Informacao de Moçambique

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President Nyusi open conference on women and gender

On Friday 19 August, President Filipe Nyusi said that women should acquire skills that allow them to make free, responsible and informed choices that contribute towards improving their own lives and those of future generations.

He also stressed the need to continue investing in women’s health, improving habits of individual and collective hygiene and dietary habits. He was speaking at the opening in Maputo of the Fifth National Conference on Women and Gender, attended by approximately 700 people. These conferences are held every two years.

President Nyusi recalled that at a recent SADC meeting he had warned that: “Nothing will be capable of conferring greater dignity on women, if we do not emancipate our own mentality and attitude towards women, and if women remain subservient to this form of domination”.

Mozambique, he added, faces “countless challenges” to guarantee that “boys and girls, and women and men benefit from the same opportunities”. Sustainable development, he stressed, “must be built jointly by women and men”.

The President said that gender equality and equity “will only be achieved when the natural differences between men and women are approached in such a way that, at the end of the day, the treatment of both women and men is just and equitable”.

He wanted to see a society “where our citizens, regardless of their gender, can

have the same opportunities to develop and attain their maximum potential”.

Key to this was the education of women. Despite the recent improvement in the enrolment of girls in primary and secondary education, many girls are still unable to complete their education, President Nyusi said, and there are high drop-out rates among girls in the country’s secondary schools, “due to certain incorrect social and cultural practices that we must fight against”.

This was the case with child marriages and early pregnancies. “We cannot continue to watch this situation passively”, said President Nyusi, “since it is placing constraints on the future of our society”. “If we want to speed up our human development indices, we must pay redoubled attention to the education and professional training of girls”, he insisted.

As part of the United Nations’ Sustainable Development Goals, Mozambique is now committed to taking the necessary measures, President Nyusi added, “to ensure than by 2030 women and girls benefit from equality of access to good quality education, to basic services and to political participation”.

Likewise, everything must be done, he said, “to guarantee that women and girls, particularly the most vulnerable, have equal rights to economic resources, to property, to inheritance and to financial services, including access to micro-finance, and rights to the land where they work and live”.


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Joint UN programme aims to empower over one million girls in Mozambique

“Before I entered the safe space, I was shy, and it was difficult for me to express myself. I spent my free time after school with vulnerable girlfriends my age who had left school to marry, and some were even pregnant”, 16-year-old Amelia Abadala Salimo told UNFPA. “I felt afraid to become one of them”.

Then last year, she joined UNFPA’s Action for Adolescent Girls initiative. At a safe space, she and other girls learned about life skills, entrepreneurship, leadership and human rights – including the right to live free of violence and child marriage. The girls also learned about sexual and reproductive health, and how their bodies and lives could be affected by early pregnancy.

“In the safe space, I felt empowered and understood, and I learned to express myself, and suddenly new doors opened”, Amelia said.

Today, she will be playing a key role in guiding other girls through similar sessions as part of the first joint UN programme to empower girls in Mozambique.

“Now”, she said, “I will be a mentor myself”.

Turning girls into leaders:

Girls in Mozambique face a wide range of challenges, including entrenched gender discrimination, harmful practices such as child marriage, widespread

gender-based violence and high rates of adolescent pregnancy.

According to a 2015 survey by the Health Ministry, 46% of girls aged 15 to 19 have been pregnant at least once. Child marriage and early pregnancy multiply the risks to girls’ health, increasing the likelihood that they will experience pregnancy complications such as obstetric fistula, or even die from pregnancy-related causes.

Pregnancy can also force girls to drop out of school, limiting their future potential. In Mozambique, girls’ primary school enrolment stands at 85%, but by secondary school, their enrolment drops to 18%, according to the 2015 State of World Population report.

The first joint UN programme on adolescent girls, called ‘Action for Girls and Young Women’s Sexual and Reproductive Health and Rights’, addresses these problems at the individual, community and policy levels.

With US$14-million from the government of Sweden, this four-year programme will build on UNFPA’s Action for Adolescent Girls initiative, bringing in the involvement of UNICEF, UN Women and UNESCO. Led by the government of Mozambique, the programme will include the participation of civil society, youth organisations, community and religious networks, and the media.

“The programme is a significant milestone towards more collective efforts towards the empowerment of Mozambique’s most vulnerable adolescent girls”, said Bettina Maas, UNFPA’s Representative in the country.

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Reaching one million girls:

The programme aims to reach more than one million girls in Zambézia and Nampula provinces, which have some of the country’s highest adolescent pregnancy rates, according to the 2015 government survey.

The launch, on 15 August in Nampula city, was attended by 830 mentors, who were carefully selected and trained to guide girls in sessions on life skills, human rights and other topics. The mentors are young, from 15 and 24, and live in the communities they serve, making them more effective role models and counsellors.

“I want to be a part of the change in my community – and also to break the silence of the harms happening to adolescent girls next door”, said Nilza Armando, a 19-year-old mentor, at the launch event.

Each mentor will reach 60 girls a year through the safe spaces. The campaign will be rapidly expanded, with more mentors trained throughout the year. Girls will also be reached through radio and television.

Working on every level:

The programme additionally works with communities to keep girls in school and to return out-of-school girls to the classroom. And it holds dialogues with parents, men and boys, helping whole communities to collectively embrace the importance of girls’ education and rights.

Forums will also be created at the local, provincial and national level, enabling girls to advocate on issues affecting them.

“I want to demonstrate to the most vulnerable adolescent girls in my community that a different path exists”, said Idris Jamal, a 13-year-old member of Mozambique’s Children’s Parliament. She will be a mentor to younger girls and will also spread her message of girls’ empowerment on the radio.

“Adolescent girls can be in school, pursue dreams, engage in sports, dance or play an instrument”, she said, “instead of marrying when still a child or becoming young mothers”.

Source: unfpa.org

WILDLIFE AND ENVIRONMENTAL PROTECTION

Conflict and drought threaten Mozambique's Gorongosa park

Passing through the aged faded gates into Gorongosa National Park, it's difficult to imagine you've just entered Mozambique's largest wildlife sanctuary.

Bled dry by a long civil war that ravaged Mozambique from 1976 to 1992, the

park has seen a remarkable turnaround in the last decade.

But even as it rises from the ashes, a fresh bout of conflict and a devastating drought threaten to undermine its revival.

Big mammals like elephants and buffalos are still rare in this 4,000

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square kilometre reserve, but a restoration project launched by American philanthropist Greg Carr in 2004 has seen the return of species once on the brink of extinction.

"Before the launch of this project, we were heading towards extinction”, Gorongosa conservation head Pedro Muagara told reporters.

"Now, in terms of reproduction, there are very positive signs. The numbers are growing”.

Today, the park has more than 72,000 animals from 20 different species, mainly antelopes and zebras.

But even as wild life returned to Gorongosa, political tensions were growing.

Since 2013, sporadic fighting has broken out between government forces and rebels from the main opposition, Renamo.

Refusing to accept the results of the 2014 national vote, Renamo leader Afonso Dhlakama has holed himself up in the mountains bordering the park.

For villagers fleeing the unrest, the unfenced Gorongosa has proved an easy refuge and food source.

Decked out in his khaki ranger's uniform, Muagara is one of the 150 armed rangers protecting animals from poachers and illegal hunters.

"With the fighting, the park has become a real target because the communities can no longer sustain themselves, so they hunt the animals instead”, he said.

Tourists scared:

An ongoing regional drought sparked by the El Niño weather phenomenon that has ravaged southern Africa for two years has also presented a new challenge, drying up several rivers in the park.

Animals desperate for water now congregate around the few remaining water sources, making them easy targets for poachers.

Faced with the unrelenting scourge of poaching, the park dedicates much of its rehabilitation programmes to educating local communities.

"We're trying to offer them alternatives, like farming options, for example”, Gorongosa Director of Human Development, Manuel Mutimucuio, told AFP.

At the end of the long track cutting through the thick forest is a glistening blue swimming pool at a luxury hotel completely renovated in 2012.

But today the facility stands empty, deserted by tourists frightened by the conflict. Only a few researchers remain in the luxurious rondavels.

In 2012, Gorongosa received 7,000 registered visitors. Today, even with the fighting confined to the park's extreme north, that number has plummeted to less than 1,000 – mostly expatriates living in the capital Maputo, and South African tourists better informed of the situation on the ground.

"Unfortunately, today we have just four tourists – everybody else here works either directly or indirectly for the park”, said hotel manager Paolo Matos, who

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took up the position just weeks before tensions escalated in 2013.

"We're losing a lot of money”.

With Gorongosa’s turnaround once again threatened, park employees want to believe in the promise of better days, drawing hope from ongoing peace talks between Renamo and the government.

"During the civil war, everything was destroyed and we rebuilt”, sighed Menesses Sousa, a park employee since 1974, before the war.

"But today it's starting again, and I don't what will happen”.

Source: AFP/Mail Online

Illegal logging on the rise in Tete

Illegal logging is on the rise in Tete Province and perpetrators are adopting increasingly sophisticated techniques to outsmart the authorities.

This is according to Castigo Gimo, the head of the provincial Association of Forest Operators, who emphasised the need to strengthen surveillance in targeted areas, as well as along public roads.

According to Gimo, the number of inspectors is insufficient as are government efforts to curb illegal logging activities as large areas continue to be targeted.

The Provincial Directorate of the Ministry Land, Environment and Rural Development, Damião Caliano, acknowledged that the province lacks inspectors.

However, Caliano said that, despite the difficulties, his team of 55 inspectors successfully managed to seize 10 illegal timber shipments and arrest seven people in the first six months of the year.


Involving communities in the fight against wildlife crime

Conservationists are not crying wolf – there really is a global wildlife crisis – and many animals will disappear from their natural habitats within our lifetimes.

Occasionally wildlife issues wrest the headlines from other crises and there are a few fleeting moments in the lime-light to make the case that protecting nature is not a luxury but essential for securing the future of the planet’s inhabitants – human and animal.

One such headline-making topic is wildlife crime. Estimates of the illegal trade in wildlife products for 2009 of as much as US$20-billion placed it fourth behind the trafficking of drugs, people and arms in terms of value for the criminal gangs and terrorists masterminding it. Wildlife crime is no peripheral issue; it leads to political, economic, social and environmental instability, undermines the rule of law, destroys human livelihoods, and lays waste to our natural heritage.

The plight of elephants is well documented and the international community is responding through the appropriate channels. The Convention on International Trade in Endangered Species of Fauna and Flora (CITES) established in 1973 regulates, monitors and, in some cases, prohibits international trade in animals and plants.

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The Convention on the Conservation of Migratory Species of Wild Animals (CMS) signed in 1979 aims to preserve those animals that cross borders on their annual migrations.

With the issues capable of attracting attention in the highest echelons of government and institutional architecture in place, why then does the problem persist? What are the missing ingredients for an effective solution?

What is needed is a more “bottom up” strategy where conservationists join forces with local people. Where such approaches are tried, they work. With communities on board, seeing tangible benefits for their local economy and environment, the tables can be turned on the poachers.

Crimes are no longer seen as minor transgressions. With local communities acting as advocates for conservation, pressure can be exerted on politicians to allocate resources to protecting wildlife, and on courts to start imposing penalties that are real deterrents.

Among those tangible benefits is secure and sustainable jobs. Wildlife tourism is a great money-spinner – from safaris to whale-watching – and generates significant foreign currency earnings and employs thousands of people.

The challenges are significant – those actually doing the dirty work receive only a fraction of the US$2,000 per kilogram that ivory commands as a finished product in Asian markets, but still a fortune for a poacher who sees no alternative offering similar rewards.

The experience of CMS indicates that the best approach is to involve local

communities, following the rules of engagement developed by the World Conservation Union’s Sustainable Livelihoods Specialist Group. CMS has financed projects based on the fundamental principles of ensuring that benefits accrue to the community (and that compensation is paid for loss of crops or livestock to predators) and that local stakeholders assume responsibility for implementing agreed measures.

One project bringing together all key governmental and civic stakeholders aimed at protecting the Cross River Gorilla, Africa’s rarest great ape found on the Cameroon-Nigeria border. Local inhabitants’ understanding of the need of using forest resources sustainably was enhanced through the establishment of ten “Village Forest Management Committees” to encourage participation in the management of the local environment.

As well as focusing on raising awareness of young people, the project also included training in alternative livelihoods such as beekeeping.

In Gourma, Mali, a project for protecting elephants built communities’ capacity to manage their resources effectively, one element being setting up vigilance networks where local people assume an active role in tackling poaching. Not only does this protect elephants, but it also provides employment to the young people in the community.

At their most recent Conference of the Parties (Quito, 2014), CMS Parties adopted the Central Asian Mammal Initiative, to conserve Saiga Antelopes, Argali Sheep and Snow Leopards.

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After the loss of 200,000 Saigas to a devastating disease last year, efforts to protect this species have to be redoubled, not least by combating poaching. Male Saigas’ horns are much prized in traditional medicine, but most illegal taking is done to satisfy local demand for the animals’ meat.

In the Ustjurt Ecosystem, home to the antelopes, the Association for the Conservation of the Biodiversity of Kazakhstan has equipped a yurt which tours the region and from which information material on sustainable livelihoods, business plans, employment opportunities and micro-loans is distributed.

In Tajikistan, CMS is working with the NGO, Panthera in the Pamir Mountains where five community-based conservancies have been set up for Snow Leopards, to address illegal trade and human-wildlife conflict.

Providing predator-proof corrals for herdsmen’s livestock has helped eliminate retaliatory killing of the cats.

We cannot turn Africa into a continent of beekeepers – that was a solution suitable for unique local circumstances; we can, however, devise innovative ideas that prevent local people from turning to poaching and convert them to the cause of conservation.

It is in the hearts and minds of people at the grass roots as much as with ministers in the corridors of power and poachers in the field that the battle against wildlife crime has to be fought – and won.

Source: National Geographic/Bradnee Chambers

Are South African rhino calves being exported to Thailand?

A permit appears to have been granted for eight South African rhino calves to be exported to a zoo in Thailand.

Earlier this month Allison Thompson of the organisation Outraged SA Citizens Against Poaching (OSCAP) posted online that she had received “credible information” of the “imminent export” of as many as 30 rhino calves to Thailand.

Speculating that the country was not, in fact, the intended final destination of the animals, she warned that they may end up being re-routed to China.

The exporter was identified as Manus Pretorius of a company called Mafunyane, which describes itself as an “international trader in quality wildlife”.

All of which raises a number of questions. Has a permit, in fact been issues, and if so, for how many animals? How ethical is it to sell off rhino calves in the middle of a major poaching crisis? Is it even legal to trade in live rhinos? And what about the people doing the exporting – what are their motivations?

According to a statement by Albi Modise, the Chief Director of Communications for the Department of Environmental Affairs (DEA), his department “does not issue export permits to private individuals as this is the mandate of Provincial Nature Conservation Authorities”, adding that “the applicant applied in the North West Department of Rural, Environment and Agricultural Development (READ) and READ will be able to confirm if the permit was issued”.

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Unfortunately, I (Andreas Wilson-Späth) have not been able to get confirmation that the North West Province READ has actually issued a permit.

South Africa’s white rhino population (along with that of Swaziland) is listed in Appendix II of CITES. According to CITES, international trade in species included in this appendix “may be authorised by the granting of an export permit”. Such a permit “should only be granted if the relevant authorities are satisfied that certain conditions are met, above all that trade will not be detrimental to the survival of the species in the wild”.

Pointing out that the DEA’s role is to ensure that all applications to export rhinos from South Africa meet the criteria outlined both by CITES and in the National Environmental Management: Biodiversity Act of 2004, Modise notes that: “this application met the criteria and the Department recommended the export of eight rhinos to a zoo in Thailand”.

He emphasises that “the purpose of the export (for release in a zoo as indicated on the permit application) was confirmed by the Thailand CITES Management Authority” and that “exports of live rhino is a legal activity in accordance with the CITES regulations and the Minister has, in addition to the CITES requirements, developed criteria for the export of rhino to ensure that the importing facilities are suitable and of appropriate destination”.

It would appear then that the export of these living rhino calves to Thailand is legal within the regulations of both CITES and the South African government.

The exporter, Manus Pretorius, who owns a private game reserve near Brits in the North West Province, is an established wildlife farmer, breeder and exporter. In 2003, he was in the news for planning to export five wild-caught elephants to zoos in Mexico in collaboration with the notorious late wildlife dealer Riccardo Ghizza who was convicted of physically abusing 30 baby elephants he had bought from the Tuli Game Reserve in Botswana and who had also been wanted for drug smuggling in Italy.

Ultimately, the question of whether the export of rhino calves is ethical remains. The answer, I would argue, depends on your perspective. The South African government is committed to a policy of so-called ‘sustainable utilisation’ when it comes to wildlife conservation. This implies that people have a right to exploit wild animals for profit. Supposedly some of this profit is intended to fund conservation measures.

Wildlife farmers, breeders and traders like Pretorius are obviously in agreement with this policy. They’ve built their businesses around it. When it comes to CITES, it’s worth remembering that it is not a conservation organisation, but, as its name indicates, a vehicle to facilitate trade in endangered species.

The key question for those of us who consider conservation to be a moral obligation we humans have with respect to our environment rather than as an opportunity for the market-driven extraction of financial profits from commodified wild animals, should be whether exporting rhino calves to Thailand will benefit the species in the wild.

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Neither Pretorius nor the North West Department of Rural, Environment and Agricultural Development could be

reached for comment at the time of publication. Source: News24/Andreas

Wilson-Späth

HEALTH

Mozambique to open first radiotherapy and nuclear medicine unit in 2017

On Sunday 21 August, it was announced that Mozambique is to get its first radiotherapy and nuclear medicine unit.

According to Gudi Morais, radiotherapist physician at Maputo Central Hospital, the new unit will open to the public between May and June 2017. The unit will be stationed in the premises of Maputo Central Hospital, the largest hospital in the country.

Simone Kodlulorich, who represented the Atomic Energy Agency during a recent visit to the site of the new unit, made a positive appraisal of the work

that is being done to ensure the safety of infrastructure and staff.

The project is budgeted at US$15-million and will benefit more than 300 patients a year.

To ensure the smooth running of the centre, the country has a team of 12 radiotherapists, physicians, physicists and technicians, of whom five are currently training abroad. These will be supported through 2018 by a team from the International Atomic Energy Agency.

Every year the Maputo Central Hospital records 700 new cases of cancer, of which only a small group benefits from radiotherapy treatment outside the country.

Source: O País

END

NOTICE

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to Mozambique (extinct in this country since 2013)

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