Parliament approves new Electricity Law

The Assembly of the Republic (the Mozambican parliament), on Thursday (01-08) approved, definitively and by consensus, the Electricity Law, a document that defines the general organisation and legal framework for electricity supply activities in the country. Speaking during the presentation of the justification for the proposed revision of the law, submitted to parliament by the government, Minister of Mineral Resources and Energy Carlos Zacarias explained that the change is based on number 04, of article 51, of the law, which deals with exceptional situations where different international rules are permitted.

review also aims to safeguard future projects that the country may develop in the energy sector and other similar projects, whose investors are from the electricity sector, some of whom are involved in previous projects.

“We have already developed projects under the old electricity law, but there are ongoing projects in the sector that must be assessed in light of international rules,” Zacarias noted.

The minister stated that creditors have been demanding changes, especially with regard to arbitration.

The amendment approved by parliament establishes that the parties may, by agreement, freely choose the forum for arbitration and the languages to be used in the arbitration process, provided that they are simultaneously translated into Portuguese.

Previously, the electricity law established that the arbitration forum would take place in Maputo, and always in Portuguese.

According to Zacarias, after approximately two years of implementation of the Electricity Law, now revised, the old provisions no longer proved viable for some international investment projects, given that “the forum is not considered impartial and the language is ineligible to conduct the arbitration process in the resolution of conflicts by international financial institutions”.

According to the minister, the creditors of the projects underway in the electricity sector demand that both the arbitration, as well as the language, and the choice of venue, be viable to facilitate international resolutions in the electricity field. “The creditors demand an impartial forum to resolve any disputes that may arise between the State and the concession holders,” he stressed. The 9th ordinary session of parliament ends next Thursday (08-08).

Mozambique Elections

The Democratic Alliance Coalition (CAD) today announced two peaceful demonstrations for Wednesday against its exclusion from the October 9 general elections, a source from the group told Lusa.

“We will hold two peaceful demonstrations on Wednesday, one at 12:00 and the other at 20:00. Every citizen should demonstrate wherever they are” against the exclusion of the CAD, and the “partisanship of the Constitutional Council”, said Luís Mariquel, national coordinator of communication and image of the CAD and assistant to Venâncio Mondlane, their presidential candidate.  According to the official, at the 12:00 demonstration people should “paint their hands black and hold them up high wherever they are” and at 20:00 they should gather in a local square “to light candles for five minutes”, symbolising the “death of justice and democracy in Mozambique”.

“This time we are not going to march – we want to avoid confusion. It will be a very peaceful demonstration,” Mariquel said, referencing episodes of violence recorded in some recent marches in the country.

“Let it be clear here that the central and northern provinces are simply waiting for the whistle to start blowing up the country, so this is [also] a way of damping people’s spirits down,” he added.

Thursday, the Mozambican Constitutional Council (CC) definitively excluded the CAD, which supports the presidential candidacy of Venâncio Mondlane, from the general elections of October 9. In the ruling, given in response to an appeal filed by the CAD regarding the exclusion of the candidacy previously decided by the National Electoral Commission (CNE), the CC declared null and void the CNE’s decision of May 9, which accepted the registration of the Democratic Alliance Coalition (CAD) for electoral purposes. On Sunday, Venâncio Mondlane called for demonstrations, asking his supporters to paint their hands black as a sign of the “funeral of justice and democracy”, and saying he would not back down, because he is “the people’s candidate”.

“I am a survivor, like many of us here,” Mondlane told supporters waiting for him at Maputo International Airport, where he landed after a tour of Europe.

On Friday, the CAD accused the CC of violating the Constitution, saying that the exclusion of their party from the October elections was political persecution for its support of Venâncio Mondlane’s candidacy. “We signed up and the decision was accepted and published in the Official Gazette. When they realised that Venâncio Mondlane’s candidacy was supported by the CAD, the problems began. That problem is political persecution,” president of CAD Manecas Daniel told reporters in Maputo. Mozambique will hold presidential elections on 9 October, simultaneously with legislative elections and elections for governors and provincial assemblies.

Nyusi inaugurates solar power station in Bazaruto

Mozambican President, Filipe Nyusi, inaugurated, on Thursday, a solar power station, in the Bazaruto archipelago in Inhassoro district, in the southern province of Inhambane. The power station, which was built as a result of the partnership between the publicly-owned electricity company, EDM, and the National Energy Fund (FUNAE), will enable over 400 connections to be made in the surrounding communities of Pangaia and Sithone. According to the President, the power plant will bring new dynamics to the tourist archipelago of Bazaruto and the local population will no longer face a lack of electricity.

“We celebrate the inauguration of this electricity connection in Bazaruto, using solar energy, which is considered to be cleaner and more environmentally friendly”, he said.

The solar energy network on the island of Bazaruto complements the electricity produced from natural gas, which only served tourist centers.

“These infrastructures are a demonstration of our unwavering will to bring development to every corner of our country”, said Nyusi. “Our community leaders have been patient, since we started in 2020 with the electrification programme for administrative posts. We are already at an advanced stage in this province”. He also said that, in the specific case of the Bazaruto Archipelago, the tourist resorts on Bazaruto, Nguessa, São Sebastião and Magarruque islands have benefited from an electricity network through independent generators powered by natural gas drawn from the gas fields in Panda and Temane, via an 86-kilometre underwater pipeline.

SERNIC claims to have identified masterminds of kidnappings

Mozambique’s National Criminal Investigation Service (SERNIC) claims to have identified the masterminds of the kidnappings that have been plaguing the country’s cities. According to Hilário Lole, the SERNIC spokesperson in Maputo city, cited by Radio Mozambique, the masterminds of the kidnappings are three Mozambican nationals who are living in South Africa. Lole explained that, in order to arrest them, the Mozambican authorities are working in close coordination with the International Police (INTERPOL).

“These are individuals we have already identified. International arrest warrants have already been issued because we have information that they are on South African territory. Work is being done with the forces of that country, in close coordination with INTERPOL, to facilitate their neutralization and subsequent accountability on Mozambican territory”, he said.

According to Lole, the Police are on the trail of the four armed individuals who kidnapped, on Monday, a 24 year old man, in broad daylight, in central Maputo. The victim is son of an Asian businessman.

According to eyewitnesses, the victim was forced to enter the car belonging to the kidnappers in the early hours of the morning, near the Hotel Términus.

Recently, the chairperson of the Mozambican Muhammadan Community, Salim Omar, said that the businesses of Asian origin no longer trust the police since they continue to be threatened by their tormentors. He also said that over 100 business people and their families have left the country due to the kidnappings that have struck Mozambican cities for 12 years.

According to the Strategic Analysis Report (RAE), published by the Mozambican Financial Intelligence Office (GIFiM), which is a specialist unit in the Ministry of Economy and Finance, the wave of kidnappings in the country have generated, since 2014, over 33 million dollars in money laundering. The document also said that this money was concealed in various accounts, held by the suspects, close relatives of the suspects and companies, controlled by the suspects and/or their close relatives, followed by the illicit export of capital under various pretexts with a view to concealing its criminal origin.

Materials seized in investigating alleged corruption at LAM

On Tuesday, the Central Office for Combating Corruption (GC) announced that the authorities in Mozambique had seized materials as part of their investigation into allegations of corruption at Mozambique Airlines (LAM).

“We have several suspects and some searches and seizures have been carried out. We’re still in the process of investigating the case, which we can’t detail here for reasons of secrecy,” said Romualdo Johnam, at a press conference to take stock of activities in the first half of this year in Maputo.   A case investigating alleged corruption schemes in the sale of tickets by the Mozambican airline and the management of the company’s fleet is at issue. The company’s fleet has been under restructuring since April 2023 as part of a plan by Fly Modern Ark, the company hired to recover LAM. In February, LAM’s restructuring director, Sérgio Matos, denounced a scheme to embezzle money, with losses of around €3 million in ticket shops through automatic payment terminal machines (TPA/POS) that do not belong to the company.

“[The tickets are] being sold, but the company isn’t getting all the money, and in the last three months of valuations, we’ve seen that the difference we were getting was in the order of between $2 million (€1.8 million) and $3 million (€2.7 million). In the month of December [2023] alone, we had a deficit of $3.2 million [€2.9 million],” Sérgio Matos noted at the time, adding that the inspection recorded suspicious cases even in the collection of cash in shops.

The inspection also identified anomalies when it came to fuelling aircraft.

“If an aircraft has a maximum fuel capacity of around 80,000 litres, we call it 80 tonnes, [in the documents] the same aircraft is being fuelled at 95 tonnes. So the question is where the remaining 15 tonnes are going,” he asked.  Following the reports of alleged corruption at LAM, the Institute for the Management of State Holdings (IGEPE), the entity that manages the state-owned business sector in Mozambique, announced that it wants to see the alleged embezzlement and acts of internal sabotage investigated and requested an investigation by the Public Prosecutor’s Office.

In January 2023, the GCCC opened case no. 06/11/P/GCCC/2023 to investigate allegations about fleet management, namely the sale of aircraft, their leasing, the company’s indebtedness for acquiring new equipment, and maintenance operations.  The process also concerns suppliers’ contracting, invoicing legitimacy, and the sale of the company’s corporate assets.  South African company Fly Modern Ark has managed LAM since April last year, and a restructuring plan is underway.

The company’s revitalisation strategy follows years of operational problems related to a reduced fleet and a lack of investment, with a record of some incidents, not fatal, associated by experts with poor aircraft maintenance.  In June of this year, the LAM Board of Directors chose Américo Muchanga, a former president of Mozambique Airports, as the company’s chairman.

LAM operates 12 destinations on the domestic market. At the regional level, it flies regularly to Johannesburg, Dar es Salaam, Harare, Lusaka, and Cape Town, and Lisbon is the only intercontinental destination..

Business activity PMI index in positive territory for three months

The business activity PMI index in Mozambique remained positive in July for the third consecutive month, signalling “ongoing growth in the country’s private sector”, according to Standard Bank, which conducted the survey released on Monday.

“Companies were able to generate further increases in sales, feeding through to rises in output, employment and purchasing activity. Cost pressures remained muted and companies kept their own selling prices broadly unchanged,” the study reads.

It adds, however, that “the outlook for activity over the coming year” was “less positive”, having “dropped to the weakest since October 2020”.

This index had risen in February (50.7 points), for the first time in five months, then also recording the highest growth since July 2023, but returned to negative territory in March (49.7 points), rising in April (49.9 points). It has been in positive territory since May (50.9 points), but fell in July to 50.6 points, compared to 51.0 points in June.  PMI indicators above 50 points point to an improvement in business conditions compared to the previous month, while indicators below this value show a deterioration.

“New orders increased for the sixth month running in July amid strengthening market demand and the securing of new customers. The rate of expansion eased to a three-month low, however. Likewise, business activity continued to grow at the beginning of the second half of the year, with companies reacting to the increase in the volume of new orders by expanding their production. Similarly, business activity continued to rise as the second half of the year got underway, with firms responding to higher new orders by expanding their output,” the report points out.

However, it is acknowledged that “the growth rate was moderate” in July, adding that the sector data ” indicated that the overall increase in activity was centred on the agriculture, manufacturing and wholesale & retail categories” and that companies “responded to higher new orders by expanding their workforce numbers and purchasing activity”.

“Employment rose for the sixth consecutive month. Despite being modest, the rate of job creation quickened to a level unsurpassed in just over a year. As with output, the agriculture, manufacturing and wholesale & retail sectors were the main sources of rising staffing levels,” it points out. Although “business expansion plans and expected growth of new orders supported confidence in the year-ahead outlook for business activity, sentiment dropped in July to the lowest since October 2020. Exactly 35% of panellists were optimistic in the outlook”.

Quoted in the study released yesterday, Standard Bank Mozambique’s chief economist, Fáusio Mussá, commented that the decline in this index, from June to July, “mostly reflects softer growth in output and new orders, compared with the previous month, and stocks of purchases slipping below the 50-level”.  “Notably, employment continued to rise for the sixth month running, as most sectors continued hiring,” Mussá also highlighted.

The Purchasing Managers Index (PMI) published monthly by Standard Bank is the result of responses from purchasing managers from a panel of around 400 private sector companies.

Cuamba will export more than 10,000 tons

THE district of Cuamba in Niassa expects to export more than 10,000 tons of pigeon peas to India this year.

This however represents a reduction of 6,000 tons compared to the previous campaign in which the district sold 17,000 tons of this crop to India, according to Radio Mozambique. 

The director of the District Services of Economic Activities in Cuamba, João de Almeida Júnior, points to the insufficient rainfall caused by the El Niño phenomenon as being the reason for the reduction in yield. He said that exporting pigeon peas to India brings gains in foreign exchange, partnerships, new opportunities and strengthens the economy of Mozambican families. In addition to pigeon peas, Cuamba district is currently also commercialising 2,000 tons of sesame and 1,800 tons of soybeans.

‘Peace Unity-2024’

Chinese Navy’s amphibious dock landing ship Qilianshan (Hull 985) arrived in the waters off Mozambique on the afternoon of August 2 local time. It will participate in the “Peace Unity-2024” joint exercise aiming at jointly safeguarding maritime security from August 6 to 8.

Participating troops from both China and Mozambique will conduct exercises on four subjects, including joint maritime patrols, visit, board, search and seizure (VBSS), maritime rescue, and anti-terrorism and anti-piracy.

On the morning of August 3, participating troops of Mozambique boarded the Chinese naval ship Qilianshan via a patrol boat for further consultations on the next step of the exercise. Prior to the exercise, the two sides conducted preliminary training and held discussions on operational command, tactical techniques, and other related matters.

It is learned that the Chinese naval ship Qilianshan, carrying a helicopter unit and participating troops, departed from Tanzania for Mozambique on the morning of July 29. During the voyage, it conducted exercises in preparation for the upcoming mission, including joint search and rescue operations, anti-terrorism and anti-piracy drills.

Mozambique: Reference rate to remain at 21.2%

The Mozambican Banking Association (AMB) announced on Friday that the reference interest rate for credit operations in Mozambique will remain at 21.2% in August, after six decreases since the beginning of the year. This rate, known as the “prime rate”, had been falling since 2018 until it reached a minimum of 15.5% in February 2021, when the trend reversed, and the rate began to rise until it reached 24.10% in July last year.

In January 2024, the rate returned to the values of April 2023 (23.5 %) after six consecutive months at highs of 24.10%, remaining unchanged in February by the AMB’s decision at 23.50%. It then fell in March to 23.10%, in April to 22.70%, in May to 22.30%, in June to 22%, and in July to 21.20%.

Increases in the prime rate are associated with the central bank raising the monetary policy interest rate (MIMO rate, which influences the formula for calculating the prime rate) to control inflation. The Monetary Policy Committee (CPMO) of the Bank of Mozambique decided on 31 July to lower the main MIMO interest rate from 15% to 14.25%, justifying it with the prospect of inflation remaining in single digits in the medium term.

“This decision is underpinned by the continued consolidation of the inflation outlook in single digits in the medium term, in a context where the uncertainties associated with the projections remain favourable,” said the governor of the Bank of Mozambique during the presentation of the measures taken by the CPMO. The central bank and AMB agreed in 2017 to create the prime rate to eliminate the proliferation of reference rates on the cost of money.

At the time, it was launched with a value of 27.75%.

The promoters explained that the aim is for all credit operations to be based on a single rate, plus a margin (“spread”), which will be added to or subtracted from the “prime rate” by analysing the risk of each contract.

Money returned by Chang is deposited in the Bank of Mozambique

The Bank of Mozambique has been keeping the approximately US$7 million returned by Manuel Chang “for a long time”, said he central bank governor yesterday. Speaking at a press conference in the central bank’s Maputo headquarters, Rogério Zandamela maintained that it is time to celebrate the decision of the London Court rather than anticipating the more than US$2 billion yet to come. The announcement of more than US$2 billion in favour of Mozambique in the London court ruling on the ‘hidden debts’ case is good news and should be celebrated, Bank of Mozambique governor Rogério Zandamela says.

Zandamela distances himself from those who think that the money will never enter the coffers of the Mozambican state. “This is the time to celebrate, to hope that everything goes well. Nothing is easy. A country does not develop by easy things,” he said.

Regarding the benefits of the funds that could be channelled to the country, Zandamela explains: “We will celebrate with faith that this money will come in. We have to be proud of what we have achieved. We have to stop this idea that good things happen to people and bad things happen because we are incompetent. Good things are the result of effort.”

Zandamela confirmed that Mozambique received the money returned by Manuel Chang and says it is in the central bank’s custody. “It has been with us for a long time, a long time, twoyears,  three? It was before Covid. Until the prosecutor’s office and the courts decide, we are the custodians of this amount,” he explained. When asked about other amounts that may have been returned by the defendants in the context of undeclared debts, Rogério Zandamela offered no comment.

READ: Mozambique: Country expects to receive $1.9B after London ‘hidden debts’ ruling – PGR

‘Hidden Debts’: Prinvest should pay Mozambique 2.3 billion dollars – AIM report

Mozambique: Justice has $7 million returned by Manuel Chang, under PGR custody – Watch

Cabinet approves resolution on African Continental Free Trade Area

Mozambique’s government approved on Tuesday the resolution on Mozambique’s Tariff Offer for the Implementation of the Agreement creating the African Continental Free Trade Area (AfCFTA) and the national strategy for its implementation. The decision was taken by the cabinet, which met today in Maputo for its 24th Ordinary Session, according to a final communiqué that explains that the two resolutions will allow Mozambique to “access the AfCFTA Adjustment Fund”.

The fund “aims to assist States Parties implement the AfCFTA agreement, to limit possible negative impacts that may result from the implementation of the agreement,” the communiqué said. It will also allow Mozambique to start using the Pan-African Payment and Settlement System (PAPSS), “which will be made available jointly” by the African Export-Import Bank (Afreximbank) and the AfCFTA Secretariat, “to be used by African companies in intra-African commercial transactions”.

He added that Mozambique will “be part of the Guided Intra-African Trade Initiative for Goods”, which “aims to create real opportunities in Africa through economic operators from countries that have already submitted their tariff offers and are carrying out commercial transactions”, in this case in value chains such as ceramic tiles, batteries, vegetables, avocados, flowers, pharmaceuticals, palm oil, tea, rubber and air conditioning components. The secretary general of the African Continental Free Trade Area (AfCFTA), Wamkele Mene, said in Nassau on June 13 that despite the progress made, it would take time to fully implement intra-African trade.

“We did something that was a vision, and now it’s becoming a reality. What we are doing is establishing an integrated market, which has been a long-standing vision of African leaders,” said Wamkele Mene, speaking at the Annual Meetings of the African Export-Import Bank (AAM2024) and the 3rd Afro-Caribbean Trade and Investment Forum (ACTIF2024). In his speech, Mene emphasised the significant progress already made but warned of the importance of the political will of African leaders.

“We are on the right track in terms of building the legal basis that positions the continent to be a common market. The second important aspect is political will and commitment,” he said. Launched in 2018 and approved a year later, the African free trade agreement came into force at the beginning of 2021 and covers a market with more than 1.3 billion consumers.

The African Union estimates that its barrier-free realisation could increase trade growth by at least 53% and potentially double intra-African trade, lifting 30 million Africans out of extreme poverty and increasing the incomes of almost 68 million others. According to the World Bank, the continent’s Gross Domestic Product (GDP) could grow by $450 billion (around €420 billion) by 2035. The treaty eliminates customs duties on 97% of goods traded between African countries, liberalises trade in services, and improves regulatory and trade infrastructures.

Intra-African exports represent around 16% of African countries’ foreign trade, compared to 55% for Asia, 49% for North America and 63% for the European Union (EU). Despite this, 47 of the 54 members of the African Union have ratified the agreement, committing themselves to eliminating trade barriers and strengthening economic integration. Seven countries – Benin, Liberia, Libya, Madagascar, Somalia, South Sudan and Sudan – have yet to ratify it and Eritrea still doesn’t agree with the creation of the AfCFTA.

 

Terrorists expel residents of some villages

The self-styled “Islamic State” terrorist group invaded last Wednesday, the villages of Marere, Calugo and Ulo, in Mocímboa da Praia district, in the northern Mozambican Province of Cabo Delgado, warning the local residents to leave their homes, according to a report in Monday’s issue of the independent newsheet
“Carta de Moçambique.”

According to sources cited by the paper, the terrorists said they did not want to see anyone, which means

the population had to leave the villages.

“The population in the south of the district had abandoned their villages for fear of the terrorists and of being mistaken for insurgents, since joint forces operations are underway”, said Sifa Saíde, a resident of the Aeroporto neighbourhood in Mocimboa da Praia town

Two weeks ago, the terrorist group claimed, through its propaganda channels, to have murdered 11 people, whom it described as “Christians”, in Mocimboa da Praia district.

The defence Minister, Cristóvão Chume, declared on Friday that the eradication of terrorism from Cabo Delgado demands community empowerment, and reduction in poverty and illiteracy.

He also said that governing in favour of the well-being of the population can help stop the spread of terrorist actions on the African continent, including in Cabo Delgado.

 

Three Muslims run for Municipal President

 

Four district administrators were dismissed , “as part of the ongoing movement of public administration staff in the country”, according to  a statement from the Ministry of Public Administration and Civil Service issued on Friday (September 29).

The press release states Shafee Sidat was dsimissed from the position of  administrator of Marracuene in Maputo province; Momade Ali as district administrator of Ilha de Moçambique district and Rui Chong Saw as district administrator of Mossuril district, both in Nampula province; and Issa Tarmamade as administrator of Ibo district in Cabo Delgado. On Thursday, Mozambican president dismissed Cecília Chamutota as deputy minister of Public Works, Housing and Water Resources, appointing her Secretary of State for Sofala province, in central Mozambique, in place of Stela Pinto Novo Zeca, who was dismissed from the post on Tuesday. Stela Pinto Novo Zeca is the Frelimo candidate for mayor of the city of Beira in the municipal elections on October 11th.

Ahmad Shafee Ismail Sidat, Momade Amisse Ali, Rui Chong Saw and Issa Tarmamade are also Frelimo candidates in the October 11 elections – for mayors of Marracuene, Ilha de Moçambique, Mossuril and Ibo municipalities, respectively.

 

Saudi company to produce feed and fertilizer in Chókwè

The Saudi company Jampur Mozambique, Lda, operating in Chókwè district, in the southern province of Gaza, will produce feed to meet demand from the poultry industry and aquaculture, as part of a series of new projects it is introducing to make better use of by-products from the processing of rice, tomatoes and cashew nuts. Jampur has taken control of the Chókwè Agro-Industrial Complex (CAIC), which was once a gigantic state farm.

According to Monday’s issue of the Maputo daily “Notícias”, the company’s focus was on seeking market guarantees for locally produced rice, but now the businessmen of the Jampur Group want to broaden the range of investments to other projects, which include a production line for fish and poultry feed, fertilisers and supplements to improve the robustness of cattle. The expectation of this business group is to reduce dependence on imports to satisfy the local market for poultry and fish. In addition to food production and marketing, Jampur has other projects in the pipeline, namely the establishment of an industry to produce footwear and uniforms.

According to the Chairman of the Board of Directors of the Jampur Group, Mohammad Shafiq, at this embryonic stage of its operations in CAIC, attention is being focused on processing and marketing. He said, without giving specific figures, that there is investment in the pipeline for a range of structuring projects in the value chain of products aimed at domestic consumption and also for export.

“We are also interested in investing in the production of poultry, fertilisers and uniforms, all here in Chókwè district,” he said.

The revival of the Chókwè Agro-Industrial Complex is the result of the National Programme to Industrialise Mozambique (PRONAI), launched in 2021 by President Filipe Nyusi, with the aim of contributing to an increase in production, stimulating agro-processing, reducing the export of raw materials and generating employment and income for the family sector. According to the governor of Gaza, Margarida Mapandzene Chongo, this is the first major step that the province has taken in agro-processing and agro-business in the light of the national industrialisation programme. She said that foreign researchers had been approached during the recent presidential visit to Abu Dhabi in the United Arab Emirates, which included a delegation from the Gaza Provincial Executive Council, to relaunch the portfolio of anchor projects for the Limpopo Valley production area. She emphasised that the arrival of the investors in CAIC is an added value for boosting the province’s economy and creating more job opportunities, especially for young graduates in various areas of technical and vocational education, but also for valuing the efforts of producers who have been complaining about the lack of a market for their produce.

“Work has already begun. As they are foreign investors, there is a lot of bureaucracy in the initial procedures so that they can carry out their activities to the full, but they are very confident in the collaboration of the central government and we locally have been doing our part to make this project a reality”, she said.

 

 

Gains $500mn+ secret debt cancellation

Mozambique on Monday announced a negotiated deal with the major Swiss Bank UBS. It took over Credit Suisse after CS collapsed under a series of corruption scandals including the Mozambique secret debt. This ends only part of the case about the secret debt in the commercial count in London.

Economy and Finance Minister Max Tonela and Deputy Attorney General Angelo Matusse told a press conference on Monday that the negotiation in London resolves a large part of the Credit Suisse loan. They refused to give details, but we estimate that more than $500 mn of the secret debt has been cancelled, which is a major victory for Mozambique.

The $2 bn secret debt was borrowed by three companies owned by the government, including the security services SISE. Initially in 2013 and 2014 $622 mn was borrowed by Proindicus, $535 mn by MAM, and $800 by Ematum. Of the Proindicus loan, $118 was lent by the Russian bank VTB and the rest by Credit Suisse, which in turn syndicated some of the loans (that is, sold the loans) to investment funds.

In case of dispute, these loans are all adjudicated in the London Commercial Court, and in 2009 legal cases were brought by Mozambique, by Privinvest, and by lenders. Prininvest is the company which received all the money, allegedly for projects in Mozambique, and which is accused of bribery and over-invoicing. What is common in such proceedings in London is that the courts rule on points of law, and then the parties often negotiate a deal in secret.

With accrued interest payments and penalties, the Proindicus loan is now probably around $900 mn. The trial is due to start today in London, but UBS and Mozambique have removed most of the Proinidicus loan from the case and announced a deal this Monday morning. VTB and BCP (Banco Comerical Portuguese) are not part of the deal and are continuing with the court case. The exact deal remains secret because of the syndicated loans, but all banks and funds except BCP have accepted what is called a “haircut”. The Mozambican government has agreed to pay a small part of the syndicated loans and the banks and funds accepted a substantial loss. Thus I estimate that more than $500 mn in debt has been cancelled. Cancelling more than half the Proindicus debt seems a good deal for Mozambique. The press conference was told that Mozambique’s legal costs so far are $80 mn and will continue to rise as the trial resumes. In London Privinnvest has appealed a ruling which said that as President, Filipe Nyusi cannot be called as a witness. But it seems likely that as the court case proceeds and the evidence is laid out, other deals will be done.

 

 

Settlement with UBS was approved

The extrajudicial agreement between Mozambique and the financial group UBS on the “hidden debts” case in the British courts was approved by the Council of Ministers in June, the Mozambique Government Gazette Boletim da República dated 14 September indicates. The Supplement to the Boletim da República dated September 14, consulted on Monday by Lusa, ratifies the ‘Transaction Agreement’ signed between the Republic of Mozambique, the state-owned company Proindicus, the Credit Suisse Group and other litigants in accordance with a resolution approved by the Council of Ministers [Cabinet] on June 6th.

READ: UBS nears settlement with Mozambique govt in Credit Suisse $1.5 billion tuna bond case: Report

“The purpose of the Transaction Agreement is the global and definitive resolution of the dispute between the parties referred to in the previous article and the total and reciprocal waiver of their claims, in the dispute, in the case of the disputing parties, and outside of it, in the case of the non-litigating parties, regarding responsibilities in financing Proindicus,” the document states. 

In addition to Credit Suisse, currently part of the UBS financial group, Moza Banco, United Bank for Africa, investment funds VR Global Partners and Farallon Capital, as well as Banco Internacional de Moçambique, Banco Comercial de Investimentos and other institutions signed the agreement. However, the shipping group Privinvest, the Russian bank VTB and Banco Comercial Português (BCP) were specifically omitted from the agreement. “This deal appears to have been in the works and cooked up [over] some time,” Privinvest lawyer Duncan Mathews told the London High Court in London on Monday.

READ:  Mozambique: UBS Group reaches agreement on eve of hidden debt trial

Sunday’s settlement, struck one day before a blockbuster London trial was due to begin, prompted scores of lawyers representing Mozambique, Credit Suisse, Privinvest, three former Credit Suisse bankers, creditors and others, to gather in the High Court in London to establish how the trial should now proceed. Judge Robin Knowles said there was an imperative to ensure the three-month trial o “complicated and interwoven multi-party case” was fair to all parties and postponed the opening of the trial to at least Oct. 16. Duncan Matthews, for Privinvest, told the court that the settlement had created a “significant shift” in the burden on his clients and that they should have time to work out which claims and cross-claims remained on the table. He also noted that it was “not quite clear” whether Mozambique’s claims against three former Credit Suisse bankers had also been settled or put on hold.

READ:  London trial delayed until at least Oct. 16 as Mozambique switches focus to Privinvest in ‘tuna bond’ case

The trial is the culmination of almost four years of litigation in the British courts, to which Mozambique appealed, alleging bribery, conspiracy to harm by unlawful means and dishonest assistance to write off debts and claim financial compensation worth millions of dollars.

US$0.55 per kilogram

The official price for a kilogram of cashew nuts in Mozambique fell from 37 meticais (58 US dollar cents) to 35 meticais (55 cents) for the 2023-2024 marketing year, the committee responsible for regulating the sector has announced. The deputy minister of Agriculture and Rural Development, Olegário Banze, quoted today by Notícias, the country’s largest daily, said that the fixed price guarantees “balance throughout the nut production chain so that there are no segments [especially] harmed”.

“In order for prices not to be always dictated from the outside, it is necessary to create a more robust scenario internally that allows the national market to impose its prices, which involves increasing production and guaranteeing the processing of cashew nuts at a domestic level,” Banze emphasised. Cashew nut production is a source of income for thousands of families in Mozambique, mainly in the north of the country. According to AIM news agency, India and Vietnam are currently Mozambique’s main export destinations for cashews, and, therefore have the greatest influence on prices in the market.

                          

Balama graphite

Syrah Resources said Monday it has completed a production campaign at its Balama

operation in Mozambique, with natural graphite shipped during the September 2023 quarter. The announcement comes as the company says an Australian article on Sunday “incorrectly” stated that Syrah continues to mine and stockpile rather than sell output from Balama. Promising further details on 17 October, the company noted it has seen “increased anode production in China and improved natural graphite demand recently”.

Syrah Resources Limited (ASX:SYR) (“Syrah” or “Company”) notes that the Australian Financial Review published an article on Sunday, 1 October 2023, which incorrectly stated that the Company “continues to mine and stockpile rather than sell output”.

A production campaign has been undertaken at Syrah’s Balama Graphite Operation in Mozambique (“Balama”), and natural graphite sales and shipments were completed, during the September 2023 quarter. Ongoing strength in global electric vehicle sales has seen increased anode production in China and improved natural graphite demand recently. Further information on Balama production, as well as natural graphite sales and shipments, will be released with the Company’s September 2023 Quarterly Activities Report on Tuesday, 17 October 2023

Parliament passes revision of Law on Prevention and Combat of Money

The Assembly of the Republic this Thursday (10-08) voted in favour, in general and by consensus, on the revised Law on Prevention and Combat of Money Laundering and Financing of Terrorism.The revision aims to adapt and accommodate the recommendations of the Post-Observation Period Report by the International Co-operation Review Group (ICRG) of the Financial Action Task Force (FATF), and conform Mozambican legislation on the regime for preventing and combating money laundering, financing of terrorism, and financing of the proliferation of weapons of mass destruction.

Natural and legal persons, legal persons without legal personality, non-profit organisations, financial institutions and non-financial entities with headquarters in the national territory are now obliged to adopt measures to prevent and combat money laundering. The measures will now also cover non-financial entities, natural and legal persons engaged in real estate brokerage and the purchase and resale ofproperties, as well as construction entities that directly sell properties. Lawyers and all those who exercise functions of legal sponsorship and legal assistance, notaries, conservatory officials, accountants and independent auditors, when involved in transactions in the interest of their users or in other circumstances, are also covered. Service providers to trust funds and companies now also become non-financial entities obliged to adopt measures to prevent and combat money laundering.

Non-profit organisations, including non-governmental organisations and churches, must now keep records of operations relating to donations and other contributions from national and international entities for a minimum period of five years. According to the amendments voted for favourably in parliament, such records must be sufficiently detailed to allow verification that the funds received by these entities were used in accordance with the purpose of the organisation, which must make these records available to the competent authorities when requested. Another innovation of the law in question is that donations or other financial contributions to non-profit organisations must be made through bank transfer to an account opened in the name of the organisation or by cheque, with the necessary exceptions in the terms to be regulated.

Under to the revised law, engaging in money laundering crimes can engender a fine of up to 10 million meticais. In its reasoning, the government explains that legal persons and equivalent entities will be subject to a fine ranging from two to ten million meticais if the crime is committed within the scope of the activity of a financial institution. According to the same proposal, fines will also range from one million to five million meticais if the crime is committed through the activity of a non-financial entity.

 

China lifts bans on group tours to

 China on Thursday included Mozambique, Equatorial Guinea, Cape Verde and São Tomé and Príncipe in a third batch of destinations to which it will allow group tourism travel. The decision, announced by the Ministry of Tourism and Culture of the Asian country, covers a total of 82 countries, in addition to the 40 included in the first two batches.

Destinations popular among international travellers, such as the United States and United Kingdom, are now available again for Chinese tourists travelling in organised groups.

In early February, Beijing again allowed group tours to about 20 countries, including destinations such as Thailand or Indonesia.

Portugal was included in the second batch, approved the following month, as well as Brazil, France and Spain.

China, which was the largest source of tourists in the world until the outbreak of the Covid-19 pandemic, kept its borders closed for almost three years as part of its “zero Covid” policy, which was abandoned last December after protests in several cities across the country.

 

AFRICA

 

The height of indecency

Indecency has phases. 

In the first, the notion of priorities is lost. This happens when it becomes more important to show that something is being done. You lose concern about what is still not well and needs attention because for millions of young people it is a matter of life or death. A deputy doesn't need to go very far to see that. As you leave the Assembly building, you see the drama of survival.

In the second phase, a lot of energy is invested in the superfluous. It is not, contrary to what many people think, lick-botism. It is a sincere attitude that manifests itself without the expectation of personal gain. The person loses track of what is important. Scouring dictionaries looking for adjectives becomes more important than investing time to understand a subject that, handled well, can change people's lives for the better. This would entail reading, talking to experts, listening to those affected, etc.

In the third, an identity is created that has nothing to do with the reason that led an individual to a certain place. Thus, the person is more concerned with asserting himself as the deputy who makes everyone laugh with his eulogies to the president. Without realizing it, he begins to give more importance to this than to his own work. It becomes more serious not to make this kind of speech than to question the rulers. The person gets silly at the party.

In the fourth, and last, the person believes that what he does is funny. He doesn't do it anymore because he wanted to show that despite everything there is work being done. He does it because he thinks it's funny, a lot of it. What they fail to realize is that making jokes in the parliament of a country where millions of people go to bed - if they have a bed and shelter - without eating is an affront to the values ​​of their own party, society and, of course, their own family. .

Now, the height of indecency is when colleagues join in the laughter, clap loudly and show no sign of embarrassment. That's where you realize that the mozes are orphans of government.

And to make matters worse, not a single decent person in this party and government has publicly and loudly distanced themselves. Maybe it's because they know that it's aimed at decent people so that they know once and for all that boçalismo rules.

(E.Macamo in facebook)

Mozambique sends fuel to malawi

The Mozambican government is sending aid of 40,000 litres of fuel to Malawi, in response to the appeal launched by Malawian President Lazarus Chakwera, following the passage of tropical cyclone Freddy, which devastated southern Malawi, killing at least 438 people.The fuel will be delivered officially by the Mozambican High Commissioner in Malawi, Elias Zimba, in representation of President Filipe Nyusi.

According to Radio Mozambique, the fuel will be used in search and rescue operations in parts of Malawi flooded by the cyclone. 238 people are still listed as missing, and more than 345,000 people have lost their homes.

For Zimba, Nyusi’s gesture shows the brotherhood and friendship between African peoples, who, at times of catastrophe, need to unite their efforts to reduce the impact of natural disasters.Mozambique has thus joined Tanzania, which has disbursed a million US dollars, and made two military helicopters and 100 soldiers available to support rescue operations and humanitarian assistance in Malawi.

Malawi has also requested air support from Mozambique and Zambia for the search and rescue work. The Malawian government says that, with the improvement in the weather, it has become possible to use aircraft in the relief operations, but the country is desperately short of planes and helicopters – hence the appeal to neighbouring countries.

Civil society organisations want to destroy FRELIMO

Mozambican President Filipe Nyusi, speaking in his capacity as leader of the ruling Frelimo Party, on Thursday claimed that some of the country’s civil society organisations want to destroy Frelimo. Addressing a meeting in the southern city of Matola of the Frelimo disciplinary body, the Verification Commission, Nyusi said there are “intruders” in the party who want to weaken it and drag its name through the mud. He urged Frelimo members to be vigilant against all those who want to wreck the party. He called for cohesion among the membership as the only way to face challenges imposed by the forces acting against the Party.

“The Frelimo Party is operating in a world of intense political competition”, said Nyusi. “So we are called upon to perfect our methods of work in order to confront the forces that are opposed to our designs”. He warned that Frelimo’s opponents have been strengthening their methods of operation, “seeking to subvert the Party’s guidelines”.

 “Just as in the past, the main target of our adversaries is to destroy the unity and discipline of our Party”, Nyusi declared. “Tribalism, regionalism and other forms of discrimination are among the means invoked by some elements, inside or outside the party, to cover up their ambition for power, or to satisfy personal or group interests”. He stressed that Frelimo needs to reorganize itself to face the challenges of the municipal elections scheduled for October.

“This is a moment of extreme importance in the national political cycle”, Nyusi said. “Our Party has the challenge of maintaining the governance of the 44 municipalities currently under our rule, of recovering the nine that are currently run by the opposition, and of winning in the 12 new municipalities”.

He warned that such a victory can only be won on the basis of “transparency, responsibility, justice and integrity”. Above all, the Party must ensure that its election candidates are capable of attracting the support of the voters “for an overwhelming Frelimo victory”. Nyusi urged the Verification Commission to fight against corruption inside Frelimo, and in public institutions. The Commission, he said, must guarantee strict compliance with the Frelimo statutes.