Monday, February 29, 2016
The final blow in Renamo
Thursday, February 25, 2016
After Mozambique’s spending, the reckoning
President Nyusi has inherited
a poisoned chalice: he now has to cut spending, deal with the IMF and manage an
elite grown fat through patronage politics.In March, Mozambique will have to
repay another $100m tranche of an opaque and roundly criticised bond deal. The
money could have been used to build four hospitals. Instead, it will repay a
wildly overinflated contract for tuna-fishing boats. In the words of the
country’s former prime minister Luísa Diogo: “Something has gone wrong.”Back in
2007, Mozambique was feted in ballrooms and boardrooms. Bankers pointed to
stellar growth rates and the sound macroeconomic management that had led the
fastest turnaround of a post-conflict country since Vietnam. Former president
Joaquim Chissano won the inaugural Mo Ibrahim Prize for good governance that
year.Today, it seems like a rerun of Africa in the 1980s: rising debt, a
pile-up of white elephant projects, murky finances and a balance-of-payments
crunch requiring an International Monetary Fund (IMF) bailout.
Capital spending rose and was
covered by foreign debt. Funding gaps for the recurrent budget were financed on
domestic markets, and domestic debt rose 28% per year between 2001 and 2013 to
Mt30bn ($1bn).By 2015, sovereign debt had risen more than 200% since
Mozambique’s international debt relief in 2000, including a 53% increase in the
last two years Guebuza was in office.Debt will continue to rise as projects are
implemented and to finance government expenditure, including a budget deficit
of $1.1bn in 2015, or about 6.5% of gross domestic product (GDP). By 2020, debt
is projected to double again to more than $16bn.With debt markets drying up,
this leaves little wriggle room for Mozambique’s financial planners. Various
shades of austerity loom. According to Standard and Poor’s analyst Gardner
Rusike, Mozambique’s case is not entirely unusual: “A number of African
countries that had fast-paced growth also have expanded fiscal positions and
higher debt to GDP ratios – this has not led to greater creditworthiness.”Under
Guebuza, Mozambique became a country that could increase state spending, pay
higher wages and develop prestige projects that appeal to national pride.
However, the government also discarded the difficult market reforms and
macroeconomic stability that were the basis for growth in the post-civil-war
period.The government halted privatisations and encouraged poorly performing
parastatal companies to assume ambitious nation-building roles. These companies
now run substantial losses and are a growing drain on public finances. This was
made possible, according to Fernando Lima, the publisher of independent
newspaper Savana, “by the belief that resource riches through gas and coal were
imminent and that we should not be afraid to take on debt.”
Questions over a lack of
transparency and alleged irregularities include that it was negotiated in
secret outside of normal government channels – neither parliament or cabinet
were informed – and with the involvement of close associates and family of
former president Guebuza.The bond has had disastrous consequences. Ematum is
unviable as a company and cannot service its debts, which have been taken on as
a public liability. With that move, Mozambique’s annual debt-service bill
doubled overnight to $400m. Some donors ended budget support entirely or cut
aid over concerns about corruption and fiscal irresponsibility.The government
is in talks on restructuring the loan, something Standard and Poor’s Rusike
says would “mean a commercial default”. The ratings agency downgraded Mozambique
in July and assigned a negative outlook, with an Ematum default being a
possible catalyst for a further downgrade.The consequences of a credit binge
and years of ignoring macroeconomic advice came together in the last quarter of
2015 in an economic crisis that has still to reach its peak. In October, the
authorities were forced to turn to the IMF for a $284m bailout package.Balance
of payments problems were worsened by a first, $100m, payment to Ematum
bondholders in September and another is due in March. Falling foreign reserves
and foreign exchange scarcity have led to a currency crash, including a 21%
fall for the metical against the US dollar in one week in late November when
the central bank was said to have temporarily run out of dollars.
90% of Mozambicans prefer Mother Language to Portuguese
Mozambicans enter ranking
Mozambicans are among the five
biggest spenders at tax free shops in Portugal, according to a report published
yesterday in Portuguese newspaper Publico. Visitors from Mozambique spend on
average 227 Euros, behind only Angolans, Brazilian, Chinese and American
tourists.In 2015, Chinese tourists spent 641 Euros per head on purchases – the
most among non-European visitors. According to Global Blue, a company that
manages tax-free operations, the Chinese are the third most important
nationality when it comes to increases in retail and tourism spending. In 2011,
for example, the average purchase of these visitors amounted to 560 Euros well
above cruise ship passengers arriving in Lisbon in 2014, at 193.49 Euros.With
regard to the tax-free shopping, the Chinese represent 14 percent, behind
Angola (43 percent) and Brazil (16 percent).Compared with 2014, the number of
transactions grew 73 percent and the total amount spent rose 18 percent. But
the surprise in 2015 was not Chinese expenditure, but the entry of the United
States and Mozambique in the list of the five top markets, along with the exit
of Russia, until now a major player in retail tourism, especially at the luxury
end.“The Americans and the return of Mozambicans are a great novelty. Russians
have not been doing much retail tourism since the conflict [in Ukraine] and the
devaluation the ruble. They are abandoning shopping abroad and buying more
domestically,” explains Renato Lira Leite of Global Blue, Portugal. The company
estimates that the number of purchases by Russian tourists in Portugal fell 42
percent last year.With the dollar’s increase in value, US purchases grew 42
percent compared to 2014 and the average value per purchase of 493 euros rose
29 percent. “It was big news,” said Leite. Visitors from Mozambique, whose
spending accounts for four percent of the total, spent 227 Euros on average,
the number of purchases rising 23 percent and the total amount spent by 27
percent.Visitors from Angola continue to form the majority of those who ask for
the return of VAT on their purchases. The oil crisis brought hard times to the
Angolan economy and the average tourist expenditure was 273 euros, down from
350 euros in 2011. Number of purchases fell 8 percent and the total amount
spent dropped by 11 percent compared to 2014.“Not surprisingly, Angola remains
the main market, due to the historical ties that unite the two countries.
Portugal is a favourite destination for shopping, despite the devaluation of
the Kwanza and the oil price crisis. Angolan weight in the Portuguese market
remains huge, but it was more significant in 2014 when it accounted for 46-47
percent,” the Global Blue executive explains.Luxury brands such as Louis
Vuitton and Prada attract high-spending tourists but domestic brands still have
“pulling power” and are growing. Leite says that tourists look for unique items
they can show off when they get home. “There are a number of domestic brands
offer unique items that make all the difference to Chinese and American
tourists,” he says, citing Machado Jeweller and Maria João Bahia.
Mozambican Sasol workers
Mozambican
workers at Sasol Petroleum Temane (SPT) are demanding wage increases and a
review of their employment contracts.The South African multinational, which has
processed natural gas in Inhambane province for 12 years, says it “hardly
generates any profits in Mozambique and employs only 147 workers”, reports A
Verdade. Mozambican workers at Temane feel that their “social and working
conditions have been deteriorating steadily due to the ways the management has
been managing work activities,” according to a protest note sent to the company
which A Verdade has seen.Workers demand “salary adjustment in accordance with
the salary scale in force at Sasol Pande e Temane (SPT) in the last five years,
which the management of the company keeps secret, creating an increasing lack
of transparency in wages”.The workers say it is necessary to “review employment
contracts as a result of changes in working conditions unilaterally imposed by
the employer”.They are demanding that use of temporary labour be curtailed and
that the manager and the human resources consultants be dismissed because they
“use delaying tactics to drag the workers into poverty”.Workers had scheduled a
strike at SPT for Monday February 22, but A Verdade has ascertained that the
strike was suspended following negotiations that began over the week-end.Although
the South African multinational has invested US$1.2 billion, the Survey on
Household Budget 2014/2015 found that not many jobs were created for
Mozambicans in Inhambane province. From 2008/2009 to 2014/2015, the mining
industry in Inhambane registered an increase from only 0.2% to 0.8% of jobs.Earlier
this month, Sasol was approved by the government as operator of the first oil
well in Mozambique. It is not yet known how many jobs will be created or the
details of the production sharing and production agreements governing the new
US$2 billion venture.
Nacala-Porto, Mozambique, to boost tourism
DEFENCE AND SECURITY COUNCIL BACKS NYUSI-DHLAKAMA MEETING
Mozambique’s National Defence and Security Council (CNDS) met
in Maputo on Wednesday, and gave its support to the proposal by President
Filipe Nyusi for a face-to-face meeting between the President and Afonso
Dhlakama, leader of the rebel movement Renamo.The Council called for measures
to “strengthen” Nyusi’s invitation to Dhlakama. Since August, Dhlakama has
repeatedly refused to meet with Nyusi, and also in August Dhlakama unilaterally
suspended the dialogue between Renamo and the government which had been under
way since April 2013.This month Renamo has gone back to violence with a string
of ambushes against civilian vehicles on roads in the centre of the country.Dhlakama
has cited concerns over his personal security as one of his reasons for
declining Nyusi’s invitation. The CNDS thus decided that security conditions
must be created for the meeting between the President and the Renamo leader “in
order to put an end to the attacks and consolidate definitively the environment
of peace and stability, in order to favour the continual socio-economic
development of the country”. The CNDS is a body that advises the President on
national security and sovereignty, territorial integrity and the defence of the
democratically instituted power. It is chaired by Nyusi and its other members
are the Prime Minister; the Ministers of Defencc, the Interior, Foreign
Affairs, Finance, Transport and Justice; the General Director of the State
Information and Security Service (SISE); the Chief of Staff of the Armed Forces
(FADM) and the General Commander of the Mozambican Police.Also sitting on the
Council are two members appointed by Nyusi, and five appointed by the
Mozambican parliament, the Assembly of the Republic (three by the parliamentary
group of the majority Frelimo Party, and two by Renamo). The brief statement
from the CNDS did not reveal whether all its members had attended the meeting,
or whether any votes were taken.
Thursday, February 18, 2016
1992 agreement is the solution to conflicts
"Political capital to manage conflict of interest"
There was much anticipation for the first
Central Committee (CC) of the Frelimo party led by Filipe Nyusi, as President
of the political formation that governs our country for over 40 years. But the
meeting last February 5th is for the story to have lasted only one day and
limited to restructure the secretariat.
"This journey of
leadership that comes from within the party within the party political
structure, then proceeds to the State gives enough luggage to person primarily
a party and Frelimo and a state as Mozambique, where there is a clear separation
between party and state, it gives the possibility of the person creating the
political capital that President Nyusi not have to make major reforms within
the party "explains João Pereira, who is also Director of the Office of
Support Mechanism Management Civil Society (MASC ).Therefore, according to the teaching of
Political Science, Filipe Jacinto Nyusi "have to make the management
of" ambassadors "of former combatants, those who have to give him the
necessary legitimacy to protect you in case of any eventuality. It is no
coincidence that we see, the behavioral analysis, Chipande own, while sitting
next to the President, he is appearing there. This clearly shows that the whole
process.
" Indeed, during the Second Extraordinary
Session of the Party CC Frelimo, Alberto Chipande was sitting on the podium to
the left of the party chairman, Filipe Nyusi, who had on his right Eliseu
Machava, the secretary-general who inherited Guebuza. On the podium, the three
were slightly detached from the remaining members of the Political Committee.
João Pereira argues that it is because of
this legitimacy that no one questioned the former Mozambican Head of State, and
also former president of the Frelimo Party, Armando Guebuza, "he had the
legitimacy and political capital necessary to say that it is this line, and
from this line, you come or not come. And those who decided they were not going
that line came out and he continued on his line. " Os new secretaries elected
by the Central Committee held in the city of Matola are Bias (Secretary for
Administration and Finance), Augustine Thirty (Secretary for Organization and
Training frames), Helena Muando (secretary for the coordination of Social
Organizations) Chaquila Abubacar (secretary for economic area) and Antonio
Niquice (Secretary for Mobilisation and Propaganda). For Professor of Political Science and
Public Administration of EMU, "(...) however much they change things where
are the alternatives within their own party Frelimo, who are the Frelimo
political elites that can be an alternative to itself, has to be among those
".
After the election of new secretary
Filipe Nyusi, the party chairman, he reaffirmed the need for unity, "there
are many challenges that await you as secretariat and one of the secrets to
face them successfully is the internal cohesion. As we did yesterday, we have
to continue to invest in cohesion to meet the challenges of today. "According to João Pereira this gap and
appeal to the union speech is a form of the President of Mozambique to try to
please all sides who are influential within his party. "I think he (Nyusi)
will reach the conclusion that it is not a good dancer to these accommodation
games of various interests, and may be lost in this type of conflict. But it
also has to do this kind of level of patronage networks games that were
developed with the state, I do not know if he can sleep, "concludes the
political scientist.
Tuesday, February 16, 2016
Political dialogue
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Lost 540 million.....
Mozambique loses at least 540
million US dollars as a result of illegal timber exports, mainly to China,
during a period of ten years (2003- 2013).A study carried out by the
organization WWF Mozambique, and quoted by the newspaper "Diario de
Mozambique", reveals that this figure relates only to the illegal export
of logs to China.The report points out surveillance deficiency and high levels
of corruption in the public sector as some of the factors that most contribute
to the unsustainable situation of exploitation of Mozambican forest resources.Compounding
the scenery is great demand for wood fuel, shifting cultivation, uncontrolled
fires and even non-use plans and land use."At a time when complaints arise
public, WWF considers it urgent state intervention for the control of logging
activities in the country," the document said.The study indicates that the
WWF-Mozambique is supporting a trial initiative timber forest operators, hoping
this will allow the suspension of the agents acting outside the norms
prevailing in the country.With technical and financial support from
WWF-Mozambique, the operation was initiated by the Ministry of Land,
Environment and Rural Development (MITADER) involving brigades composed of
frames that institution, non-governmental organizations and journalists.Billed
as an unprecedented initiative by the involvement of civil society, the action
took place between November 2015 and January 2016, and received a grant of $
100,000 from the Swedish Embassy in Maputo, Mozambique through the WWF.The
evaluation course was targeted at a wider debate between public bodies and
timber forest operators, collecting the approval of all parties involved in a meeting
organized by MITADER in Manica, the November 13, 2015.The initiative falls
within the framework of the Forestry Reform that the Mozambican government is
developing, and recognizing the environmental, social and economic impacts of
illegal logging in Mozambique.
“A VERY IMPORTANT COUNTRY FOR UK”
The Secretary of State for
Scotland in the British government, David Mundell, told reporters in Maputo on
Monday that Mozambique “is a very important country for the UK, which is why we
have invested so many resources here”.Mundell explained that the main purpose
of his visit is to support the development of a memorandum of understanding
between the Scottish city of Aberdeen and the northern Mozambican port of
Pemba, the city nearest to the massive discoveries of natural gas off the coast
of Cabo Delgado province.The memorandum of understanding, laying the ground for
a formal relationship between the two cities, is expected to be signed later
this year.Mundell noted that, prior to the discovery of oil and gas in the
North Sea, the Aberdeen economy had depended on farming and fishing. Now it is
effectively the capital of the British hydrocarbon industry. He believed that
Pemba can benefit from Aberdeen’s experience, as the Mozambican natural gas
industry takes off.The business community, he said, should work with the
Mozambican and UK governments “so as to make the most of the opportunities
presented by gas”.Mundell believed that the Mozambican offshore gas discoveries
were “a huge opportunity” for Scottish energy companies.
CONGRESSIONAL DELEGATION CALLS FOR DIALOGUE
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