RENAMO SUBMITS CONSTITUTIONAL AMENDMENT

Mozambique’s main opposition party, the former rebel movement Renamo, has submitted a constitutional amendment to the country’s parliament, the Assembly of the Republic, which would strip the President of his right to choose provincial governors.According to Thursday’s issue of the independent daily “O Pais”, the Renamo bill containing its constitutional amendments was submitted on 31 July, immediately before the close of an Assembly sitting.It has been distributed to the deputies, and to the Assembly’s working commission so that they can provide written opinions. The matter is thus likely to figure on the agenda for the next Assembly sitting which begins in October.The Renamo amendment states that the provincial governors will be proposed by the elected provincial assemblies, and then formally appointed by the President of the Republic. Under the current system, the President’s hands are free, and he can appoint whoever he likes.Renamo leader Afonso Dhlakama has demanded the right to govern six northern and central provinces where he claims Renamo won the October 2014 general and provincial elections. But in fact Renamo only won outright majorities in three of the ten provincial assemblies (in Sofala, Zambezia and Tete). In those provinces, the assemblies could certainly be expected to propose a Renamo candidate as governor.But in the Nampula there was a tie. Renamo and Frelimo each won 46 seats in the provincial assembly. This means that the sole Assembly member from the Mozambique Democratic Movement (MDM) might decide who becomes governor, if the Renamo constitutional amendment is passed.In Manica province, although Dhlakama won a narrow majority in the presidential election, Frelimo won the provincial election, with 40 seats in the assembly to 39 for Renamo and one for the MDM. As for the sixth province, Niassa, Dhlakama’s claim to victory is bogus. Frelimo won in the presidential, parliamentary and provincial elections. In the Niassa assembly, Frelimo holds 42 seats to 34 for Renamo and four for the MDM. The Assembly would thus almost certainly propose a Frelimo candidate for governor.In the other four provinces (Cabo Delgado, Inhambane, Gaza and Maputo), Frelimo enjoys a comfortable majority in the Assemblies. Maputo City is both a province and a municipality – and since the Municipal Assembly covers the entire territory, there is no provincial assembly in the city.The Renamo constitutional amendment also seeks to change the article on types of municipality, adding the specific category of “provincial municipality”. A Renamo bill seeking to establish immediately “provincial municipalities” in the six provinces it claims was thrown out by parliament in April, on the grounds that the bill violated the Constitution in multiple places. The Renamo amendment seeks to remedy at least some of the faults in its earlier bill.Strangely enough, neither Dhlakama, nor any other Renamo leader, has made any public mention of the proposed constitutional amendment in the weeks since it was submitted. Instead, Dhlakama has continued to threaten that he will govern the provinces he wants “by force”.

Renamo’s attitude to the Constitution has changed dramatically. In the late 1990s, there was an attempt to move away from a presidential to a semi-presidential system of government. Frelimo and Renamo parliamentary deputies were united in proposing to separate the posts of head or state and head of government, reduce the powers of the president, and increase those of the prime minister and of parliament.From 1996 to 1999 this was all uncontroversial – until the Renamo parliamentary group, clearly acting under instructions from Dhlakama, performed a volte-face, and demanded the reinstatement of all the presidential powers it had previously claimed were excessive. The new Renamo position was expressed at its clearest by the late David Alone, who declared “In Africa the chief rules. Everything else is cheap philosophy”.Since changing the constitution requires a two thirds majority, which Frelimo could not muster on its own, the 1999 draft amendments were aborted. In 2004, much more modest amendments produced the current constitution, leaving the powers of the President of the Republic unchanged.In the last legislature (2010 to 2014), an ad-hoc commission was set up to draft constitutional amendments. Renamo submitted no amendments at all, and instead boycotted the commission.Only now, in the wake of its defeat in the October 2015 elections, has Renamo decided it wants to amend the constitution, and restrict presidential power.

CHINA’S SLOWDOWN MAY THREATEN MOZAMBIQUE’S GROWTH

A report written by UK based company Fathom Consulting warns that the Mozambican economy is likely to be hit by the slowdown in Chinese economic growth.

In recent years China has seen growth rates of above eight per cent and has used its strong economic position to invest in the African continent and purchase its raw materials. In addition, Africa has provided a useful market for Chinese goods.According to Fathom Consulting, “for China, Africa provides many of the raw materials that are required to fuel its economic growth engine. Africa also provides a consumer-hungry market for its goods, with exports to Africa rising by nearly 15 per cent in the 12 months to 2014. This outstripped export growth to Asia, Europe and the United States”.

The report continued, “for Africa, China’s demand for its raw materials and the inflow of foreign direct investment has provided a source of additional income. More recently, as wages in China have risen, Chinese manufacturers have outsourced production to Africa. This has provided both employment for Africans and the opportunity to master new skills”.

China’s trade with Africa has risen from just ten billion US dollars in 2000 to 220 billion dollars today, which is more than three times the value of trade that the United States has with the continent.

However, since June shares on the Chinese stock market have plummeted and the government has devalued the national currency, the renminbi. These are symptoms of fears of deep, structural problems in the Chinese economy.

There has already been a serious knock-on effect - figures produced in July show that there has been a forty per cent fall in the value of Chinese imports from Africa compared with a year ago.

Fathom Consulting has carried out an analysis of links between 19 African countries and China, and ranked them according to how exposed they are to China’s slowdown. According to this analysis, Mozambique is the eighth most vulnerable country.

The three most vulnerable countries are Zambia, South Africa and Liberia.The author of the report, Oliver White, told AIM that Zambia and Liberia were particularly exposed as foreign direct investment from China amounted to 7.5 per cent of domestic output. He added, “Zambia’s exports total thirty per cent of its GDP, whilst the figure for Liberia reaches 43 per cent”.Liberia is particularly under threat, as exports to China are the equivalent of almost 14 per cent of GDP.White explained that Mozambique is also closely linked with China, with exports to China equal to nine per cent of GDP and the country’s exports totalling thirty per cent of GDP.However, the country is less exposed than Zambia or Liberia because foreign direct investment from China only amounts to two per cent of GDP.Quantifying the effects of all these factors, the report forecasts that growth in sub-Saharan Africa will drop to three per cent this year and 3.5 per cent next year.

 Mozambique is a member of the Southern African Development Community (SADC) and it will be affected by problems in neighbouring South Africa, Zambia and Malawi, all of whom are higher ranked in the report. And if the world tips back into recession this will be a major factor in the country’s future prospects.Mozambique’s economy proved very resilient in the face of the world recession of 2007 and the sluggish growth rates in many countries since then. According to the World Bank, Mozambique’s GDP growth has averaged 7.4 per cent over the last two decades.Until the current doubts about the Chinese economic outlook, it was expected that Mozambique would continue with this impressive record. Speaking in parliament in July, Prime Minister Carlos Agostinho do Rosario said that Mozambique was on course to meet its target of annual growth of 7.5 per cent.In May, the International Monetary Fund reported that “over the medium-term, Mozambique is expected to remain one of the most dynamic economies in the continent, with rates of growth that could average eight per cent over the 2016-19 period”.

ZAMBIA BEGINS IMPORTING ELECTRICITY FROM RESSANO GARCIA

Zambia’s power company Zesco on Wednesday began importing 148 megawatts of electricity from a gas fired generator based in Ressano Garcia in southern Mozambique.The gas is extracted from the Pande and Temane fields in Inhambane province and piped to the Mozambique – South Africa border where the British based company Aggreko has its generator. The electricity is then transmitted to Zambia along the existing transmission lines of the Southern African Power Pool (SAPP).Zambia’s decision to import the electricity is a reaction to a severe power shortage. This is not only affecting citizens, but is also hitting the key mining sector. The economy is already in serious crisis as the price of copper, the metal that contributes nine per cent to the country’s Gross Domestic Product, has dropped to a six year low.However, the situation has deteriorated even further due to a severe power shortage. In large part this is due to drought starving the Kariba dam on the border with Zimbabwe. The shortage of water at Kariba has forced Zesco to cut output from its hydroelectric power station from 500 to 305 megawatts. There are fears that unless the mining companies drastically cut back their power consumption the turbines will have to be switched off in November if the dam falls to minimum level.Analyst Greg Mills, writing in the online newspaper the “Daily Maverick”, blamed Zesco and its Zimbabwean counterpart for continually using more water from the dam than planned. He pointed out that “it seems that Zesco has been operating the intended peaking units much more than the planned three to four hours a day. This means they’ve needed to use more water, resulting in low reservoir level”.His analysis is that at current operating levels, the Kariba dam could continue operating until the end of the year when it is hoped that rains will replenish the reservoir.Strangely enough, the Zambian government claimed that the power Zesco is importing comes from an Aggreko ship moored at Beira. This was the story given to the Zambian media on Tuesday by Chief government Spokesperson Vincent Mwale, after a Cabinet meeting. However, when AIM contacted Aggreko the company confirmed that the power comes, not from Beira but from Ressano Garcia.

Oil and gas on the agenda

Former Mozambique head of state Joaquim Chissano arrived for a private three-day visit to the Angolan capital on Monday afternoon at the head of a Mozambique business delegation, reports the Angop news agency. The former Mozambican president, who did not speak to Angop on arrival at the 4 de Fevereiro International Airport, is due to hold working meetings with the officials of national oil company Sonangol, which will focus on bilateral cooperation in the areas of oil and gas.Joaquim Chissano, now 75 years old, was president of Mozambique from 1986 to 2005, and the second incumbent in the post following the death in a plane crash in South Africa of first president Samora Machel, in circumstances still unclear. 

Sasol CEO stresses Mozambique as key to regional

Sasol Ltd. is focusing its spending power on Mozambique as the world’s largest producer of liquid fuel from coal joins OAO Rosneft and Exxon Mobil Corp. in bidding for new exploration blocks in the southern African nation.Sasol bid with Italy’s Eni SpA and Statoil ASA on two of the blocks in the country’s fifth licensing round, while on a third it entered a partnership with Mozambique’s state oil company, Chief Executive Officer David Constable said in an interview at the firm’s headquarters in Johannesburg. Sasol is also seeking approval to develop two oil and two gas reservoirs, which could supply a 400-megawatt power plant in the country.Constable hopes the government will approve its reservoir development plans before the end of the year as Sasol targets expanding its upstream resources in the region. The company’s other focus as its conserves cash amid a slump in crude prices is to have an ethane cracker in the U.S. operational by 2018."Mozambique is very important for us,” the CEO said. “We’re conserving cash as part of the response plan so that we can pay for the cracker and pay for Mozambique.”

Sasol is also supportive of South Africa’s program to use natural gas to generate 3,126 megawatts of power, Constable said. The company’s involvement could range from sourcing liquefied natural gas to building facilities to receive the imports, he said. In addition to the government program, “we’ve got commercial customers crying for gas," Constable said.

British want to invest in Mozambican oil and gas

A British ‘Invest Africa’ trade mission headed by former British Foreign Minister for Africa and the Commonwealth, Mark Simmonds, was received by President Filipe Nyusi Wednesday in Maputo. According to the presidency Press Office, the mission expressed at the meeting its interest in investing in all the country’s areas of economic activity, including the oil and gas sectors.No specific figures were reported, but there is an expectation that the delegation heralds considerable amounts of investment. On Thursday, the business mission travelled to Pemba, the provincial capital of Cabo Delgado.

Japanese company prospecting for coal in Mossurize

Technical personnel from a Japanese mining company are currently in Mozambique’s Manica province with plans to prospect for coal in the Mossurize district, the provincial director of Mineral Resources and Energy, Olavo Deniasse, recently stated.There are indications of the mineral’s presence in that district, though it must still be determined whether there is enough to justify commercial exploitation, Deniasse told the Maputo daily Notícias.Deniasse did not identify the Japanese company. He explained that prospecting work would begin after the environmental impact study is completed. The aim is to determine the deposit’s economic viability and probable lifespan if commercial exploitation is deemed possible.He nevertheless asserted that all signs indicate the existence of mineral coal in that region of Manica province, given that it is situated in a geological area designated as karoo, a word used in South Africa to indicate a previously swampy region where over the ages peat was transformed into coal deposits.Besides gold, precious and semi-precious stones and limestone, among other valuable minerals, recent research indicates the occurrence of diamonds near the Mozambique/Zimbabwe border and along the Save River in southern Manica province.