WIKILEAKS: US EMBASSY DECLINES COMMENT

The United States Embassy in Maputo on Thursday declined to comment on the content of secret cables from the embassy released by the whistle-blowing organisation, Wikileaks.Three of the cables mostly concern drug trafficking in Mozambique, while the fourth concerns a conversation the former charge d’affaires at the embassy, Todd Chapman, had with an unnamed disgruntled businessman making a series of allegations against President Armando Guebuza.The embassy’s Public Affair’s Officer, Tobias Bradford, told reporters “we don’t talk about the details of classified or allegedly classified information”.But it was certainly true “that we are concerned about narco-trafficking in Mozambique”.In June, US President Barack Obama named Mozambican businessman Mohamed Bachir Suleman as a drug baron under a US law, the Kingpin Act of 1999, which makes it possible for the government to impose financial and economic sanctions against foreign drug traffickers.Bradford said there had been no change since then. Bachir remained on the US list of “Specially Designated Narcotics Traffickers”.Bradford stressed that putting people on this list was not a matter taken lightly. It was “a very rigorous process”, which involved several US federal agencies. He thought the investigations which had led to the naming of Bachir as a drug baron were “very trustworthy”.A second Mozambican businessman suspected of drug trafficking, Momed Khalid Ayoob, was arrested in Swaziland on 1 December in possession of 18 million rands (about 2.6 million US dollars) in banknotes. A Swazi court released him on bail on Wednesday.“We are reading about and following this case with interest”, said Bradford. “We hope it will be investigated by the Mozambican government”.Both Bachir and the Ayoob family are mentioned as drug traffickers in the cables released by Wikileaks.Asked whether the leaked cables might damage US relations with Mozambique, Bradford replied “We have worked hard to achieve good relations with Mozambique that can survive difficult matters”.He condemned the publication of classified information, since it “could put individuals and relations at risk”. He recognised, however, that it was not Wikileaks itself that had leaked the cables, but somebody within the United States. The decision by Wikileaks to publish was “a wrong choice”.The US authorities were still trying to trace the source of the leak, Bradford said, and were also “working on ways to strengthen our security systems”.

A wikileak on Maputo

The source elaborated on the depth of Guebuza's  business interests, which range across the economy. He said that Guebuza is in on almost all of the "mega-project"  multi-million dollar deals via contractual stipulations to  work with the Mozambican private sector. One example is  Guebuza's involvement in the 2007 purchase of Cahora Bassa  Hydroelectric Dam (HCB) from the Portuguese Government for  $950 million. $700 million of this was paid by a private  consortium of banks, which was arranged by a Guebuza proxy,  for which Guebuza received, while he was a sitting president,  an estimated commission of between $35 and $50 million. The  Portuguese bank which arranged the financing turned over its  shares in BCI Fomento, one of the largest Mozambican  commercial banks, to a Guebuza-controlled company.(This Site)

MANHENJE INVOKES NATIONAL SECURITY

Mozambique’s former Interior Minister, Almerino Manhenje, facing charges of budgetary illegalities, complicity in illicit payments and abuse of his position, on Wednesday refused to answer questions put to him by the Maputo City Court on grounds of “national security”.The prosecution alleges that Manhenje authorised the payment of about 1.2 million meticais (about 34,300 US dollars at current exchange rates, but much more at the time of the payments) for communication costs that benefitted people who were not even employed by the Interior Ministry.When judge Octavio Tchuma asked him to explain these payments, Manhenje replied “State security is measured by what does not happen. There are certain missions that because of their sensitivity cannot be revealed. If we are sitting here today, it’s because many people are doing their best for national security”.“What is the military or paramilitary force that can perform its mission properly without strong logistics and communications?”, he asked – although he was supposed to be answering questions, not asking them.The court tried again, asking Manhenje how these payments fitted into the Ministry budget. But the former minister refused to give the details the judge wanted, on the grounds that he had sworn an oath of secrecy in the past and he could not break it, even before a court.“In the interests of the country and of national security, there are certain truths that, for the good of the state and its institutions, I cannot speak about, and am not authorised to speak about – even if this damages my defence”, said Manhenje. “Some truths may benefit me, but would be manifestly damaging for the national interest. Peace and national reconciliation have their price. And I have my oath”.Asked why he had benefited from foodstuffs paid for out of Ministry funds, Manhenje spoke of products destined for the guest houses allocated to the Ministry and to the State Security and Intelligence Service (SISE), but again he refused to go into any detail.“For the good and security of the country, there are certain questions that cannot be accessible to everyone”, he said – and if it had any further questions on the matter, the court should ask “my superiors”.As Minister of the Interior, and Minister in the President’s Office for Defence and Security Matters, the only superiors to whom Manhenje answered were the then President, Joaquim Chissano, and Chissano’s two Prime Ministers, first Pascoal Mocumbi and later Luisa Diogo.Manhenje was more forthcoming about air tickets paid for his wife and daughter. He claimed that this expenditure had been authorised by Chissano, and that once they had reached their destination, their accommodation expenses were paid out of his own pocket.As for his wife’s cell phone bill, paid by the Ministry, he said that at the time both he and his wife had been absent, and it was the Ministry’s protocol office that took the initiative to pay the bill. The court should therefore direct this question to the protocol office.One charge Manhenje flatly denied. He said he had not authorised the alienation of two Ministry warehouses to the company Unipol (which was supposed to produce police uniforms). In fact, Unipol had been allowed to use the warehouses but was never their owner, since any such alienation would have required not only his signature, but also that of the Finance Minister.“That’s why those warehouses remain, up until today, state property”, Manhenje said. The former Minister said the accusations against him derive from how the 2004 budget was implemented. The General State Accounts for that year had been analysed by the Administrative Tribunal (the body that oversees the legality of state expenditure, and later by the country’s parliament, the Assembly of the Republic. At no point had he been called upon to give an explanation of how his Ministry’s budget had been spent. The first time he had been confronted with any accusations was at the Public Prosecutor’s Office (in late 2008).This was rather disingenuous of Manhenje, since he knew full well that immediately after taking office in 2005 his successor, Jose Pacheco, ordered a full audit of the Interior Ministry.His co-accused, the former director and deputy director of the Ministry’s finance department, Carlos Fidelis and Alvaro Carvalho, both recognised that they had made illicit payments. But they excluded from this the payment of foodstuffs for high ranking Ministry officers which they claimed was “an old practice” in the Ministry.They also fell back on the Nuremburg defence. They were just carrying out orders from their superiors.

TRIAL OF FORMER INTERIOR MINISTER BEGINS

The Maputo City Court on Tuesday began hearing the case against former Interior Minister Almerino Manhenje, accused of committing budgetary irregularities and abusing his position, much less serious charges than that of diverting state funds which prosecutors initially put on the charge sheet.The case has already undergone some sharp twists and turns. Initially Manhenje faced 49 charges – but the investigating magistrate threw out 48 of them. The prosecution appealed to the Supreme Court, which reinstated some of the charges, and reorganized the charge sheet.As a result, Manhenje now faces six charges - three charges of violating budgetary, two of covering up the payment of undue remunerations and one of abusing his position.But the Supreme Court rejected the charge of diverting state funds (which could have carried a sentence of 20 years imprisonment) on the grounds that Ministers do not normally have funds from the state budget under their direct control.Ministers could not therefore physically steal the money. They could, however, be the “moral authors” of such thefts, if they conspired with others for the diversion of the funds. For that to stick, the prosecution needed to prove that Manhenje had acted in concert with others to divert the funds.The Supreme Court found that the prosecution had not presented evidence of such a conspiracy, and so this accusation was eliminated from the charge sheet.The “violations of budgetary legality”, of which Manhenje is charged, concern the payment of fixed and mobile telephone costs for senior Interior Ministry officials, although these costs were not covered by the Ministry’s budget. Manhenje is also accused of paying with Ministry funds for his wife’s phone bill. This sum was 8,226 meticais (234 US dollars at current exchange rate, but considerably more at the time).The charge of abuse of his position refers to the granting of two warehouses belonging to the Interior Ministry to the company Inupol, which was supposed to produce police uniforms. Manhenje, the prosecution argues, did not have the power or authorisation to make this deal.The charges of covering up for “undue remunerations” refers to the allegation that Manhenje had benefited illegally from foodstuffs to the value of over 551,000 meticais acquired with Interior Ministry funds by his two co-accused, Carlos Fidelis and Alvaro Nunes de Carvalho, who were the financial director and deputy director of the Ministry.He had also allegedly accepted that air tickets for his wife and daughter were paid out of Ministry funds, with no legal basis for such generosity.Fidelis and Carvalho also face charges of paying “undue remunerations” – in their cases this refers to paying fictitious wages to 55 people, some of whom had already died. The list also included the names of people who had been expelled or transferred from the ministry, and some who seemed not to exist at all. Nonetheless, the wages were regularly paid.On Tuesday, the session was entirely occupied by the judge, Octavio Tchuma, reading the documents – the charge sheet, the dispatch eliminating most of the charges, the prosecution’s appeal, and the ruling from the Supreme Court. The documents took seven hours to read.Manhenje is scheduled to give evidence on Wednesday

RENAMO TRIES TO CENSOR GOVERNMENT

Mozambique’s main opposition party, the former rebel movement Renamo, on Wednesday tried to prevent the government from amending a paragraph in its economic and social plan for 2011.The addendum, Renamo said, had been submitted irregularly, and so should be struck out. This was a “prior question” which should be solved before even starting the debate on the plan and budget.Irritated deputies of the ruling Frelimo Party regarded this as just another time-wasting manoeuvre by Renamo, and demanded that the debate should begin. Fatally, the parliamentary chairperson, Veronica Macamo, hesitated – which allowed Renamo to string this procedural issue out for an hour. Frelimo demanded an immediate vote on moving to the debate – under the Assembly’s standing orders this demand should take priority over other matters. However, Renamo declared they didn’t want a vote on starting the debate, but a vote on canceling the supposed addendum.The head of the Renamo parliamentary group, Angelina Enoque, threatened that, if Macamo took a vote on starting the debate, the Renamo deputies would all refuse to participate, and would leave the chamber, only returning when the debate was under way.Rather than calling Enoque’s bluff, Macamo declared that “this document does not have the format of an addendum. It’s merely a document that resulted from a discussion between the Assembly’s Plan and Budget Commission (CPO) and the government”.Renamo treated this as a victory and erupted into applause. The Renamo behaviour behaviour reeked of dishonesty, because the deputy who raised the issue, Jose Samo Gudo, is the rapporteur of the Plan and Budget Commission and he had signed the CPOn opinion on the Plan, which contained the supposed addendum. Indeed, Samo Gudo had initialed every page of the opinion.The substantive issue was the definition of poverty. The Economic and Social Plan stated that poverty in 2008/09 was estimated at 54.7 per cent of the total population (the figure found in the latest household survey by the National Statistics Institute). This was a decline of 12.1 percentage points compared with the figure of 69.4 per cent in 1996/97, but the following survey, of 2002/03 found a poverty incidence of 54.1 per cent. This meant that between 2003 and 2009 “there were no statistically significant changes in the level of poverty”.In absolute terms, poverty had increased. “The number of people below the poverty line rose from 9.9 to 11.7 million, due to the growth in population of about three million between 2002/3 and 2008/9”.The government’s “addendum” put before the CPO attempted to elaborate on this, and show exactly what the figures meant. The altered version of the paragraph stated that the poverty figures referred to “the proportion of people who have an average daily income of less than 18 meticais (51 US cents, at current exchange rates), the amount needed to ensure a daily intake of about 2,000 calories”.The government defines this as “food poverty”, and added “this is not a measure of all indicators of poverty since it does not assess access to water, education, health or access to goods such as bicycles and radios”.It blamed “food poverty” on the floods which struck Sofala province in 2008, when the household budget survey was being undertaken, and on the lethal yellowing disease which struck coconut palms, one of the mainstays of the economy of Zambezia province.The dispute erupted again several hours later, when the chairperson of the CPO, Eneas Comiche, tried to read out the CPO opinion. When he reached the poverty paragraph, Renamo interrupted and demanded that it be censored.The addendum had been withdrawn by Macamo, Samo Gudo claimed, and so it should not appear in the CPO opinion, which would have to be rewritten.A second Renamo deputy, Francisco Machambisse, declared “what was withdrawn cannot be known”.This was too much for Macamo – the CPO’s opinion had been written and signed by all of its members, including the three from Renamo. Nobody had the power to tell the CPO to go and rewrite it.Renamo did not push the issue to a vote, and Comiche was allowed to finish reading the opinion.The only conclusion one can draw from this procedural wrangle is that Renamo does not want the public to know that the poverty line is fixed at an income of 18 meticais a day.

CPD CASE: ACCUSED SENTENCED TO 12 YEARS

The Maputo City Court on Tuesday sentenced the former director of the Mozambican government’s Data Processing Centre (CPD), Orlando Come, and the CPD’s former head of administration and finance, to 12 years imprisonment for defrauding the CPD of 3.6 million meticais (about 103,000 US dollars).The two were also ordered to repay the stolen money.The presiding judge of the seventh section of the City Court, Fernando Bila, said the sentence was intended to have an “educational” effect, seeking to prevent others from acting in ways that damaged public institutions.“I would like to draw attention to the following”, warned Bila. “The facilities that surround Mozambican leaders can corrupt them, and the leaders of public institutions should know that they are managing public property, and they should not make use of that property for their personal benefit”.Bila said the thefts had been planned in advance, and that the two accused had plotted among themselves to defraud the CPD. A further aggravating factor was that both men were senior state officials, who had worked at the CPD for long periods – 20 years in the case of Come, and 18 for Vilanculos.Bila said the two had abused the funds of the CPD for their own advantage, at the expense of the institution and of its workers (whose wages were often paid late).“The accused deliberately disorganized the institution’s accounting system”, said the judge. “They acted with total disrespect for the norms that govern the management and functioning of public institutions. As managers of the institution, they should have managed its resources in a rational and transparent manner. Instead, they used them to damage the institution”. In particular, Bila found it proven that Come had abused a Visa credit card provided by the CPD. This card, which was supposed to have a monthly ceiling of 100,000 meticais, clocked up usage of 1.3 million meticais. This money was spent on trips to South Africa and Swaziland, on dinners, and on a variety of expenses in Maputo’s plushest hotel, the Polana, and its casino.In his defence, Come had claimed that the credit card was intended to promote the image of the CPD, and was used to pay for his entertainment allowance. These expenses, he alleged, did not require any justification, because the CPD enjoyed “financial autonomy”.Come also withdrew 1.1 million meticais of CPD funds to purchase foreign currency for trips abroad, and did not account for how this money had been used. He claimed that it had been used to finance his own training in South Africa, but the court noted there was no evidence that this had been authorised by Come’s superiors.
The prosecution had also proved that Come used CPD money to grant loans of 100,000 meticais to Manuel Vilanculos, and of 80,000 meticais to his brother, Francisco Come. His brother repaid the money – but only after Come had been arrested in January 2009.Come spent 45,900 meticais of CPD funds to pay school fees for his daughter and a niece. The court found that this money had not been reimbursed, despite a claim by Come that it had been discounted from his wages at the rate of 5,000 meticais a month.As for the money (116,000 meticais) paid to rent a house, Bila said that Come had used false documents to show that he had an agreement with a Brazilian company whose technical staff would supposedly have stayed at the house.There had also been illegitimate payments from the CPD of 310,400 meticais to Come’s bank account and of 1.8 million meticais to Vilankulos’s account. Come had claimed that this money was the payment of back wages he was owed from his previous job as national director of statistics, and were paid on the orders of the Minister of Finance.This meant that Come had effectively been drawing two wages, each of 79,000 meticais a month. Bila said he had not proved he was entitled to these sums. “Those wages were paid improperly”, he declared.The only point where Come was proved right concerned 37,700 meticais paid to repair a car. The court accepted that this car belonged to a car hire company, and not to Come’s daughter, as the prosecution had alleged.Come and Vilanculos did not immediately state whether they intend to appeal.

ASSEMBLY PASSES INCREASED BUDGET

The Mozambican parliament, the Assembly of the Republic, on Tuesday passed a budget for itself for 2011 of 556.4 million meticais (about 15.9 million US dollars), of which 56 per cent will go on the wages and allowances paid to the 250 deputies.Despite the government’s call for austerity, this figure is ten per cent larger than the Assembly budget for this year, and the total amount paid to the deputies has risen by 14 per cent.The deputies’ salaries amount to 162.7 million meticais – but that sum is almost doubled by the various allowances paid to the deputies. There is an attendance allowance, a constituency alliance, an entertainment allowance, allowances for fuel, water, electricity and rent. This brings the total amount paid to the deputies to 309.1 million meticais – which works out to a total average remuneration of 103,000 meticais per deputy per month.Deputies who sit on commissions earn considerably more, and those who have no such responsibilities earn less. The Assembly budget is nowhere near as detailed as it was in the 1990s, where payments for commission chairmen, rapporteurs and members were laid out in detail. With the figures made available on Tuesday it is only possible to give an average.One of the changes is an increase in the rent allowance to 12,000 meticais a month. Deputies defend this on the grounds that rents in Maputo are expensive, and the housing market is completely unregulated. They point out that deputies from the provinces who rent housing in Maputo to attend parliamentary business are already paying more than 12,000 meticais a month in rent.The increase in the rent allowance was announced publicly on Saturday by Mateus Katupha, spokesperson for the Assembly’s governing board, the Standing Commission. The deputies will also be paid a new year bonus equivalent to an extra month’s basic wage, whenever the government decrees this bonus (known as “the 13th month”) for state employees. In recent years, it has always been decreed. Deputies’ salaries will also rise in line with any wage increase for state employees in 2011.Currently, the statutory monthly minimum wage in Mozambique varies between 1,593 meticais for sugar workers to 3,483 meticais for workers in financial activities. As for other items in the budget, wages and allowances for the Assembly’s staff amount to 89.6 million meticais, while goods and services over the year will cost 132.5 million meticais. Transfers (payments to international bodies, scholarships, medical expenses, and what are referred to as “other events”) are budgeted at 19.5 million meticais.The capital budget is 15.7 million meticais, which is only a 2.6 per cent increase on this year’s figure. Most of the capital budget is to be spent on rehabilitating and maintaining the Assembly buildings, but 2.5 million meticais is set aside for studies on building a parliamentary complex, which could provide deputies with accommodation and thus solve the rent problem. In the vote on the budget, deputies from the majority Frelimo Party and from the Mozambique Democratic Movement (MDM) voted in favour, but the 49 deputies from the former rebel movement Renamo abstained.They gave two radically different reasons for doing so. Jose Samo Gudo protested that there was no correspondence between the budget and the Assembly programme it was supposed to finance. The programme contains goals such as “raising the capacity of deputies for legislative production” and “stepping up the contact between the deputies and their electorate”, but does not specify how much money should be spent on each goal. This lack of detail irritated Samo Gudo. “It’s a matter of principle that what we demand from others, we should demand from ourselves”, he said.But Anselmo Vitor had quite a different objection. He thought the budget was too small. “This budget will not satisfy the needs of the parliamentary commissions, or of constituency work”, he claimed.

URGENT TO ENSURE REGULAR SUPPLY OF SAFE MEDICINES

Mozambican Health Minister Alexandre Manguele declared in Maputo on Tuesday that it is a matter of priority to guarantee the regular availability to the public of safe, effective and good quality essential medicines. Speaking at the opening of a seminar on strengthening the Mozambican pharmaceutical sector, Manguele said it was also urgent to ensure that medicines are prescribed and dispensed correctly. “Efforts to manage and use medicines rationally should not be wasted by acquiring false medicines or medicines of poor quality”, he stressedTo ensure access to safe and good quality medicines throughout the country, Manguele added, it was essential to strengthen management of the whole chain of supply, as well as the systems for registering medicines and for pharmaceutical inspection. The minister also called for greater coordination between the various health programmes, the central medical stores, and the Health Ministry’s pharmaceutical department.“We must have a well-equipped quality control laboratory, with qualified technical staff”, he stressed. “The pharmacy and its medicines are the most visible part of the health system, and all governments are exposed to social pressure because of the lack of medicine, or their high price, or because of the circulation of poor quality or counterfeit medicines”.Many Mozambicans have difficulties in obtaining medicines, due to the absence of pharmacies in rural areas. Many rural health posts and centres do not have sufficient stocks of drugs, which obliges patients to travel to district or provincial capitals to obtain the medicines they need.The health service has also suffered thefts of medicines which are then sold, in completely inappropriate conditions, in informal markets by people with no qualifications.The two day seminar will discuss a strategy for guaranteeing control of the quality of medicines used in Mozambique.

PLANE CRASHES IN BAD WEATHER

A Beechcraft 1900C aircraft, belonging to the private Mozambican company Kaya Airlines, crashed at Maputo International Airport shortly before midnight on Friday.According to a report on the independent television station STV, the plane had flown from the northern Mozambican city of Nampula. All 17 people on board – five crew members and 12 passengers – survived the crash, but some were injured and are undergoing treatment in Maputo hospitals. Those with the most serious injuries were later evacuated to South African clinics.The plane crashed as it attempted to land, and came to rest about 600 metres from the runway. The causes of the crash are not yet known, but at the time a severe storm was affecting Maputo with heavy rain and strong winds.According to a report in Monday’s issue of the independent newsheet “Mediafax”, the pilot of the Beechcraft ignored instructions from the Maputo control tower advising against an attempt to land. The plane circled the airport twice and then made its ill-fated approach to the runway.“Mediafax” also claims that some of the plane’s equipment was not working, notably its altimeter, so that the pilot was not aware of how low he was as he came in to land.Kaya used to be called Transairways, but changed its name when it was purchased by the company Tiko. This is owned by former Foreign Minister Leonardo Simao (with 50 per cent of the shares), his business partner Fausto Cruz (49 per cent), and the latter’s wife (one per cent).Cruz was on board the plane and suffered serious head injuries in the crash. He is among those evacuated to South Africa.

ASIAN WAS TAKING E18M TO DUBAI

The Asian man arrested for being found in possession of E18 million in cash, is said to have been taking the money to Dubai. Momed Khalid Ayoob will be behind bars at least until Friday as the crown yesterday opposed his bail application at the High Court.He filed the application through his lawyer Ntobeko Piliso from Piliso, Simelane and Partners.Justice Thomas Masuku postponed the matter to Friday to allow the office of the Director of Public Prosecutions (DPP) to file opposing papers. Crown Counsel Phila Dlamini yesterday filed a notice of intention to oppose the application, in the matter which was held in Justice Masuku’s chambers.Ayoob was not present in court as the matter had initially been proposed to be heard at 2:30pm.He claims that he is from Mozambique and is a business magnate operating businesses in Mozambique and Dubai. He alleges that his businesses deals with garments, electronics and motor vehicle sales.Ayoob was arrested by police attached in the Manzini Fraud and Commercial Unit on December 1, 2010 at the Matsapha Airport. He is alleged to have failed to declare over E18 million found in his possession, in contravention of Section 81 of the Customs and Excise Act of 1971."I submit before this honourable court that I have a bona fide and valid defence to the charge that I am facing in that the provisions under which I have been charged, are not applicable in the circumstances, particularly because I was en-route to Dubai where I run a business under the style Ibrahim Alshamse (PTY) LTD," reads Ayoob’s affidavit.He further alleges that he supplies goods to businesses in Mozambique and Angola. He claims that the money found in his possession had been paid to him by his customers in Mozambique. He also says he will plead not guilty to the offence during the hearing. He undertook to abide by any conditions the court may set when admitting him to bail. He also said he would not abscond trial, particularly considering that the money is in the custody of the police and he cannot leave it behind. He is currently kept at Manzini Police Station, waiting to be transferred to the Zakhele remand centre.(TIMES OF SWAZILAND)

STUDENTS GRADUATE FROM MILITARY ACADEMY

The Samora Machel Military Academy in the northern Mozambican city of Nampula on Thursday graduated a group of 70 students trained by the academy on various degree level courses.The courses covered several military specialisms, including motorized infantry, military aviation, artillery and administration and logistics. This is the second group of students to complete their courses at the academy.Addressing the graduation ceremony, Mozambican President Armando Guebuza recalled that, in the context of a multiparty democracy and the rule of law, the armed forces owe their loyalty to the Constitution, to the nation and to the legally instituted civilian political power.This subordination of military power to legitimate civilian political power was the cornerstone “for the consolidation of democratic values and principles, for the prevalence of peace as the highest value of our society, and for political stability”, declared Guebuza. These were the indispensable prerequisites “for the consolidation of national unity and for the victory we desire in the struggle against poverty”.Guebuza repeated the message he had given on Wednesday, when closing a training course for Special Forces in the port city of Nacala, that the Mozambican army must prepare to meet new threats to security such as piracy, and trafficking in people, drugs and guns.He urged the Academy graduates to strengthen the relations between the military and the population, to ensure that society always regarded the country’s military institutions with sympathy and admiration. The same values should guide Mozambican troops when they were on peace-keeping missions abroad.”This is how the military has been contributing towards strengthening our diplomacy, and to raising the prestige of this motherland of heroes in the community of nations”, Guebuza said. “This prestige has the effect of creating more international sympathy for our agenda to mobilise more partners to join us in our efforts to free ourselves from poverty”.

MOZAMBIQUE INVESTMENT CONFERENCE IN LONDON

A major investment conference was held in London on Thursday, aiming to increase British investment in Mozambique.Mozambican Foreign Minister Oldemiro Baloi opened the conference. He headed a senior delegation including the ministers of Agriculture, Mineral Resources and Transport, Jose Pacheco, Esperanca Bias and Paulo Zucula.The conference tapped into the growing interest in the potential rewards of investing in Mozambique. More people than expected wished to attend, and the organisers were concerned that over three hundred had registered, while the venue, the National Liberal Club in central London, only has space to accommodate 200. The British weather solved this problem. Some of the worst snow that the country had seen in decades caused severe disruption to the transport network, and kept dozens of would-be delegates away. The organizers proved able to cope with the 250 people who braved the weather and did attend.One of the key speakers at the conference was the British Under-secretary of State for International Development, Stephen O'Brien, who stated, 'Mozambique is a country of huge potential. Growth in the private sector is the best way out of poverty, and is good for development'.O'Brien argued that 'it is the job of the British government to reduce the 'beta' risk of investing in Mozambique in partnership with other countries'.For the British Minister, private sector investment is critical to development as it is the engine for growth and prosperity. It was also in Britain's strategic interest to invest early in countries such as Mozambique.Agriculture Minister Jose Pacheco told potential investors of the country's comparative advantage in agriculture and pointed out that Mozambique is the gateway to the southern African region.Keith Palmer, the chairman of the project development company, AgDevCO, reinforced this outlook. This company is investing heavily in the Beira Agricultural Growth Corridor, where he says there is the potential for 200,000 hectares of irrigated agriculture (currently only 50,000 hectares of land is irrigated in the whole country). This gives investment opportunities of an estimated 1.7 billion US dollars over the next 20 years.Palmer stated that the Beira Agricultural Growth Corridor alone could make Mozambique a net exporter of food.Peter Hesketh, the Director of the Sainsbury Foundation Charitable Trust, confirmed the potential offered by Mozambique. He pointed out that there isa 'need for a new frontier to feed the world' and that 'Mozambique is a unique proposition in terms of water and soil, diversified crops, and the ability to get crops to market before competitors'.The Trust has set up the agricultural group Aquifer, which operates under the brands Mia, Mozfoods, Tia Rosa and Vanduzi. It is producing crops that are sold in Mozambique and on the supermarket shelves in Britain.According to Hesketh, Mozambique's 'agricultural opportunities are borderline limitless'.Speakers praised both the role of the Mozambican government and the country's management and workers. Tony McCluskey of Kenmare Resources, which runs the Moma Titanium Minerals Mine in the northern province of Nampula, said that 'the government has been very supportive of the Moma mine over many years'.He praised the Minister of Mineral Resources, Esperanca Bias, for her role in ensuring that the response to the recent disaster that hit the village next to the mine, which was inundated with water when the mine's dam burst, was dealt with as quickly as possible.Eric Kohn, the chair of Noventa, which has invested in the tantalum mine at Marropino, in Zambezia province, strongly argued for the development of Mozambican management, and advised investors to avoid relying on management support from out of South Africa.Graham Mascall from the Ncondezi Coal Company, which hopes to mine coal in Tete province, stated, 'Mozambique is an attractive country for investment with an attractive fiscal regime'.He pointed out that the Zambezi Basin is one of the largest undeveloped coal basins in the world, which can respond to the growing demand for thermal and coking coal.A warning note was struck by Professor Paul Collier who said that depleting national assets must be matched by building up other assets. He pointed to the lesson from Nigeria where resources in the Niger Delta region had been plundered. He also stressed that ancillary infrastructure must be multi-user (this refers to the expansion of road, rail and electricity networks needing to satisfy the needs of communities and not just business interests).Minister Esperanca Bias pointed out 'Mozambique has learnt from other countries. Part of the revenues from mining must go back into the community'. She also emphasised that the country is interested in membership of the Extractive Industries Transparency Initiative (EITI) and the Kimberley Process.Transport Minister Paulo Zucula stressed the improvements that are being made to the transport network, especially the ports. Maputo and Beira ports are being dredged so that larger vessels can dock, and a new deep water port is to be built at Techobanine, south of Maputo, at a cost of seven billion US dollars.

COAL INDIA TO START DRILLING IN TETE

Coal India Ltd (CIL) plans to start exploratory drilling for coal in the blocks allocated to it in the western Mozambican province of Tete within the next two months, and hopes to start coal production by 2013, according to reports in the Indian press.CIL, which is 90 per cent owned by the Indian government, won the tender for two blocks last August, and has a licence to explore and develop them over the next five years. It subsequently set up a wholly-owned subsidiary in Mozambique. Coal India Africana Limitada (CIAL), and has promised to sell off 15 per cent of this company to a body nominated by the Mozambican government, once the size of the reserves in its blocks has been established. A CIL spokesperson, interviewed by the “Economic Times” of India, said that a CIL subsidiary, the Central Mine Planning and Design Institute (CMPDIL), will be in charge of the exploratory drilling.The CIL blocks cover an area of 205 square kilometres. Preliminary estimates are that the coal reserve is about a billion tonnes. 20 per cent of this is expected to be coking coal, and the rest thermal coal. 'Exploration on an area of 205 square kilometres will take a lot of time”, said the CIL spokesperson. “However, we will start exploratory drilling on areas which are promising. We will execute drilling in these areas following which mining will start. It takes at least two years to start mining in any area.' Coal India is one of several companies that hold coal exploration licences in Tete. The companies that are most advanced, and expect to start exporting coal next year are the Brazilian mining giant Vale, and Riversdale Mining of Australia.

CORRUPTION TRIAL BEGINS IN CABO DELGADO

The Cabo Delgado Provincial Court in northern Mozambique on Wednesday began hearing the case against 11 senior civil servants, accused of defrauding the state of more than five million meticais (about 142,000 US dollars, at current exchange rates) in 2006.The most senior of the accused is Angelina Alidaboka, a finance official in 2006, but now the permanent secretary of the Mecufi district administration. The other accused are officials in the provincial planning and finance directorates, and in the Cabo Delgado health services.Originally there was a 12th accused, Antonio Mandundo, who was deputy provincial director of planning and finance when the thefts occurred. But he cannot stand trial because he died earlier this year.All 11 suspects are accused of withdrawing state funds for their own benefit, resorting to over-invoicing, falsification of documents, and even crude erasures on invoices. Even with the erasures the invoices were accepted in the finance department of the provincial health directorate.One of the accused, health official Anabela Alfredo, downplayed the erasures. She said she only recognised one erasure, and it was an attempt to correct the date of the invoice.The trial did not get off to a good start, since only six of the 11 accused showed up at the courtroom in the provincial capital, Pemba.The presiding judge of the Provincial Court, Joao Ribeiro, told the independent daily “O Pais” that the provincial director of finance, Paulo Risco, and five other Cabo Delgado finance officials are facing charges concerned with a separate and much larger fraud, involving the theft of 50 million meticais in 2009. Ribeiro expected this case to come to trial in the near future.

FEARS OF DRINK SHORTAGES AS XMAS APPROACHES

As the festive season approaches, the production of both beer and soft drinks in Maputo faces serious problems due to restrictions in water and electricity supplies.Unless the problems are solved quickly, there might not be enough beer and soft drinks on the Maputo market to meet demand over the Xmas and New Year period.The Mozambican branch of the Coca Cola company is suffering from electricity restrictions, a situation that is exacerbated by the fact that the company’s generator has broken down. There are indications that the company is acquiring a new generator, which should arrive in the country by 26 December, too late to deal with the Xmas demand.Meanwhile, the sole brewery in Maputo, owned by CDM (Beers of Mozambique), the local subsidiary of the giant international brewer SAB-Miller, is facing problems in water supply, an essential raw material for beer production.CDM produces the Mozambican brands 2M, Laurentina, Raiz, and Manica, plus a variety of other beers, including Carling Black Label, Castle Milk Stout, Peroni, Nastro Azzurro, Castle Lager, Barons and Redd's.According to the National Director of Trade, Calado Silva, the Government has contacted the water and electricity services “and we have found alternatives to mitigate the situation and ensure that the two factories continue to produce so that there will be enough products for the festive season”.Silva played down fears of an impending shortage, and declared that there was no need to panic. He noted that fears of a drink shortage always surface in December.For soft drinks, there are alternatives, since Coca-Cola’s main rival, Pepsi-Cola, also has a factory in Maputo. But CDM made sure that it has a complete monopoly on beer production, by taking over the company producing the Laurentina brand in 2002. It then closed down the Laurentina brewery, and centralized all Maputo brewing at its 2M brewery in the city of Matola.At the annual private sector conference held last month, private businesses had warned that frequent power cuts and high water costs are affecting production and productivity, leading to serious losses.

16 FOUND GUILTY IN CORRUPTION TRIAL

The Maputo Provincial Court, sitting in the southern Mozambican city of Matola, on Tuesday sentenced 16 civil servants to prison terms of between three and 21 years for their part in corrupt schemes that resulted in the theft of about 2.8 million meticais (about 79,000 US dollars) of public funds.The man regarded as the mastermind in the theft, Mario Tique, the former head of the expenditure department in the Maputo provincial directorate of planning and finance, received the longest jail term, of 21 years and seven months. His colleague in the same directorate, Ermelinda Barros, received a sentence of 12 years and seven months.Noe Mathe, provincial director of women’s affairs and social welfare at the time of the theft, who later rose to become press officer for the Minister of Women’s Affairs, was jailed for eight years and six months.They and 13 others were found to have acted deliberately to defraud the state. But a further 19 suspects were acquitted.Tique and his accomplices were also ordered to repay the stolen money. The evidence given in the case was so detailed that the judge was able to determine exactly how much each of those found guilty should repay.But the case is far from over, since Tique’s lawyer, Adao Bunja, immediately announced that his client will appeal.

WFO PRAISES MOZAMBICAN FARMERS

The United Nations World Food Programme on Tuesday praised Mozambique for its pioneering role in supporting the WFP Purchase for Progress (P4P) initiative that helps connect small scale farmers to markets as well as improving the quality and supply of their products.On a visit to Mozambique to attend a conference on P4P, WFP Executive Director Josette Sheeran pointed out that “Mozambique was the birthplace of our P4P programme and it is leading the way in demonstrating how WFP’s investment and support for farmers can become an engine for sustainable agricultural development”.In the past three years WFP has purchased nearly 1 billion US dollars of food from African farmers to support its programmes.Under the P4P initiative, WFP works with small farmers to enable them to be part of the WFP food supply chain. Since it began in September 2008, P4P programmes have been launched in 20 countries. Through P4P, WFP has purchased more than 120,000 tonnes of food from small scale farmers at a value of 40 million US dollars.According to Sheeran, “farmers here in Mozambique have shown how P4P can be a model for pulling vulnerable communities out of food dependency and breaking out of the cycle of poverty. We have built on the early successes of Mozambican farmers to roll out the P4P programmes, providing more than 50,000 farmers across the world with the vital skills they need to boost food security in the regions where they live”.Under the scheme, farmers receive training in improved agricultural production, post-harvest handling of crops, marketing, agricultural financing, and how to sign contracts with WFP. They also receive sacks from WFP.This year the P4P initiative in Mozambique has led to the purchase of 5,350 tonnes of maize and pulses from smallholder farmers.“The decision to gather here in Mozambique for our annual conference on P4P reflects our admiration for the role the farmers of this country have played in showing how local production can be harnessed as to pull people out of hunger and set them on the road to development,” Sheeran said.The P4P conference opened in Maputo on Monday and brings together government representatives, NGOs, and small-scale farmers.WFP’s P4P programmes are supported by the Bill & Melinda Gates Foundation, the Howard G. Buffet Foundation, the European Commission, and the governments of Belgium, Canada, France, Ireland, Luxembourg, USA, and Saudi Arabia.

GUEBUZA DOWNPLAYS ABSENCE OF KEY WESTERN LEADERS

Mozambican President Armando Guebuza has played down the absence of the French president, the British prime minister and the German Chancellor, Nicolas Sarkozy, David Cameron and Angela Merkel respectively, from the Third Africa-European Union Summit, held in Tripoli on Monday and Tuesday.Speaking to the Mozambican reporters who covered the event, Guebuza said “we believe that all who came here, both from Africa and the EU, are properly accredited to speak on behalf of their countries.”He pointed out that “In Africa there are also many heads of state who did not attend the summit”'News circulated by the international press suggested that the absence of the three European leaders was due to fear that Sudanese President Omar al-Bashir, who has been indicted on charges of war crimes, crimes against humanity and genocide by the International Criminal Court (ICC), might attend the summit.However, al-Bashir did not participate in the summit, since the day before it was due to start the Libyan authorities withdrew the invitation that was addressed to the Sudanese president.Despite the absence of the three European leaders, who govern the three largest EU economies, Guebuza expressed his satisfaction with the outcome of the event, saying there were many positive developments.“Yes, this summit was worth it,” said Guebuza, explaining that gatherings of this nature are not held in order to sign contracts or funding agreements. According to Guebuza the EU remains interested in contributing to investment in Africa, and fighting against unemployment on the continent.During the summit, Guebuza held bilateral contacts with some European countries, including some that had once belonged to the Soviet bloc, and who expressed their interest in reactivating cooperation ties with Mozambique.“Some countries that formerly belonged to the socialist bloc, such as Hungary and Latvia, stressed the need to resume the cooperation that we had before they joined the European Union. Many of our cadres were trained in those countries”, said Guebuza.Questioned about the importance and benefits to Mozambique of these events, Guebuza said that they help create a friendly atmosphere for the country, which is seen as a model of transition from a state of conflict and war to a state of peace, and which has also proved able to reorganize its economy to achieve enviably high levels of growth.Another advantage is the opportunity to meet with other statesmen and to review the cooperation agreements already signed.“I had a meeting with the Portuguese Prime Minister (Jose Socrates) and what we did was to check the implementation phase of the agreements that we have signed about investments”, said Guebuza.

THIEVES STEAL FUEL FROM MOBILE PHONE MASTS

Thieves are vandalizing mobile phone masts belonging to Mozambique largest mobile phone operator, the publicly owned M-Cel, in order to steal the diesel they use, Radio Mozambique reported on Tuesday.Most of the thefts occur in the southern province of Inhambane, and the stolen fuel is then sold to motorists driving along the country’s main north-south highway. It is believed that the thieves supply informal fuel dealers who stand along the road, offering fuel for sale at suspiciously low process.A joint operation by the police and M-Cel’s own security guards managed to recover 5,000 litres of fuel that had been stolen from mobile phone masts.The police have now launched an offensive throughout Inhambane against the informal trade in fuel, to stop the dangerous practice of people selling fuel out of plastic containers. 

SABMILLER ACCUSED OF AVOIDING MOZAMBICAN TAXES

The London-based charity ActionAid has accused the world’s second largest brewer, SABMiller, of using transfer pricing to avoid paying taxes in many countries including Mozambique. According to ActionAid, the Mozambican state could be losing up to 11 million meticais (about 311,000 US dollars, at current exchange rates) per year from these accounting practices.In its report, “Calling Time, why SABMiller should stop dodging taxes in Africa”, ActionAid calculates that SABMiller may be avoiding up to 20 million pounds sterling (31 million US dollars) in tax a year in Africa and India by shifting funds through sister companies based in tax havens.ActionAid makes clear that it is not accusing the brewer of breaking the law. It states that “the lucrative search for ways to pay less, creating complex corporate structures, routing money through opaque tax havens, and employing highly paid professionals to find loopholes, is legal: indeed, it is so common it is accepted as the normal way of doing business. And it gives multinational companies a distinct advantage over their local competitors”.However, ActionAid points out that “there are signs that the tide is turning against tax dodging in developing countries. South Africa’s finance minister has described ‘aggressive tax avoidance’ as ‘a serious cancer eating into the fiscal base of many countries’”.In Mozambique SABMiller is the majority shareholder in Cervejas de Mocambique (CDM – Beers of Mozambique) which has three breweries, in Maputo, Beira and Nampula. ActionAid has looked at its Annual Report for 2009 and has spotted the accounting practices that the SABMiller group uses in many African countries which have the effect of apparently reducing the local subsidiary’s profit and its local tax liability.In its Annual Report, CDM states that it has a contract for “a management agreement with Bevman Services AG for the provision of management services to the Company. An amount of 54,182,554 meticais has been included in costs in respect of these transactions”.The ActionAid report’s author, Martin Hearson, told AIM that by making payments to Bevman, a sister company based in Switzerland, SABMiller avoided paying 6,501,906 meticais to the Mozambican treasury.ActionAid also highlights SABMiller’s practice of registering some of its brands in Holland where royalty payments are taxed at a very low rate. Its subsidiaries in Africa thus have to make royalty payments to the Dutch based SABMiller International BV for the use of brands such as Castle, which are also brewed in Mozambique.The CDM Annual Report refers to a contract for “a licence and distribution agreement with SABMiller International BV for the brewing and/or distribution of beer products other than 2M, Manica and Laurentina (the three Mozambican brands). An amount of 38,339,082 meticais has been included in costs in respect of these transactions”.According to Hearson’s calculations this resulted in an estimated tax revenue loss of 4,600,689 meticais.In total, these two contracts could have resulted in SABMiller reducing its Mozambican tax bill in 2009 by over 11 million meticais.Other funds may also be being shifted away from the Mozambican treasury.CDM’s 2009 Annual Report shows an inter-group payment to a Mauritian company called MUBEX of 170 million meticais, although it is not clear whether any raw materials or plant and equipment were actually sourced in Mauritius.However, the use of MUBEX is highlighted by ActionAid in its report, using purchases by Accra Brewery (a subsidiary of SABMiller) from SABMiller in South Africa as an example, asking:“How would you ship goods from South Africa to Ghana? Ask a school geography student and you would hope to be told to turn right from the Cape and head up Africa’s west coast. Ask a tax planner and he would tell you to make sure you send the paperwork in the opposite direction. In this third type of dodge, goods are procured by Accra Brewery from another SABMiller subsidiary in Mauritius, 7,000km away in the Indian Ocean. “Sensible commercial reasons – including economies of scale and the management of currency and commodity price risks – lie behind the centralisation of SABMiller’s purchasing across Africa. And unsurprisingly for a group with its origins and regional hub in South Africa, for a long time this was done using a South African company, SABEX. Then in 2008 the group created a new company called MUBEX, located 3,000km from SABMiller’s Johannesburg regional office, in Mauritius. Tax – and specifically Mauritius’ maximum effective tax rate for a ‘global business’ company of 3 per cent – must surely have been one reason for locating the operation there”.In a statement SABMiller strongly rejected the allegations made by ActionAid in its report and said that “SABMiller does not engage in aggressive tax planning in any part of its operations, and the report includes a number of flawed and inaccurate assumptions”. It continued “compliance with tax laws underpins all of our corporate governance practices. We actively engage with revenue authorities and we are open and transparent with our affairs. We follow all transfer pricing regulations within the countries in which we operate and the principles of the OECD guidelines”.