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Mozambique News Online (18) - 3/31/98

Mozambique News Online (18) - 3/31/98

MOZAMBIQUE NEWS ONLINE/MOZAMBIQUE NEWS ONLINE/MOZAMBIQUE NEWS ONLINE

Edition #18 31 March 1998

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A bi-monthly update of news from Mozambique!


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In this edition:
Feature:
MOZAMBICAN DEBT: HOW HEAVY IS THE BURDEN?
Stories:
1. MUNICIPAL ELECTIONS POSTPONED
2. ELECTORAL COMMISSION INVITES PARTIES TO HELP CORRECT ERRORS
3. TIGHT CONTROL ON THE BUDGET
4. McBRIGHT STILL IN CUSTODY
6. MOZAMBIQUE CHOLERA EPIDEMIC SPREADS
7. NO FREE MEDICAL CARE FOR POLICEMEN?
8. BANK SUED FOR FALSE ARREST

Feature:

MOZAMBICAN DEBT: HOW HEAVY IS THE BURDEN?

Mozambique has a foreign debt of more than seven billion US dollars. The previous estimate, published last year, was 5.7 billion dollars.

Mozambican deputy Planning and Finance Minister, Ms Luisa Diogo has confirmed that the country's debt stands at over seven billion dollars but did not disclose the exact amount. However, what she did say was that this figure did not include the debt to the former Soviet Union, since discussions to establish the precise size of this debt were still under away with the Russian authorities. In January, Mozambican and Russian technical teams meeting in Moscow agreed that the debt was two and a half billion dollars. The size of this debt has been in doubt because of discussions over such matters as the exchange rate of the Russian rouble.

The russian side said that it would go along with the decision of the Paris Club, the grouping of major creditor nations, to write off 80 percent of the debt. Luisa Diogo said that the discussions with Russia were far from over. "They now centre on how much debt was "pre cut-off date" and how much post cut-off date," she said.

Final discussions are now under way in Washington for Mozambique's formal entry into the Higly Indebted Poor Countries (HIPC) debt relief initiative designed by the International Monetary fund and the World Bank. The Board of these two finantial institutions agreed in principle that Mozambique was eligible for HIPC treatment in September last year. Ms Diogo said that her ministry was in constant contact with Washington, making final adjustments to finalise numbers in the HIPC document.

Bretton Woods imposes a performance period of 18 months betweeen the "decision point" and the "completion point" whenHIPC debt relief actually takes effect. During this period Mozambique is obliged to maintain strict adherence to targets agreed in negotiations with the World Bank and the IMF. This means that the earliest Mozambique will obtain HIPC relief is late 1999, and not mid or late 1998 as the government had initially hoped. Diogo has also warned that the debt relief might not become available until the year 2000.

Diogo says that Mozambique's aim is that the HIPC write-offs bring down the ratio between the debt stock and exports of goods and services. Assuming an export figure of 400 million dollars, this would mean a debt stock of 800 million US dollars; or a write-off of over 6.5 billion US dollars, which is considerably more than the 80 percent figure mentioned by the Paris Club. As to the debt service ratio of annual interest payments to exports, according to Ms Diogo, Mozambique would naturally like a ratio of zero.She said that the country has an economic opportunity that it could lose if the two sides do not bring the debt down to sustainable levels. She defended the debt-equity swaps that a few creditors have accepted. She said these were advantageous for Mozambique since they transformed debt into investment, which created jobs and has a multiplier effect.

In another development, Luisa Diogo has given reasons for the recent rise in the commodity prices in the country. She said that the factors include devaluation of the national currency, the metical. One US dollar had been exchanging for 11.700 meticais for about one year, until recently when the currency gained strength at 11.575. The deputy minister said that the metical lost ground because of a sudden increase in demand for dollars as a result of Mozambican Muslims making the yearly pilgrimage to Mecca, the Holy City of Islam in Saudi Arabia.

Other factors in the price rises, said Luisa Diogo, are the recent floods in central Mozambique and political concerns due to opposition threats to boycott local governmentpolls in June.

Stories

1. MUNICIPAL ELECTIONS POSTPONED

The first municipal elections in Mozambique,previously scheduled for 29 May, have been postponed to 30 June. This is in response to a threat by the main opposition party, RENAMO, to boycott the polls because of alleged problems in the registration of voters.

The National Electoral Commission says the suspension is meant to correct the abnormalities.

2. ELECTORAL COMMISSION INVITES PARTIES TO HELP CORRECT ERRORS

The National Electoral Commission says that everybody will take part in the correction of errors which occurred during last years's updating of the electoral registration books.

The Commission will invite all political parties to become involved in the exercice. The correcting of the books is expected to continue until mid-April.

However, RENAMO, the main opposition party, is demanding its integration into the electoral administration technical secretariat (STAE), saying that this is to make sure thecorrections are done with impartiality. President Joaquim Chissano said recently that any change to the legally established electoral bodies cannot be made outside the Parliament.

3. TIGHT CONTROL ON THE BUDGET

The Mozambique government has issued a new set of rules on how state bodies should control their bugdets.The move is meant to avoid past situations where staff have gone for months without wages.

Deputy minister of Finance and Planning, Luisa Diogo said that budget officials in each department will have to account for the expenditures of the previous 30 days by the 10thof each month. She said that this arrangement will enable the authorities to see which sectors in which provinces are running short of funds.

Diogo said that money shortages at the start of the year arise from failure by the provinces and sectors to explain in time how they spent the funds from previous budgets.

4McBRIGHT STILL IN CUSTODY

Mozambican and South African authorities have reafirmed their decision not to interfere in the case involving the arrest in Mozambique of senior diplomat Robert Mcbright. He was arrested on suspicion of arms smuggling.

South Africa's Minister of Safety and Security, Sydney Mufamadi, and Police Comissioner George Fivaz, flew to Mozambique to meet the country's foreign and home affairs ministers. After this meeting, Pretoria announced the lifting of Robert Macbright's diplomatic immunity in connection with the case.

A joint statatment issued after the talks says that the two countries are determined to fight cross-border crime. Mr. Mufamadi's spokesman said that the South African government has given its commitment to cooperate fully with authorities in Mozambique to combat arms smuggling.

5.JAPAN PROVIDES FUNDS FOR ECONOMIC AND SOCIAL DEVELOPMENT

Japan has provided US$15 million to Mozambique to help the country finance its economic and social development. Four projects are to benefit under an agreement signed by Mozambique's deputy foreign minister, Hipolito Patricio and Japanese ambassador Asao Tsukahara.

About US$216, 000 will be used to buy dredging equipment needed for work at Mozambique's second port, Beira, inthe central province of Sofala. Six million dollars is to go to improve boat-building facilities and for repairing a dry dock in Quelimane, the capital of the central province of Zambezia.

The money will also cover food production and supply, and to buy rice help towards ending the food shortages caused by recent floods.

6. MOZAMBIQUE CHOLERA EPIDEMIC SPREADS

The cholera epidemic has spread to three districts of central Mozambique's Zambezia province.

The deputy national director for Health, Avertino Barreto, says that the epidemic has also killed two people in the central city of Beira.

The death toll for the disease now stands at 584 countrywide since the outbreak of cholera in August last year. Dr Barreto attributes the low death rate in Zambezia to good management in controlling the disease.

However, he expressed fear that the epidemic may spread to Nampula province in the north and Tete in the north-west.Up to now 5 provinces have been hit by the cholera epidemic: Maputo, Gaza, Sofal, Manica and Zambezia.

7.NO FREE MEDICAL CARE FOR POLICEMEN?

A high-ranking police officer in Mozambique has said that no policeman has a right to free medical care.

The finance director of the Maputo city command, Abrao Munguambe, said that the state grant on this has been cancelled.

His comments contradict a recent statement by Minister of State Administration, Alfredo Gamito. Mr Gamito said in the statement that all state employees are entiled to such rights because one percent of their salaries was deducted and channelled to the Ministry of Health. He said that the benefits are stipulated in a ministerial decree of 1996.

8.BANK SUED FOR FALSE ARREST

A private Mozambican bank may be forced to pay a large sum of money, for illegally detaining a man who tried to cash a cheque.

The incident occurred recently at the Nampula branch of the International Bank of Mozambique (BIM), when Vivaldo Jossai tried to cash a cheque issued in his name. Although the cheque was for a small amount - US$100 - the bank told him to return later. When he did so, the bank staff still did not have the money ready, and asked him to return the following afternoon.

On his third trip to the bank, a private security guard from the ALFA company told Jossaithat he had received orders to arrest him. Jossai was then dragged handcuffed into a bank office and confronted by the commercial manager of the branch.However, it turned out that the problem came down to a discrepancy between the amount written out and the amount in figures. This error was enough for the bank to detain him. He was held in all for over an hour.

Jossai is now demanding compensation of US$10, 000 because it is a crime under Mozambican law to make a citizen's arrest.

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From: AfricaNN@inform-bbs.dk (Africa_news Network) Date: Fri, 03 Apr 1998 07:16:24 +0200 Subject: MOZAMBIQUE NEWS ONLINE #18 Message-ID: <1032150911.3066210@inform-bbs.dk>

Editor: Ali B. Ali-Dinar

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