Mozambique

Politics:

• Analysis

  Mozambique politics: Quick View - Assembly passes new electoral law without

  Event

  Mozambique's parliament passed a new bill governing the composition of the electoral authority, Comissao Nacional de Eleicões (CNE), on December 14th.

  Analysis

  The new 13-strong CNE will consist of one judge, one attorney, eight members chosen by the parties in parliament (in proportion to their representation) and three members-including the CNE chairman-designated by independent civil society organisations. Under the agreement, civil society groups will propose candidates to a parliamentary committee, which will then submit a shortlist of 12-16 to be voted on by parliament.

  The ruling party, Frente de Libertacao de Mocambique (Frelimo), and the minor opposition Movimento Democratico de Mocambique (MDM) party voted in favour of the law. The main opposition party, Resistencia Nacional de Mocambique (Renamo), voted against it, after its own counterproposal involving representation from the political parties only-but with more opposition representation-was rejected.

  After several months of stand-off over the CNE's composition, the adoption of this law-as part of a wider electoral legislation package, which also includes a bill on voter registration and one on municipal elections-is a positive development. It should allow municipal elections due in October 2013 to be held on time, and it establishes the legal framework for the 2014 national elections and paves the way for more independent oversight of elections.

  However, achieving legitimate independent supervision will depend upon how the law is executed. Frelimo will automatically appoint five of the 13 members and maintains the capacity to influence the selection of the three civil society members. The outgoing CNE's controversial handling of national elections in 2009-the main reason for the current reform-occurred despite the fact that civil society was represented in the commission, by its chairman among others. Moreover, in the current context of renewed hostility between Frelimo and Renamo, the absence of a consensual law on the CNE will raise the risk of both electoral tensions and an outright election boycott by Renamo.

  December 18, 2012

• Background

  Mozambique: Constitution and institutions

  New democratic constitution

  Mozambique adopted a new constitution in November 1990, to replace the authoritarian one-party state enshrined in the country's first post-independence constitution. The new document separated the functions of the executive, the legislature and the independent judiciary and contained a commitment to multiparty democracy. This provided for an electoral system based on a variant of proportional representation, with a majority voting system for presidential elections and a proportional system for legislative elections, allocating parliamentary seats on the basis of the percentage of national votes received by a party. Both the president and the unicameral 250-seat legislature, the Assembleia da Republica, were to be elected by popular vote every five years.

  The power of the executive remained considerable, however. Three "ministries in the presidency" were created (dealing with economic and social affairs, defence and security, and parliamentary affairs), ostensibly to keep the president in touch with government organs and to help implement presidential initiatives. The ministries were later reduced to two posts, dealing with defence and security affairs and parliamentary and diplomatic affairs. In January 2006 an 18-member Council of State, comprising current and former national leaders and members of parliament, was inaugurated with the aim of providing a non-partisan source of advice to the president.

  Constitutional reform

  An effort to improve civil liberties and entrench other democratic protections in the constitution, which was drafted by Frelimo and passed while the country was still at war, was made in the late 1990s. A new draft presented for public consultation in 1998—after protracted negotiations with Renamo—subsequently collapsed, in part owing to the obstruction and indecision of Renamo in what is now regarded as a lost opportunity. New constitutional amendments were finally accepted in 2004, but they excluded many of the earlier concessions made by Frelimo. However, attempts to replace the country's flag—which sports an AK-47 machine-gun and revolutionary iconography—and the Marxist national anthem with more neutral national symbols were only partially successful. A new anthem has since been adopted, but in 2005 Frelimo's parliamentarians rejected all 119 designs put forward by the public for a new flag.

  State ownership of land is enshrined in the constitution. However, a Land Law passed in 1997 allows private parties to acquire land-use rights, although the legislation does not apply to urban land. The government has drafted new legislation aimed at harmonising the rules on urban land tenure with the needs of urban expansion and development, which it plans to present to the National Assembly in 2007. Measures designed to strengthen community rights to rural land have been watered down by hardliners in the Frelimo party, many of whom have exploited opportunities to acquire land.

  Political decentralisation is weak

  Mozambique is a unitary republic. There are 11 provincial governments, including Maputo City (which has the status of a province), which are non-elected branches of the civil service, with governors appointed by the president. Elected municipal government was introduced in 1998 for 33 major cities and towns as part of reforms to provide representative government and promote the decentralisation of political authority. Renamo boycotted the 1998 elections, a decision regarded as a mistake, even by its supporters. Frelimo again won the November 2003 elections, although Renamo gained control of five cities. However, concerns remain over the government's commitment to this process, particularly after it announced plans in January 2007 to appoint a civil servant to oversee each of the elected councils. Long-delayed plans to establish elected assemblies in each of Mozambique's ten provinces were finally realised in November 2006, after new legislation was approved by the National Assembly. The assemblies will play an advisory role, with responsibility for monitoring the official programme of the provincial governments. The assemblies can be dismissed by the government, subject to approval by the National Assembly. According to the constitution, elections for these assemblies must be held by February 2008, but there is speculation that logistical difficulties—in particular the timing of the rainy season—could make it impossible to meet this deadline.

  The justice system

  The judicial system in Mozambique has for years been close to paralysis. There is a severe shortage of qualified legal personnel and a substantial backlog of cases. Enforcement of contracts and legal redress cannot be assured through the court system. Efforts are being made to address these issues, although many of the problems of the justice system are thought to be immune to substantial improvement for some time to come. Corruption in the justice system and in the state prosecutor's office has played a role in the failure to prosecute criminal activity in a range of high-profile drugs and fraud cases in recent years, most notably the trial of Nyimpine Chissano, the son of the former president, on charges of murdering the journalist Carlos Cardoso in November 2000. The lack of legal reform to date has been taken as an indication that Frelimo itself is divided over the issue; official corruption is believed to extend to senior levels of government and the party. Mr Guebuza's government has indicated that it wants greater progress on this issue.

  April 02, 2007

• Structure

  Mozambique: Political structure

  Official name

  República de Moçambique

  Form of state

  Unitary republic

  Legal system

  Based on Portuguese-Roman law and the 1990 constitution, updated in 2004

  National legislature

  250-member Assembleia da República (parliament) elected by direct, universal suffrage every five years

  National elections

  October 28th 2009 (legislative and presidential); next national, provincial and presidential elections are due in late 2014

  Head of state

  President, chosen by direct universal suffrage

  National government

  The president and his appointed prime minister and Council of Ministers; new cabinet appointed in 2009; last reshuffle in October 2012

  Main political parties

  Frente de Libertação de Moçambique (Frelimo) is the ruling party and holds 191 parliamentary seats; the main opposition party is Resistência Nacional de Moçambique (Renamo; 51 seats); the Movimento Democrático de Moçambique (MDM; 8 seats) was formed in March 2009 with the mayor of Beira, Daviz Simango, as its leader; it is drawing strong support from disaffected Renamo members and is bidding to replace Renamo as the main opposition party; another opposition party, Partido Humanitário de Moçambique (Pahumo), was launched by former Renamo members in April 2010

  President: Armando Guebuza

  Prime minister: Alberto Vaquina

  Ministers in the presidency

  Parliamentary affairs: Adeleaide Amurane

  Social affairs: Feliciano Gundana

  Key ministers

  Agriculture: José Pacheco

  Defence: Filipe Nhussi

  Education: Augusto Jone

  Energy: Salvador Namburete

  Environmental co-ordination: Alcinda Abreu

  Finance: Manuel Chang

  Fisheries: Victor Manuel Borges

  Foreign affairs & co-operation: Oldemiro Baloi

  Health: Alexandre Manguele

  Industry & trade: Armando Inroga

  Interior: Alberto Mondlane

  Justice: Maria Benvinda Levi

  Labour: Helena Taipo

  Mineral resources: Esperança Bias

  Planning & development: Aiuba Cuereneia

  Public works & housing: Cadmiel Muthemba

  Science & technology: Louis Pelembe

  State administration: Lucas Chomera

  Tourism: Carvalho Muária

  Transport & communications: Paulo Zucula

  Women's affairs & social welfare: Iolanda Cintura

  Youth & sport: Fernando Sumbana

  Central bank governor

  Ernesto Gouveia Gove

  December 17, 2012

• Outlook

  Mozambique: Key developments

  Outlook for 2013-17

  • The ruling party, Frente de Libertação de Moçambique (Frelimo), will dominate the political landscape in 2013-17, winning national polls in 2014.
  • The succession to the president, Armando Guebuza, who, according to the constitution, is serving his final term, will be disputed between his allies and other Frelimo factions.
  • The main risks to political stability are that spikes in consumer price inflation or public disappointment with Frelimo could lead to violent disorder.
  • The fiscal deficit will fall over the forecast period (except in 2014, when it will rise owing to election-related expenses) from 6.6% of GDP in 2012 to 5.1% of GDP in 2017, as royalties from mining and natural resources boost revenue.
  • After reaching 7.4% in 2012, economic growth is forecast to average 7.9% a year in 2013-17, driven by the minerals boom and investment in the gas sector. However, turbulent external conditions could weaken investment inflows.
  • After falling to 2.2% in 2012, helped by monetary tightening and favourable food prices, average inflation is expected to edge back up in line with global fuel prices, from 5.5% in 2013 to 6.5% in 2017.
  • The current-account deficit is expected to widen in 2013-14, peaking at 19.8% of GDP in 2014, as foreign investment projects push up imports. It will shrink on the back of growing coal exports in 2015-17, falling to 16.5% of GDP in 2017.

  Review

  • Mozambique's historical opposition party and former rebel group, Resistência Nacional de Moçambique (Renamo), has moved its headquarters to Gorongosa, were it was based during the country's civil war.
  • Renamo and the government have held inconclusive talks over grievances related to the peace agreements that ended Mozambique's civil war in 1992.
  • The IMF has concluded its fifth review under the Policy Support Instrument, commending Mozambique's economic performance and approving of current policies and planned reforms.
  • Details about a draft new mining law, expected to be presented to parliament in early 2013, have not been provided yet, but local ownership of foreign mining firms is likely to be instituted.
  • Authorities have announced that 12 new oil and gas exploration concessions would be offered in a new licensing round, due in 2013.
  • Eurasian Natural Resources Corporation (ENRC), a Kazakh mining firm, has announced plans to build a 1,200-km railway between the coal-rich Tete province and the port of Nacala by 2016, without disclosing estimated costs.

  December 17, 2012

Economy:

• Background

  Mozambique: Education

  Education provision expands rapidly after the civil war

  After independence, the Frelimo government made a strong commitment to providing universal education and healthcare, as access to these services had been severely limited under Portuguese rule. However, progress could not be achieved, as around 60% of the primary school network—roughly 5,700 primary schools—were destroyed or closed during the civil war. Since the end of the conflict there has been a substantial improvement in both the quantity and quality of education provision. As part of the government's poverty reduction strategy, spending on education has risen sharply, reaching 19.8% of budgeted expenditure in 2006. As a result, the number of enrolled students has risen from 1.2m in 1992 to 4.8m in 2006, of whom 4.25m were in primary education. Thanks to these efforts the male literacy rate has risen from 49% in 1990 to 77% in 2004 and the female literacy rate from 18% to 49% over the same period. Overall, the adult literacy has risen to 47% in 2004, from 34% in 1992. However, at least 500,000 children aged between six and 12 are not attending school

  In 2006 the government launched a ten-year Action Plan for Accelerated School Construction, which by the end of its first year had built 526 new schools—452 primary and 74 secondary—creating places for an extra 300,000 pupils. The Ministry for Education estimates the plan's total cost at US$3bn, equivalent to US$300m per year, most of which is expected to be financed by donors. The overall aim is for every Mozambican child to receive full primary education by 2015, in line with the country's Millennium Development Goals (MDGs). As the percentage of children attending school has risen from 50% in 1999 to 83.4% in 2005, the government has a good chance of achieving its ambition.

  Number of schools and pupils
  				% change
  	2003	2004	2005	2004/05
  No. of schools
  Primary level 1	8,071	8,373	8,696	3.9
  Primary level 2	950	1,116	1,320	18.3
  Secondary level 1	125	140	156	11.4
  Secondary level 2	29	30	35	16.7
  Total	9,175	9,659	10,207	5.7
  No. of pupils
  Primary level 1	2,825,971	3,071,564	3,393,677	10.5
  Primary level 2	355,618	409,279	536,403	31.1
  Secondary level 1	141,795	168,798	311,716	84.7
  Secondary level 2	18,291	21,350	44,768	109.7
  Total	3,341,675	3,670,991	4,286,564	16.8
  Sources: Draft Programa Quinquenal do Governo 2006-10

  Download text file (csv format)

  The lack of teachers is a major constraint

  However, the lack of teachers is proving a major constraint on improving educational standards. As student numbers have risen, so has the pupil/teacher ratio, from 62:1 in 1999 to 74:1 in 2005. This is set to worsen as, according to the government, 17% of teachers were infected with HIV/AIDS in 2003, which is expected to lead to the deaths of 9,200 teachers by 2010. In addition, an estimated 44% of primary school teachers have no training.

  To address these issues, in 2007 the government plans to launch the "10 plus 1" plan, which will enable students who complete tenth grade to attend teacher training for only one year before receiving their qualification, rather than the current two years. The government hopes this will increase the number of primary teachers trained each year from 3,500 to 6,000. In addition, the government recruited 9,000 new teachers in 2006, as well as 32,000 "literacy teachers", who will teach 695,000 adults to read and write. Overall, the government plans to double the number of teachers over the next ten years, from an estimated 63,490 (of all levels) in 2005 to 144,295 by 2015, reducing the pupil/teacher ratio to 65:1 in 2010 and 54:1 in 2015.

  Higher education is sparse

  As a result of the paucity of technical and vocational training, there is a serious shortage of skilled labour. Mozambique has two public universities. Eduardo Mondlane University, located in the capital, Maputo, is the largest. The Catholic University of Mozambique was established in 1996 with two faculties, economics and management, in Beira, and law in Nampula. The Pedagogical University in Maputo is a teacher-training college, and there is one private university, the Instituto Superior Politecnico e Universitario. In addition, feasibility studies have been completed for the opening of higher education institutions in the provinces of Manica, Tete and Gaza.

  April 02, 2007

• Structure

  Mozambique: Economic structure

  Data and charts: Annual trends charts

  
  

  

  December 17, 2012

• Outlook

  Mozambique: Country outlook

  Mozambique: Country outlook

  FROM THE ECONOMIST INTELLIGENCE UNIT

  POLITICAL STABILITY: The ruling party, Frente de Libertação de Moçambique (Frelimo), is set to dominate the political and economic landscape throughout the forecast period. The president, Armando Guebuza, has consolidated his authority over the party, although his high-handed style and perceived cronyism have alienated some factions within Frelimo, particularly those allied to the former president, Joachim Chissano. Mr Guebuza is keen to maintain political power after the end of his second and final presidential term in late 2014. Although his plans to remove from the constitution the limit on the number of terms a president can serve met with strong opposition from within his party, Mr Guebuza secured re-election (he stood unopposed) as Frelimo president at a party congress in September 2012. His successor for the state presidency remains uncertain, however, as the Frelimo candidate (who should easily win) needs to be selected by the party's 190-strong Central Committee. Mr Guebuza will seek to put forward a close ally--and one he can influence--in order to keep his hold on power. Such a move will not go unchallenged, however, and rival party factions, which at the party congress managed to retain a significant number of representatives on the Central Committee, could unite behind another candidate. In that scenario, it is unclear whether Mr Guebuza would step down as party president, as he forced Mr Chissano to do in 2005, or whether he would try to stay on and thereby create a parallel centre of power. Although the succession issue will lead to intense manoeuvring and internal tensions, Frelimo's 40-year tradition of unity means that party splits are unlikely. Real renewal within Frelimo should therefore not be expected until the next succession, in 2017 at the earliest.

  ELECTION WATCH: Municipal elections are due in October 2013, but risk being delayed as the new electoral commission, the composition of which has sparked fierce debate between the parties, may not have been appointed by end-2012. The next national elections are not due until late 2014. The historical opposition party, Resistência Nacional de Moçambique (Renamo), is in disarray and many members are frustrated with the leadership of Afonso Dhlakama, who is viewed as being increasingly out of touch. Although it showed signs of unity and resilience at a rare national conference in July 2012, Renamo has to compete with a new challenger, the Movimento Democrático de Moçambique (MDM), to which it is losing talent and support. Facing this divided and enfeebled opposition, Frelimo is expected to win comfortably in 2014, although the MDM's victory in mayoral by-elections in Quelimane in December 2011 indicates that there is an opportunity for the opposition to channel public dissatisfaction.

  INTERNATIONAL RELATIONS: The government will gradually reduce its dependence on aid from donors on the back of a rise in mining royalties and stagnating aid flows, resulting from the economic slowdown in donor economies as well as concerns among some donors about standards of governance in Mozambique. Towards the end of the Economist Intelligence Unit's forecast period mining revenue will have become substantially larger than donor support. Ties with South Africa, Mozambique's main trading partner, will remain strong, driven by foreign direct investment (FDI) inflows and long-standing commercial links. Mozambique will also seek to strengthen relations with its regional partners in the Southern African Development Community, to which it already exports electricity. Strong commercial, political and personal ties will ensure continued close relations with Portugal, whose investors are increasingly turning to Mozambique given the economic difficulties they face at home. Investment from China, Brazil, India and Australia, particularly in railways and mining, will help to strengthen ties with those countries. Recent gas finds will attract major foreign investors in liquefied natural gas (LNG) facilities and related infrastructure, while also bringing forward new trading partners, especially among Asia's major LNG-importing countries.

  POLICY TRENDS: Policy during the early part of the forecast period will continue to be guided by the three-year policy support instrument (PSI) agreed with the IMF in June 2010, as well as the government's five-year strategy paper, Programa Quinquenal do Governo para 2010-14. The PSI aims to keep the primary deficit stable and to guarantee public debt sustainability, while also improving public financial management and banking supervision. The five-year strategy aims to cut poverty, improve social development and foster growth in key labour-intensive sectors, including agriculture, fishing, tourism and transport. Policy focus will gradually shift towards the management of Mozambique's natural resources boom. New resource rents, based on coal mining, will begin to have a significant impact on state revenue from 2013. Although even more lucrative gas extraction in the offshore Rovuma Basin will not begin until after the forecast period, the legal and institutional framework to exploit these resources must be put in place before extraction licences are awarded. The government will also need to co-ordinate the efforts of the public and private sectors to improve infrastructure, upon which the country's mining boom depends. Although the management of the resources bonanza is fraught with risks and some targets may not be met, based on recent performance, including Mozambique's achieving compliance under the Extractive Industries Transparency Initiative in October 2012, we still expect significant progress to be made in this area.

  ECONOMIC GROWTH: After reaching an estimated 7.4% in 2012, real GDP growth is expected to be strong throughout the forecast period. Coal mining and new transport infrastructure will support average real GDP growth of 8% in 2013-17, helped by a moderate recovery in the global economy and increasing FDI inflows. The recent discovery of significant quantities of natural gas offshore is likely to lead to FDI in LNG export facilities, although production is not expected to begin until 2018 at the earliest. Mozambique's traditional sectors will also continue to perform well. Agriculture will benefit from investment in commercial cash crops (including increasingly dynamic agro-business companies) and growth in the traditional smallholder sector, resulting from investment in infrastructure and efforts to raise low agricultural productivity. Transport, communications, tourism, industry and financial services will continue to grow strongly.

  INFLATION: We estimate that annual average inflation, as measured by Maputo's consumer price index, will moderate to 3% in 2012, from 10.4% in 2011, on the back of a relatively good 2011/12 harvest, declining international food prices and monetary tightening in late 2011. Inflation will edge back up to an average of 6.3% in 2013 as a result of solid economic activity, strong inflows of FDI and the more expansionary monetary policy of the Banco de Moçambique (the central bank). These forces are expected to keep prices high after 2013. After moderating to 6% in 2014, inflation will edge back up to 6.2% in 2015 and 6.7% in 2017, in line with rising import prices. Major disruptions to the local or regional food supply could lead to upward revisions to this forecast.

  EXCHANGE RATES: Strong investment inflows and officials' fears about the risk to social stability from imported inflation are likely to override longer-term plans to boost export competitiveness by reducing the metical's overvaluation. We estimate that the metical, having appreciated by 17% against the dollar in 2011, will have strengthened by a further 2.8% in 2012, to an average of MT28.28:US$1. The metical will appreciate further in 2013-17, reaching an average of MT26:US$1 in 2017 on the back of strong investment inflows and growing exports. The major risk to this outlook is that the investment boom will stall amid a global drop in demand for the country's mineral exports.

  EXTERNAL SECTOR: After falling in 2012, the price of aluminium--currently Mozambique's largest source of export revenue--is expected to nudge up steadily throughout the forecast period, and production is expected to remain on a moderately upward trend. Coking and thermal coal exports started in 2011 and will become a major source of revenue, possibly supplanting aluminium as the leading export by the end of the forecast period. Conditional on the development of transport infrastructure, coal export volumes could grow from an estimated 2m-2.5m tonnes in 2012 to over 20m tonnes in 2017, when export receipts from the commodity could approach US$3.5bn. Gas, currently only exported through a crossborder pipeline to South Africa, will become a major source of export earnings after 2017. Agricultural export volumes, especially tobacco, cotton and cashew nuts, are expected to increase in response to government investment in the sector. Overall, we expect total exports to rise from an estimated US$3.6bn in 2012 to US$8bn in 2017, largely on the back of an increase in coal exports.

  November 01, 2012

• Forecast

  Mozambique: 5-year forecast summary

  Outlook for 2013-17: Forecast summary

  Forecast summary
  (% unless otherwise indicated)
  	2012a	2013b	2014b	2015b	2016b	2017b
  Real GDP growth	7.4	8.0	7.8	7.8	8.0	8.0
  Consumer price inflation (av)	2.2	5.5	5.7	6.0	6.2	6.5
  Lending interest rate (%)	18.8	19.0	18.5	18.0	17.5	17.0
  Government balance (% of GDP)	-6.6	-6.5	-7.1	-6.3	-5.6	-5.1
  Exports of goods fob (US$ m)	3,820	4,666	5,180	5,966	7,456	9,067
  Imports of goods fob (US$ m)	-5,578	-6,416	-7,251	-8,149	-9,287	-10,583
  Current-account balance (US$ bn)	-2,481	-3,046	-3,810	-4,465	-4,829	-5,319
  Current-account balance (% of GDP)	-18.2	-18.4	-19.8	-19.7	-17.8	-16.5
  External debt (year-end; US$ bn)	4.9	5.6	6.3	7.1	8.1	9.2
  Exchange rate MT:US$ (av)	28.4	28.2	27.8	27.4	27.0	26.6
  Exchange rate MT:¥100 (av)	35.8	34.1	32.1	30.8	29.3	29.1
  Exchange rate MT:€ (av)	36.5	35.6	34.8	33.9	34.0	33.5
  Exchange rate MT:SDR (av)	43.8	43.0	42.0	41.0	40.5	39.9
  a Economist Intelligence Unit estimates. b Economist Intelligence Unit forecasts.

  Download the numbers in Excel

  Download text file (csv format)

  December 17, 2012

View detailed map

Country Briefing

Land area

799,380 sq km

Population

23m (2012, World Gazetteer estimate)

Main towns

Population, 2012 (World Gazetteer)

Maputo (capital): 1,966,674 (a)

Nampula: 575,587 

Beira: 441,723

Chimoio: 272,875 

Nacala: 230,229 

Quelimane: 212,519 

Tete: 181,806 

Pemba: 174,517 

(a) Including Matola and Maputo province

Climate

Tropical and subtropical

Weather in Maputo (altitude 59 metres)

Hottest month, February, 22-31°C (average daily minimum and maximum); coldest month, July, 13-24°C; driest months, July, August, 13 mm average rainfall; wettest month, January, 130 mm average rainfall

Languages

Portuguese (official) and three main African language groups: Makua-Lomwe, Tsonga and Sena-Nyanja

Measures

Metric system

Currency

Metical (MT)

Time

2 hours ahead of GMT

Public holidays

January 1st (New Year's Day), February 3rd (Heroes' Day), April 7th (Women's Day), May 1st (Labour Day), June 25th (Independence Day), September 7th (Victory Day), September 25th (Armed Forces Day), November 10th (Maputo City Day—Maputo only), December 25th (Family Day)

March 27, 2012