A new and prosperous era Mozambique’s natural resource endowment provides the foundation for an exciting future

f ever a country deserved its good fortune, then FRELIMO took complete control of the former After 15 years Mozambique is that country. For the first 20 colony after a transition period, as agreed in the years of the independence it won in 1975, it was Lusaka Accord which recognised Mozambique’s right of economic wracked by a war whose scars are still visible to independence and the terms of the transfer of power. Itoday. After 15 years of economic reforms, recent Within a year of the Portuguese coup, almost all the reforms, discoveries of gas, along with a huge coal sector, will 300,000 Portuguese population had departed. This provide much-needed finance for the Government in hasty exodus left the Mozambican economy in chaos. recent its mission to eradicate poverty and create jobs. Two years later, in 1977, civil war erupted, destroying The Portuguese began colonising what is today what little wealth and physical infrastructure the discoveries Mozambique in the early 16th century, soon Portuguese had left behind. establishing this stretch of the East African coastline as For 13 years, Mozambique was a Cold War of gas, along a trade centre with India. After the end of World War battleground, as the Soviet-backed FRELIMO army II, as in most of Africa, an independence movement fought the US and South African-backed RENAMO with a huge emerged, led by FRELIMO, which fought the rebels. By 1990, the world outside Mozambique Portuguese military regime of Antonio Salazár. For was changing fast: the Soviet Union was collapsing, coal sector, a decade FRELIMO was locked in conflict with the apartheid was crumbling in , and support Portuguese military, which was backed by mercenaries for RENAMO drying up in Washington. That will provide sent in by the neighbouring apartheid regimes of South year, the first direct talks between the FRELIMO Africa and Rhodesia. government and RENAMO were held. In November much-needed The war looked set to end in 1974, when a 1990 a new constitution was adopted. Mozambique bloodless revolution in led by junior military was now a multiparty state, with periodic elections, and finance officers overthrew the military regime: the following guaranteed democratic rights. year Mozambique declared its independence. But Two years later, on 4th October 1992, the UN- Mozambique’s problems were only just beginning. backed Rome General Peace Accords were signed

President of the 10 Republic of Mozambique

FIRST between President and RENAMO National Assembly elections took place at the end The leader . A UN Peacekeeping Force of 2004, with Armando Guebuza winning 64 per cent oversaw a two-year transition to democracy, with the of the popular vote. His opponent, Afonso Dhlakama Government last ONUMOZ contingents departing in early 1995. of RENAMO, received 32 per cent. FRELIMO won Which is when Mozambique’s new day finally 160 seats in Parliament, and a coalition of RENAMO has been very dawned. As part of the peace process, free and fair and several small parties took the 90 remaining seats. elections had already been held in 1994, and which Armando Guebuza was inaugurated as the President responsive to were won by FRELIMO’s Joaquim Chissano. In 1995, of Mozambique on 2nd February 2005. The elections the country joined the Commonwealth, reflecting the represented less change and more continuity in large-scale country’s common cause with its English-speaking Mozambique’s political life. neighbours in contributing to the struggle against In 2009, President Guebuza stood for a second, investors white rule in neighbouring Rhodesia / Zimbabwe and final term, winning 75 per cent of the vote, giving and South Africa. Mozambique faced tremendous FRELIMO 191 seats in Parliament, enough to change challenges in rebuilding the country. the Constitution. He has chosen to respect the current From the mid-1980s the FRELIMO government law, and said that he will step down in 2014. Over his decided to replace its Marxist political, social and two terms in office, Mr Guebuza has faced the challenge economic system with a Western-oriented system. of accommodating a new generation that was not born On 30th November 1990 Mozambique adopted a new in the liberation struggle and that remembers little or constitution that provided for a multiparty political nothing about the 16-year civil war against Renamo. system and exchanged its centrally controlled political Mozambique’s past macroeconomic reforms and economy for a market-oriented one. success in attracting large investment projects have By mid-1995, more than 1.7 million refugees who had given the country an average annual GDP growth rate sought asylum in neighbouring countries had returned of eight per cent over the last decade, the highest in to Mozambique, one of the largest repatriations in Africa over this time period. Foreign direct investment, sub-Saharan Africa; a further four million internally exports, and revenue collection all have increased displaced persons were also returning to their homes. In significantly. Since the late 1990s most state companies December 1999, Mozambique held its second elections have been privatised, with only about one dozen left in since the end of the civil war, again won by FRELIMO. government hands. Two years later, in a move seen as a criticism of other President Guebuza has welcomed investment in so- African leaders’ refusal to relinquish power and allow for called mega projects such as the gas pipeline to South a pluralistic democracy to develop, President Chissano Africa or huge coal mines, but has also expressed said that he would not run for a third term. concern that Mozambique needs to rapidly develop

Former President of the Republic of Mozambique, Joaquim Alberto Chissano 11

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The challenge small and medium-size businesses, both for jobs and as a way of expanding the country’s poverty-fighting to foster the growth of a native managerial class. strategies by empowering individuals and supporting for the next Over the past decade the government has followed groups, ideas and projects. Meanwhile, urban poverty IMF and World Bank guidelines on economic issues. is being addressed through the extension of the Fundo generation The government has until now depended on foreign de Iniciativas Locais to urban districts. donors to finance about 45 per cent of its budget, a Thanks in part to its Commonwealth connections, of leaders is dependency that is likely to decrease as the economy the UK has enjoyed close and consistent relations with continues to grow. Mozambique dating back to the Cold War when it meeting the Under President Guebuza, the Mozambican encouraged the country to become truly non-aligned. business climate continues to improve. That said, sound Mozambique’s relationship was helped by Samora expectations macroeconomic policies and a high-level commitment Machel’s support of the Lancaster House talks in to attracting business are still held back by a bureaucracy 1979 on Rhodesia’s UDI that led to Zimbabwean of the people that remains at times unresponsive to the needs of independence in 1980. President Machel visited the private sector, especially small-to-medium-sized London twice in the early 1980s and his successor enterprises, say local operators. Donors are working Joaquim Chissano three times as President. extensively with the Government to modernise and The UK also provided military training for improve the commercial code, labour law, business Mozambique in the late 1980s as assistance for its registration process, tax system, and land ownership military actions against RENAMO rebels. It also policy. Reform is moving in the right direction. played an important role in convincing the Reagan Since President Guebuza took office, the Ministry of administration in the US not to provide covert Labour and the Ministry of Industry and Commerce military support to RENAMO. In addition to the have taken great strides to make it easier for business. British High Commission and DFID office in Together they have opened one-stop-shops in each , there is a British Council office – the only of the ten provinces to accelerate the process of one in Lusophone Africa. registering a company. An equally impressive high level number of UK Mozambique offers substantial investment and officials have visited Mozambique. HM The Queen commercial opportunities in energy generation made a State Visit in 1999 and the Princess Royal (hydropower, coal, and gas), transportation (road visited three times (including and important visit this construction, rail and port services, airport construction, year). Senior British political figures include Baroness and air transport), resource extraction (natural gas, Amos and the Prime Minister in 2002 and Gordon minerals, timber, and fishing), aquaculture, agriculture/ Brown the Chancellor of the Exchequer in 2004 and horticulture (cereals, cashews, cotton, sugar, premium 2005 and in April 2006. During the 1980s and 1990s vegetables, flowers, and citrus; light industry), and there were also senior Conservative government visits tourism. The Government has been very responsive including by the then Foreign Secretary Geoffrey to large-scale investors, and has created several special Howe, Malcolm Rifkind and Lord Soames. economic zones and export processing zones, some Looking ahead, the next three years will be located in poor and under-developed areas. marked by several political milestones. The much- At the political level, President Guebuza has spent anticipated FRELIMO party convention this year substantial time rebuilding the FRELIMO party has been accompanied by discussions over the future at provincial and local level while decentralising ideological tilt of the party, given the emergence government administration. Local development of a new generation of leaders. The 2013 municipal committees and local officials for the first time have elections will also be highly anticipated and will real power over spending local budgets. The revitalised determine whether the Democratic Movement of party has become an important channel of two-way Mozambique (MDM), an off-shoot of Renamo, can communication, information passing up from the build on its control of two of the largest municipalities bottom, making FRELIMO much more responsive to (Beira and ) and emerge as a serious force in grass roots concerns. Mozambican politics. Reducing poverty remains a priority for President Mozambique remains a country in transition, but one Guebuza. Significant efforts by the Government to that has made huge strides in overcoming its colonial address rural poverty have been relatively successful. heritage, authoritarian excesses after independence, These efforts received a major boost when President and decades of civil strife, managing to remain stable Guebuza came up with the 7 Milhões initiative, which amid political and economic liberalisation. The is a fund given to districts and other regions to boost challenge for the next generation of leaders is meeting local development through funding and support for the expectations of the people as the economy is small business and entrepreneurship at the district level boosted with new investment. F 13

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