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COUNTRY REPORT Mozambique Malawi 3rd quarter 1996 The Economist Intelligence Unit 15 Regent Street, London SW1Y 4LR United Kingdom The Economist Intelligence Unit The Economist Intelligence Unit is a specialist publisher serving companies establishing and managing operations across national borders. For over 40 years it has been a source of information on business developments, economic and political trends, government regulations and corporate practice worldwide. The EIU delivers its information in four ways: through subscription products ranging from newsletters to annual reference works; through specific research reports, whether for general release or for particular clients; through electronic publishing; and by organising conferences and roundtables. The firm is a member of The Economist Group. London New York Hong Kong The Economist Intelligence Unit The Economist Intelligence Unit The Economist Intelligence Unit 15 Regent Street The Economist Building 25/F, Dah Sing Financial Centre London 111 West 57th Street 108 Gloucester Road SW1Y 4LR New York Wanchai United Kingdom NY 10019, USA Hong Kong Tel: (44.171) 830 1000 Tel: (1.212) 554 0600 Tel: (852) 2802 7288 Fax: (44.171) 499 9767 Fax: (1.212) 586 1181/2 Fax: (852) 2802 7638 Electronic delivery EIU Electronic Publishing New York: Lou Celi or Lisa Hennessey Tel: (1.212) 554 0600 Fax: (1.212) 586 0248 London: Moya Veitch Tel: (44.171) 830 1007 Fax: (44.171) 830 1023 This publication is available on the following electronic and other media: Online databases CD-ROM Microfilm FT Profile (UK) Knight-Ridder Information World Microfilms Publications (UK) Tel: (44.171) 825 8000 Inc (USA) Tel: (44.171) 266 2202 DIALOG (USA) SilverPlatter (USA) Tel: (1.415) 254 7000 LEXIS-NEXIS (USA) Tel: (1.800) 227 4908 M.A.I.D/Profound (UK) Tel: (44.171) 930 6900 Copyright © 1996 The Economist Intelligence Unit Limited. All rights reserved. Neither this publication nor any part of it may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without the prior permission of The Economist Intelligence Unit Limited. All information in this report is verified to the best of the author’s and the publisher’s ability. However, the EIU does not accept responsibility for any loss arising from reliance on it. ISSN 1351-8089 Symbols for tables “n/a” means not available; “–” means not applicable Printed and distributed by Redhouse Press Ltd, Unit 151, Dartford Trade Park, Dartford, Kent DA1 1QB, UK 1 Summary Mozambique, Malawi 3rd quarter 1996 July 24, 1996 Mozambique Political and economic structures Pages 2-3 Outlook: Despite modest cooperation between political parties, there is re- newed potential for unrest in the run-up to next year’s local elections. Stability will be crucial if renewed investment interest and aid inflows are to be maintained. Pages 4-5 Review: Divisions within the ruling Frelimo party have become increasingly apparent, heightening tensions between Frelimo and Renamo. Religious ten- sions, too, have come to the fore. Donors have supported the government’s economic policy, but have encouraged more action against corruption and further measures to improve the private-sector operating environment. Mozambican businesses have complained of excessively restrictive macro- economic policies. The agricultural harvest has proved to be the largest for many years. There has been interest in the Maputo Corridor and other invest- ment opportunities, but the external sector remains in deficit. Pages 6-15 Malawi Political and economic structures Pages 16-17 Outlook: With the end of the coalition with AFORD, the UDF is short of a parliamentary majority but should be able to maintain effective government. Real GDP growth is forecast at 5% this year and 3% in 1997. Pages 18-20 Review: AFORD has withdrawn from its coalition with the UDF although some of its ministers have remained in the government. The prospects of AFORD and its leader, Chakufwa Chihana, have worsened, while the MCP has gained in credibility. The government has continued with its reforming agenda, although its commitment to fiscal restraint is not proven. The finance minister is optimistic on GDP growth and eager to accelerate the programme of privatisation. The kwacha has been stable. David Whitehead is for sale. Bumper harvests have brought relief to farmers and consumers alike. Leading donors have again endorsed the government’s management of the economy. Pages 20-26 Statistical appendices Pages 27-30 Editors: Gregory Kronsten; Noah Beckwith All queries: Tel: (44.171) 830 1007 Fax: (44.171) 830 1023 EIU Country Report 3rd quarter 1996 © The Economist Intelligence Unit Limited 1996 2 Mozambique Political structure: Mozambique Official name: República de Moçambique Form of state: unitary republic Legal system: based on Portuguese/Roman law and the 1990 constitution National legislature: 250-member Assembleia Nacional (parliament) elected by direct, universal adult suffrage every five years Last elections: October 1994 (legislative and presidential) Next elections due: 1999 (legislative and presidential) Head of state: president, chosen by direct universal suffrage; currently Joaquim Alberto Chissano National government: the president and his appointed prime minister and Council of Ministers; last major cabinet reshuffle 1994 Main political parties: Frente de Libertação de Moçambique (Frelimo) is the main and ruling party; the main opposition group is the former rebel Resistência Nacional de Moçambique (Renamo). There are a host of small parties, but the only group in 1994 to win the 5% of the electoral vote needed to secure parliamentary representation was the União Democrática (UD) Prime minister Pascoal Mocumbi Ministers in the presidency economic & social affairs Eneias Comiche defence & security affairs Almerindo Manhanze parliamentary affairs Francisco Madeira Key ministers agriculture & fisheries Carlos Agostinho de Rosario culture, youth & sports Matheus Katupha education Arnaldo Nhavoto foreign affairs Leonardo Simao health Aurelio Zilhao industry, commerce & tourism Oldemiro Baloi interior Colonel Manuel José Antonio justice José Ibraimo Abudo labour Guilherme Mavila mineral resources & energy John William Kachamila national defence Aguiar Mazula planning & finance Tomás Salomão public works & housing Roberto Costley White social action coordination Alcinda Abreu state administration Alfredo Gamito transport & communications Paulo Muxanga Governor of the Banco de Moçambique Adriano Maleiane EIU Country Report 3rd quarter 1996 © The Economist Intelligence Unit Limited 1996 Mozambique 3 Economic structure: Mozambique Latest available figures Economic indicators 1991 1992 1993 1994 1995a GDP at market prices MT bn 2,056.3 3,125.8 5,843.4 8,652.1 12,600.0 Real GDP growth % 4.9 –0.8 19.3 4.8 3.0 Consumer price inflation % 50.1 58.8 49.8 52.5 40.0 Population m 14.4 14.8 15.6 16.6 16.9 Exports fob $ m 162 139 132 150a 169 Imports cif $ m 899 855 955 1,019a 784 Current accountb $ m –738 –739 –825 –870a –684 Total external debt $ m 4,486 4,934 5,012 5,491 5,518 External debt-service ratio % 17.6 17.9 27.2 23.0 24.0 Cashew nut productionc ’000 tons 31 54 24 29 27 Raw cotton productionc ’000 tons 40 50 47 49 n/a Prawn production ’000 tons 7.7 6.8 7.3 6.6 n/a Exchange rate (av; MT:$) 1,434 2,517 3,874 6,039 9,024d July 19, 1996 MT11,141:$1 Origins of gross domestic product 1993 % of total Components of gross domestic product 1993 % of total Agriculture 26.5 Private consumption 70.2 Industry & fisheries 15.1 Government consumption 16.8 Construction 10.6 Gross domestic investment 65.5 Transport & communications 14.4 Exports of goods & services 21.3 Commerce & others 33.4 Imports of goods & services –73.8 GDP at factor cost 100.0 GDP at market prices 100.0 Principal exports 1993 $ m Principal imports 1990 $ m Prawns 68.8 Consumer goods 337.8 Cotton 11.1 Equipment 200.7 Cashew nuts 8.2 Raw materials (excl oil) 159.5 Copra 2.5 Oil & products 95.9 Spare parts 83.6 Main destinations of exports 1993 % of total Main origins of imports 1993 % of total Portugal 17.1 France 12.1 Spain 16.1 USA 8.7 India 9.2 Saudi Arabia 6.7 Japan 8.3 Zimbabwe 6.3 a Official estimates. b Excluding transfers. c Marketed production. d Actual. EIU Country Report 3rd quarter 1996 © The Economist Intelligence Unit Limited 1996 4 Mozambique Mozambique Outlook The pattern is set— The political themes which are set to dominate the coming quarters into early 1997 are clear. The ruling Frente de Libertação de Moçambique (Frelimo) will remain intact, but discontent within its ranks will become more pronounced; a split is unlikely at the moment. The squabbles between Frelimo and the Resistência Nacional de Moçambique (Renamo) will also persist. Some issues such as dual administration and the refusal by Renamo to allow state ap- pointed teachers into certain central districts will be gradually resolved by compromise. Others, namely government interdiction of Renamo repre- sentatives on state bodies like the new national defence and security council (CNDS; see The political scene), will remain unresolved so long as Frelimo refuses to consider a government of national unity. In addition, the Frelimo- Renamo quarrel over increasing Christian/Islamic tensions will persist. —and the instability is Slow and uneven economic growth and the lack of a coherent and popular confinable— government programme mean that a variety of social, religious and political tensions will challenge the rhetoric of peace and democracy. Banditry on the roads will preserve an atmosphere of uneasiness. Groups of the “forgotten” will protest, some causing more disruption than others. The victims of Operação Produção, in which young men caught without proper identity and work papers were rounded up and dispatched to distant state farms in the early 1980s, are reminding people that their return to the capital, Maputo, has yet to be arranged.
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