Luanda — The construction of a railway heading to Luanda’s new International airport has started four months ago with ground-levelling works from kilometro 30 locality in Viana municipality to Bungo, Luanda Port.

The construction works are being carried out in three fronts and are set to be concluded within 18 months.

The Luanda’s new international airport will have the capacity to provide services to 10 million passengers per year, its partial conclusion and inauguration is due to take place this year.

By Bilal Derso

The Ethiopian Meat and Dairy Industry Development Institute said the country has secured 72 million USD over the last nine months of the fiscal year exporting meat to United Arab Emirates (UAE) and Saudi Arabia.

UAE and Saudi are major importers of Ethiopia’s fresh goat’s meat and mutton, Institute Deputy Director-General Khalifa Hussein told The Ethiopian Herald.

Khalifa further highlighted that 60% of Ethiopian meat makes it way to UAE while 38% to Saudi Arabia and the remaining 2% to other Middle East countries. He noted that the country exports up to 50 tons of meat daily to the two countries.

For his part, Abebaw Mekonen, Secretary-General of the Ethiopian Meat Producers-Exporters Association, said tangible tasks are executed to meet meat market standards equipping the sector with modern laboratory, chilled storage, loading docks and transport as well as certified abattoirs.

He said: “We have managed to make almost all abattoirs across the country implement ISO 22000 food safety management system that helps them meet international standards.”

Consultation forums have also been carried out with suppliers to ensure quality of cattle apart from capacity building trainings offered to workers in abattoirs, Abebaw said.

Besides regulating the market, Abebaw said his Association works in concert with Association of cattle suppliers and the Institute to ensure sustainable meet export.

Ethiopia targets to secure over 150 million USD from meat export in the current budget year.v

By Jan-Philipp Scholz

This Thursday a Milan court is to decide whether to go ahead with criminal proceedings against the oil giant Shell and its Italian partner ENI in connection with the purchase of the rights to a Nigerian oil field.

“Etete can smell the money. If, at 70 years old, he does turn his nose up at 1.2 bilion he is completely certifiable.”

That’s a quote from a confidential email which is embarrassing the oil giant Shell. For years, Shell had strenuously denied that it knew anything about the involvement of convicted money launderer and former Nigerian oil minister Dan Etete in its purchase of the rights to one of Nigeria’s biggest oil fields.

But last week, the British environmentalist and anti-corruption organization, Global Witness, published confidential emails written by a Shell employee. This correspondence, which went right to the top of the Shell management hierarchy, proves that there was a direct link to the convicted Nigerian. After publication, Shell then decided that further clarification of its correspondence was needed. One had to negotiate with Etete “whether one wanted to or not,” it said.

Etete alleged to have distributed bribes

The case, which could soon be the focus of a corruption trial in Italy, dates back to 2011. Shell and the Italian oil giant ENI transferred $1.3 billion (1.2 billion euros) to a back account owned by the Nigerian government. With this payment, the two concerns wanted to secure the rights to one of Africa’s largest oil fields. But a huge share of the money did not end up in Nigeria’s state coffers, it went instead to a company called Malabu which was controlled by Dan Etete. The former oil minister under Nigerian military ruler Sani Abacaha was convicted of money laundering in a separate case in France in 2007.

According to Italian prosecutors and research conducted by Global Witness, Etete was obliged to hand over a substantial fraction of the bribes his company received to high-ranking Nigerian politicians and there is one name that crops up repeatedly. It is Goodluck Jonathan, the former Nigerian president.

On being contacted by DW, representatives from both Shell and ENI declined to be interviewed. Unlike Shell, however, ENI, continued to insist that it only dealt with the Nigerian government authorities and nobody else. In a written statement addressed to DW, the company said that “an independent inquiry commissioned by ENI found no evidence that ENI employees were engaged in corrupt deals in connection with financial transactions, or had any knowledge of such deals through third parties.”

Barnaby Pace from Global Witness views these remarks with suspicion. “Shell and ENI, its Italian partner, knew very well that they had paid the money for the oil field to a convicted money launderer,” Pace told DW. Global Witness activists believe that the oil concerns did not only break the law with their deal, they also swindled the Nigerian population. “Five million people are going hungry in Nigeria at the moment. At the same time, money has been taken away from those who are entitled to it – more than a billion dollars. That is one and a half times the sum which the United Nations says is needed to combat Nigeria’s current humanitarian crisis,” Pace said.

Environmentalists counting on the Italian courts

Authorities in six countries are involved in investigations into the activities of Shell and ENI. More than $100 million in assets has been frozen in Switzerland and the UK. Court proceedings are expected in Nigeria as well as in Italy. Nigeria’s lower house of parliament has already set up a committee to investigate the award of the rights. The oil field in question is OPL 245 and it is estimated to hold 9 billion barrels of crude.

Pace is placing his hopes in the court case in Italy and says Italian prosecutors have been particularly thorough in their preparation of the case.

“They have been able to assemble a lot of evidence,” he said. Cases of this sort in Italy are generally fought through to the very end rather than being settled out of court. “It is one of those rare cases when we could see manager being forced to account for his action in a court of law,” Pace said.

Shortly before the purchase of the rights to OPL 245, Shell agreed to a payment of $30 million to avoid conviction in another case of suspected corruption. At the time, the concern promised to bolster its internal defenses against corruption. That was just a few months before Shell management received the emails about Dan Etete.

HWANGE Colliery Company Ltd has signed off-take agreements with two thermal power stations, which will see it supplying the firms with 400 000 tonnes of coal per month. The 25-year coal supply deals will see Hwange supplying more than 200 000 tonnes of coal per month each to the Zimbabwe Power Company and Lisulu Power, an independent power producer in the Matabeleland North Province, MD Mr Thomas Makore said.

He gave no further details on the off-take agreements but indicated the deals would underpin Hwange’s turnaround programme, which the company has just embarked on.

“We have already entered into a 25-year coal supply agreement with the two companies and we are in the process of finalising the contracts,” said Mr Makore. Zesa Holdings, the parent company of ZPC is working on expanding Hwange Thermal power plant, which will add 600 megawatts of electricity onto the national grid.

Most of the conditions for the release of the $1,2 billion loan for the project from a Chinese bank have been met and the process is now being handled by the Ministry of Finance for the finalisation of the Implementation Agreement, Zesa said recently.

In 2015, Government granted Hwange three new concessions in western area, Lubimbi east and west following concerns that HCCL’s present concessions were running out.

The new concessions, with an estimated underground resource of about one billion tonnes, according to an independent competence report done by SRK Consulting, is expected to increase the life span of the coal mining company by more than 50 years.

The company is in the process of engaging a contractor to do exploration, Mr Makore said recently.

Next week, Hwange will be seeking to enter into structured payment plans with its creditors in a bid to stop litigations against the company and allow it to reconstruct.

The ZSE-listed company owes various creditors in excess of $180 million. A positive outcome of the meeting will enable the company to raise funds for working capital requirements.

The company is looking at ramping up production at its open cast operations to 100 000 tonnes per month and re-open the underground mine by Q3, with production target of 50 000 tonnes.

Hwange is also steadily increasing output after Mota-Engil resumed operations last month.

Mota-Engil signed a five-year contract worth $260 million with Hwange in 2014 and was producing 200 000 tonnes of coal per month before it stopped in June last year over non-payment.

By Jonathan Adengo

Kampala — Uganda’s drive to industrialise must not be at the expense of the environment, a United Nations envoy has said.

The United Nations Development Programme (UNDP) Resident Representative, Ms Rosa Malango, who is also the United Nations Resident Coordinator, has said inclusive green growth is the pathway to sustainable development.

“Any investor who comes to Uganda should know where wetlands are and the laws that govern them,” Ms Malango, said.

The envoy said UNDP supported Uganda to publish a wetlands atlas, detailing location and status of all wetlands, with a version for schools so that their location and importance is learned in education institutions.

She said UNDP would also support the Presidential Initiative for Wetlands that will help to accelerate the delivery of a comprehensive response including relocation of people in wetlands and help them learn new skills and livelihoods.

“We have supported Uganda Mineral Resources Management Project; We want to ensure that oil exploration doesn’t undermine the environment,” Ms Malango said.

She said this while on a guided tour of the Kampala Industrial and Business Park in Namanve, last week.

Ms Rosa Malango, who was together with Dr Arkebe Oqubay, the minister and special advisor to the Prime Minister of Ethiopia at Namanve. Dr Arkebe, was in Uganda at the invitation of UNDP as a key note speaker at the High-Level Dialogue on the country’s economy.

On her part, the new Uganda Investment Authority (UIA) chief executive officer Ms Jolly Kaguhangire, said: “At full capacity, this industrial park will become the biggest industrial hub in Uganda will 296 industries, directly employing 200,000 Ugandans.”

“The industries in the park alone will be contributing over $540 million in taxes per annum at full capacity,” Ms Kaguhangire added in a report presented on her behalf by Mr Hamza Galiwango, the UIA director for land development division.

More funding

The UIA officials, however, asked government to inject $151 million (Shs500 billion) which will be utilised for infrastructure development and help the park operate optimally.

The money is needed to upgrade the industrial roads to bituminous standards, provide high voltage powerlines (132Kv) provide industrial water supply, install fibre optic for Internet, sewerage plant and waste management.

The 2200-acre industrial park is located partly in Wakiso and Mukono districts. According to Mr Galiwango all the land in the industrial park has been allocated to 296 prospective investors for development. Of these 21 industries are operational employing 11,000 Ugandans within the park while 70 companies are under construction and 150 are processing paper work, he explained.

Sharing some of the strategies Ethiopia has under taken to industrialise, Dr Arkebe asked UIA to prioritise the export industries and treat them differently. He also proposed that incentives differ sector by sector.

“Incentives are sweeteners but not a criterion. The best criterion is the cost of doing business; market access, infrastructure, government support and stability,” Dr Arkebe explained.

The Ethiopian minister noted that there should be established a one-stop-centre in the industrial park with all business-related offices and services like; logistics, banking, insurance, water supply, power connection and registration of businesses. In Ethiopia, he said, visas are issued within the industrial park.

“Time is critical. This place (Namanve) was designated as an industrial park in 1997. After 20 years, situations change and you lose opportunities,” Dr Akerbe said.

The minister asked UIA to plan for waste management. “Now that you are in a wetland, you might need to think about the impact in the long term. You will find it quite damaging. The option we have chosen (in Ethiopia) is to be strict; zero discharge technology.”

By Hazla Omar

Arusha — Arusha-based Ilboru High School’s Form Six student Gracious Ephraim has created a solar energy powered human Robot that can walk, turn its head, speak and perform a number of tasks.

Gracious who pursues Physics, Chemistry and Mathematics (PCM) combination said he started working on the prototype multitasking human robot about 12 months ago, using locally available materials as well as simple memory chips for the ‘brain’ The components include an entire Geometrical Set (aluminium box and contents), some wires, tin containers, wire pieces of metal and other materials, all valued at about 200,000/- , which he raised from his own pocket money.

The Robot can bend down to pick two packages and move with the load balanced onto its either arms for a while before laying them down neatly on the ground some distance away through remote programming. Teachers at the school said the student was the only person in the country to build a robot which makes various movements and actually works.

“I am trying to innovate things that can solve problems because for many years, science students in the country did not want to invent, they were all focusing on getting employed but being a scientist is all about devising and making new things.

Tanzania aims at industrialisation meaning that factories and other production lines must work 24 hours, but humans cannot work around the clock, so I envisage to have robots working at night and people during the day, this will also reduce the costs of paying workers overtime,” he pointed out.

The student added that, using robots is all about ensuring high level of effectiveness, revealing that his own maiden robot does things better than some people because when programmed to deposit an item at a particular place it does so with accuracy.

Gracious loves to watch movies like any boy next door, except that his flicks are those about robots, ‘Robocop,’ and ‘Transformers,’ from where he gets additional inspiration.

Regarding his own Robot’s capability to speak, Gracious said he had installed a memory card with recorded voice notes that can be remotely triggered to make the home-made machine reply to specific questions or even sing some songs.

The Head of Physics Department at Ilboru, Mr Pendaeli Daniel described Gracious as a standout student in the class.

“Always in time, and comes up with new things and ideas.We have written a special letter of introduction to enable him introduce his innovation to a number of factories and organisations, where he can learn more and find ways to innovate things to complement the robot operations,” said the teacher

ANALYSISBy Alisha Patel

Within hours of Gordhan’s removal, the controversial $70 billion deal was back on the table.

Widespread protests calling for the resignation of President Jacob Zuma continue apace in South Africa in the wake of last month’s removal of Finance Minister Pravin Gordhan. In a midnight reshuffle on 30 March – dubbed the “night of the long knives” – Zuma stealthily and controversially replaced Gordhan along with his deputy and seven other cabinet ministers.

Zuma’s purported justification for the reshuffle was to better pursue “radical economic transformation”, which he says he will be the focus for the rest of his term. For supporters, this means ending “white monopoly capital” and South Africa’s subservience to the whims of banks, international investors and rating agencies. For opponents, it is a smokescreen for undermining democratic institutions to enable “state capture” and personal enrichment for Zuma and his allies, including the powerful Gupta family.

In response to the reshuffle, two ratings agencies downgraded South Africa’s credit rating to junk status, while thousands have taken to the streets calling on Zuma to step down.

The effects of the controversial reshuffle will be wide-ranging and long-lasting, but one particular issue around which these struggles will converge in the coming months is a huge and contentious nuclear power deal.

This proposed scheme has generated much controversy over the past few years, but its progress was held up by Gordhan and others in government who opposed it. These critics have now been purged, however, and plans for the titanic deal have gathered fresh momentum.

Behind closed doors

According to the government, South Africa will have to turn to nuclear to generate an additional 9,600 megawatts of capacity and ease the country’s reliance on ageing coal-fired plants. The nuclear deal it has proposed to fill this gap is set to be the most expensive tender in South African history and will last for at least 60 years. Although credible government estimates have not yet been provided, it is suggested the project could cost 1 trillion rand (approximately $70 billion).

The government’s support for nuclear comes despite the findings of the Energy Department’s draft 2016 Integrated Resource Plan (IRP), which was itself criticised for lacking independence, transparency and adequate consultation. The report maintains that South Africa’s energy needs will not need to come from nuclear until at least 2037, ten years later the proposed timeframe. It instead encourages the use of clean and/or renewable sources that South Africa has a comparative advantage in, such as gas, solar and wind.

But these recommendations have not stopped Zuma from pursing a nuclear agreement, largely out of the reach of public scrutiny. According to inside sources, contracts have already been drawn up between South Africa and Russia, personally brokered by the president as early as 2012 during a visit to Moscow.

These alleged agreements, made behind closed doors, would reportedly allow for Russian involvement across the entire value-chain of the project. And Russia would apparently have limited accountability in the event of any serious incident. In response to these claims, the South African government has remained coy, referring to a “strategic partnership” between the two countries but offering few details.

Furthermore, in October 2016 Zuma announced that any nuclear deal would no longer be funded by the Department of Energy but by the already heavily-indebted state-owned power utility Eskom. This move was widely perceived to be a strategy to further circumvent parliamentary oversight, intensifying fears over the deal’s lack of transparency and raising suspicions that the programme would bring with it lucrative kickbacks.

Shuffling the pack

While he was at the helm of the treasury, Gordhan could effectively veto the nuclear proposal from progressing. But that all changed following the night of the long knives.

“This reshuffle seems to position pro-nuclear supporters in key decision-making positions within government and seems to lay a strong foundation which is aimed at pushing through nuclear, no matter the cost to the people,” says human and environmental rights activist Kumi Naidoo.

Indeed, in the reshuffle, Gordhan was replaced with the more compliant Malusi Gigaba, while Mmamoloko “Nkhensani” Kubayi, widely seen as a Zuma stooge, became the new Energy Minister.

At the same time, Matshela Koko, a nuclear energy proponent, is acting CEO of Eskom. And his pro-nuclear predecessor, Brian Molefe – who is alleged to have awarded the Gupta family lucrative coal contracts – is now an MP for the ruling African National Congress (ANC).

On taking up his new appointment as Finance Minister last month, it took Gigaba just a few hours to confirm that the multi-billion-dollar nuclear deal was on, saying: “It is not a figment of imagination… it was adopted by cabinet as a programme to implement as we diversify our energy mix and bring on board environment friendly energy generation.”

Confidential documents revealed by the press on 9 April reported that the formal tender process conducted by Eskom is to commence in June.

Is time running out?

Should the nuclear deal go ahead, it would not only be South Africa’s largest tender to date, but also possibly the largest exercise of state capture ever. Stopping the deal will provide a key test for South Africa’s democratic institutions and political culture.

Pressure could come from an increasingly divided ANC as well as a legal challenge against the bill, spearheaded by the NGOs Earthlife Africa and the Southern African Faith Communities’ Environment Institute (SAFCEI). Moreover, Eskom may struggle to raise finance for such a project, despite political will, having suffered another credit rating downgrade after the reshuffle. It now lies well into junk territory, four notches below investment-grade status.

Street protests against Zuma also continue, while he is set to face a no-confidence vote, though this has been delayed as the judiciary decides whether a secret ballot is necessary. Having survived seven votes of no confidence since coming to power, not to mention 783 charges of corruption, it would take significant defections within the ANC to oust the embattled president, who has to date lived up to his ‘Teflon’ nickname.

More important perhaps will be the leadership battle within the ruling ANC that will take shape at the party conference in December. This race is far from over at this point, but Nkosazana Dlamini-Zuma, the president’s ex-wife and favoured candidate, is looking like an increasingly likely successor. She is presumed to be willing to protect Zuma, which in turn will enable him to manage his succession and provide continuity.

Nevertheless, some observers suggest that Zuma and his allies are aware that their dominance over the direction of government may be in danger of coming to an end. It is this, they say, that has led them to accelerate their plans such as the nuclear deal.

According to a journalist who has investigated multiple reports of corruption within South African parastatals, Zuma loyalists are “increasingly determined to capture the state” but “time may be running out for the patronage faction within the ANC”. The journalist, who spoke on condition of anonymity, believes the group’s success in pushing the nuclear deal “will depend on whether they manage to capture the Treasury quickly enough, purging those officials and bureaucrats committed to Gordhan’s cause”. Taking control of state institutions in such a way would certainly not be unprecedented.

Whether those loyalists are successful on this front – and whether those who oppose the deal will be able to mobilise in opposition – will become apparent in the following weeks and months. One thing that has already become clear by recent events, however, is that even the boldest conspiracy theories in South Africa can be proven to be true, underscoring the degree to which the state has already been captured.

By Joseph Hanlon

Bank of Mozambique: Consumption & investment falling

Government statements on the $2 bn secret debt in a parliamentary debate last week on the 2015 state accounts have been interpreted in diametrically opposite ways. Some, including this writer and AIM, read the statements to mean that the government has, in effect, agreed that the debt guarantees are illegal and the debts themselves illegitimate, and has no intention of repaying at least part of the debt. Others, including opposition parties MDM and Renamo, plus respected journalist Aderito Caldeira in /@Verdade/, argue that by including the debt in the budget statement, the state has retrospectively accepted the guarantees and will pay.

At issue are three loans and two bond issues, totalling $2 bn, for three private companies owned by the state and controlled by the security services, SISE. The loans and bonds were agreed in secret in 2013-4 and include dubious government guarantees. Both the Tribunal Administrativo (TA, Auditor General) and a special parliamentary commission have found that the guarantees were granted without authorization of parliament, as required by the constitution, and thus are illegal and unconstitutional.

In the 2015 accounts submitted to parliament on Wednesday 12 April, the government says that the guarantees were issued and that they were “above the budget law”, which appears to be a government confirmation that the guarantees are illegal and unconstitutional. In a statement to parliament on Thursday, Prime Minister Carlos Agostinho do Rosario said “the government reaffirms its commitment to honour repayment of debt that has been proven to have been in the public interest”, adding that “we shall continue to observe a balance between the need to honour debt servicing and the imperative to continue financing priority action for economic and social development”. Arguing, in effect, that some of the debts are not proven to be “in the public interest” is to argue that they are “illegitimate” and the liability of the lending banks, VTB and Credit Suisse, because they made improper loans.

The position is confused because the two initial Eurobond issues, both for the Ematum tuna fishing company, became known in 2014 and were eventually replaced in 2016 by government bonds. In effect, government returned to parliament and retrospectively agreed to honour the guarantees and issue new bonds. The three syndicated loans to MAM and Proindicus remained secret until April 2016; the two companies have not been making repayments but the guarantees have not been called, so government has not been required to say if they will be honoured.

Opposition parties and /@Verdade/ argue that by taking the three loans into the 2015 budget statement, government is repeating what it did with the Ematum bonds, and retrospectively taking responsibility for the loans and the guarantees. Venâncio Mondlane, of the Mozambique Democratic Movement (MDM), described the debts as “illegal, illegitimate and immoral”, and claimed that, by mentioning them in the state accounts, the government “legitimates” the guarantees and “is sanctifying a satanic debt”, and “now we are all obliged to accept this debt”. Renamo MP Ivan Mazanga said “the government wants all Mozambicans to pay these debts”.

In his statement, de Rosario denied this, saying that including them in the budget statement was necessary “to guarantee control and monitoring of the guarantees by the Administrative Tribunal.”

*/Comment: /*Much hinges on the interpretation of debts being repaid if they are “proven to be in the public interest”. I interpret this to mean government will use the Kroll audit report to say that debts were not in the public interest, whereas MDM MP Venâncio Mondlane interprets it to mean the debts will eventually be defined as in the public interest and will be repaid.

De Rosario is probably being intentionally ambiguous. If the debt goes to court or arbitration, under the contracts this will be done in England. But a negotiation involving creditors, banks and Mozambique seems more likely, because their has been bad conduct on both sides which they will not want aired in public. For both domestic political reasons and prudent negotiating tactics, Mozambique may not want to go into those negotiations simply refusing to pay. But de Rosario’s statement seems at least intended to allow the reading that the government is publicly stating that the guarantees are illegal and unconstitutional, and that the loans themselves are “not in the public interest”.

What is ‘illegitimate debt?

The concept of “illegitimate debt”, sometimes also called “odious debt”, evolved in the period before the round of debt cancellations at the start of the millennium. The argument was that banks and other lenders have a fiduciary responsibility to borrowers not to make obviously unwise loans – if a gambler goes to a bank and says ‘I have lost all my money but I am sure I will win next time, lend me money’, then if the bank is foolish enough to lend, it is liable and not the gambler. In periods of surplus capital, such as the 1970s and now, banks pushed developing countries to take loans they did not need – known as “loan pushing”. If banks lend money to poor countries that is not in their interest, then the loan is “illegitimate” and it is the responsibility of the bank, not the poor country.

The argument is that the $2 bn secret loans were a form of “loan pushing”; furthermore the banks, Credit Suisse and VTB, which organised the loans and bonds, failed to carry out the due diligence which would have clearly shown the guarantees to be unconstitutional and illegal, and also failed to take into account Mozambique’s ability to repay. The loans are clearly not in the national interest and were given improperly, and are thus “illegitimate” and the liability of VTB and Credit Suisse, not Mozambique.

Civil society says creditors ‘irresponsible’, so don’t pay

There must be “cancellation or significant reduction in debt owed by the government as a result of the loans to Ematum, Proindicus and MAM. Loans from the IMF should not be used to repay the debts to irresponsible lenders, risking trapping Mozambique in a debt trap. Lenders need to share in the costs of adjustment brought about by their irresponsible actions and the changed economic circumstance of low commodity prices,” declared a large coalition of civil society organisations in a statement published in Savana.

The statement also calls for political leaders to be held accountable for their actions and for the Kroll audit report to be published. “Where the money has gone has to be publicly disclosed for the current crisis to be resolved and before more money can be lent to the Mozambique government. ” The statement was issued by the members of the Fórum de Monitoria do Orçamento (Budget Monitoring Forum), the Grupo Moçambicano da Dívida (Mozambique Debt Group), and the Coligação Transparência e Justiça Fiscal (Fiscal Justice and Transparency Network), as well as various international organizations.

The statement also calls on the government and IMF to agree to no increase in takes and no cuts to essential services that negatively impact low and middle income Mozambicans. It wants megaproject contracts renegotiated to increase the taxes paid and strengthened anti-corruption and public tendering systems. Finally the organisations say there should be “an analysis of the current situation of those in poverty and potential measures to protect those in or near poverty from negative impacts. All actions must be based on ensuring that poverty does not increase, and new actions must show a high potential for reducing poverty.”

Nyusi involved in setting up Proindicus

Leaked correspondence appears to show Filipe Nyusi was directly involved in setting up Proindicus in 2013 when he was defence minister, according to /Canal de Mocambique/ (12 Apr). Proindicus was the first of the three companies to be established, in January 2013, and received the first loan, in February 2013; Proindicus is the “mother company” of the whole project.

The three companies were set up to implement the Integrated Monitoring and Protection System (Sistema Integrado do Monitoria e Proteccao, SIMP) for coastal protection, only approved by the Council of Ministers in December 2013, nearly a year after the first loan was made. Not surprisingly, the letters also show the defence minister heavily involved in writing the SIMP. And in January 2014 Nyusi wrote personally to Finance Minister Manuel Chang to set up the financial structure of Proindicus. https://www.facebook.com/CanalMoz/posts/1336510046418089

Defence Minister Atanasio Salvador M’tumuke told the parliamentary commission that “the Ministry of Defence was not consulted” about the equipment to be purchased, and that what was ordered was inappropriate. But the ministry was clearly involved in the early planning and establishing the companies.

Other Economic News Consumption & investment falling; small interest rate cut

“Indicators of economic activity suggest a continuation of the weakening of economic activity, mitigated by the improvement in external demand,” the Bank of Mozambique said on 10 April. “The outlook continues to be negatively affected by weak domestic demand, sustained by lower consumption and investment, as well as by less favourable financing conditions for the economy.”

The Bank of Mozambique cut the base interest rate a small amount, from 23.25% to 22.75%. In the 10 April announcement, reserve requirements (15.5%) and the interest paid on those reserves (16.25%) were unchanged. The Bank also confirmed that from June it will use a different rate as a “monetary policy rate”. The current rate is the taxa de juro da Facilidade Permanente de Cedencia de Liquidez (FPC) which is the rate that banks pay to borrow from the central bank. The new rate which will be applied from June is an interbank interest rate, taxa do Mercado Monetario Interbancario de Mocambique (taxa MIMO), currently set at 21.75%.

The Bank of Mozambique continues to build up reserves, which exceeded $2 bn in the first week of April, equivalent to 5.3 months of imports (excluding mega-projects).

Mozambique’s currency has appreciated against the US dollar with the rate falling from MT 71 = $1 at the beginning of the year to MT 67 = $1 last week. But the exchange rate with the South African rand is most important because so many imports come from South Africa, and since the beginning of the year that has varied between MT 5.4 = R 1 and MT 4.9 = R 1. This, in turn is due to the volatility of the rand, which has ranged between 12.5 and 14 to the dollar since the beginning of the year, and collapsed recently due to political factors.

Annual inflation in March was 21.6%, but the Bank of Mozambique hopes it will fall to 12% by the end of the year. Domestic debt has risen dramatically with the Bank of Mozambique becoming a major borrower; domestic debt has risen from MT 50 bn at the beginning of the year to MT 88 bn last week.

Standard Bank issued a note on 12 April which predicted a stronger Metical and that by the end of the year the rate of exchange would be 50 Meticais to the dollar. It advised investors to buy local bonds and to sell futures contracts on Meticais because they are pegged at roughly the current rate of the Metical. Standard cut its annual inflation forecast from 12.2% to 10.4%.

*/Comment:/***It would be surprising and disappointing to see the Metical appreciate to Mt 50 = $1, because the current rate of exchange would allow local producers, particularly farmers, to compete more effectively with imports. For example, at the current exchange rate, it would be profitable for the first time to produce maize and rice locally. The biggest problem is the very high interest rates and credit squeeze, which makes it impossible for farmers to borrow money to buy fertilizer and other inputs.

End of small local banks

The minimum capital required for banks was been increased 25-fold, from MT 70 mn ($1 mn) to MT 1,700 mn ($25 mn). The Bank of Mozambique said banks would have three years to comply with the new rule. In addition, the solvency ratio (capital as a proportion of liabilities) is increased from 8% to 12%.

The follows the collapse of two small locally owned banks, Nosso Banco which has been closed, and Moza Banco which is being restructured. This will basically force the merger of small banks and mean that all Mozambican banks will need to be relatively large and foreign controlled.

There are currently 19 banks operating in Mozambique, but only five – Millennium Bim, BCI, Barclays Bank, Standard Bank and Banco Único – can meet the new requirements.

The whistle blowing policy of the Federal Government appears to be paying off as the Economic and Financial Crimes Commission on Wednesday announced that it uncovered foreign currencies and Naira notes to the tune of $43.4 million, £27,800 and N23.2 million at a four-bedroom apartment in Ikoyi, Lagos.

The total amount of money recovered at the current Central Bank exchange rate is over N13 billion.

The operation followed a confidential information received by the Commission’s Lagos office regarding some suspicious movement of bags in and out of a particular apartment in the building.

Another source who is conversant with the apartment indicated that a woman usually appeared on different occasions with ‘Ghana Must Go’ bags, the EFCC said.

“She comes looking haggard, with dirty clothes but her skin didn’t quite match her outward appearance, perhaps a disguise”, the source said. . On getting to the building, operatives who were armed with a search warrant, met the entrance door locked. The guards at the gate explained that nobody resides in the apartment, but some persons come in and out once in a while. The EFCC operatives used minimum force to enter the apartment, the statement said.

Monies were found in two of the four bedroom apartment. Further probe of the wardrobe by operatives in one of the rooms, yielded three fire proof cabinets hidden behind wooden panels of the wardrobe. Upon assessing the content of the cabinets, neatly arranged US Dollars, Pound Sterling and some Naira notes in sealed wrappers were found.

The funds are suspected to be proceeds of unlawful activity while investigations are ongoing‎, the EFCC said.

By Mohammed Shosanya

Lagos — The Bureau De Change Operators of Nigeria says Nigeria’s Naira will exchange below N403 to a dollar this week as the Central Bank of Nigeria continues to inject more forex into the market to mitigate the imbalance in the currency exchange.

The rates closed at N403/$ last week.

The President of the Bureau De Change Operators ,Alhaji Aminu Gwadabe, who expressed the optimism in Lagos yesterday, said the development was due to the review of volumes upward of the proceeds of International Money Transfer Services Operators (IMTSO)and removal of disparity in applicable exchange rates by the apex bank in the bureau de change subsector.

He said: “Following the beginning of the CBN’s injection of liquidity into the interbank market for banks the naira rebounds to an all low of N360/$ from N520/$. However, surprisingly the scenario couldnt last more than 2 weeks despite the continues injection of liquidity into the banking system as the rates began to summersault to a new high of N420/$.