Business News Mozambique

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1 Gabinete para o Fomento Económico Moçamique-Alemanha Southern African-German Chamber of Commerce and Industry Business News Mozambique I. GENERAL INFORMATION Mozambique passes election reforms in peace progress The Mozambican parliament has passed electoral reforms putting back on track municipal voting due to be held on October 10, in the latest step of peace negotiations. The reforms, passed recently, secured the decentralisation of power that has been a sticking point in talks between the government and Renamo, the rebel group which is also an opposition party. Disagreement over another issue in the peace process disarmament of Renamo rebel fighters had threatened to delay the local elections. But President Filipe Nyusi and opposition Renamo leader Ossufo Momade recently announced a preliminary deal over the disarmament and integration of former rebels into the police and army. (O Pais/Notícias/AFP) Ethiopian Airlines to start domestic flights in Mozambique within two months Ethiopian Airlines is expected to start regular domestic flights in Mozambique in one or two months, João de Abreu, Chairman of the Board of Directors of the Civil Aviation Institute of Mozambique (IACM), has told Noticias. According to de Abreu, the airline has already submitted the necessary documents to obtain IACM certification, and is in the third of five phases required to obtain operator certificate in Mozambique. João de Abreu said the Phase Three evaluation is the most important, since it is this stage in which the complete manuals and documents are checked, and in which the company indicates its headquarters. The next two phases concern demonstrating the ability to comply with safety procedures on an experimental flight and the formal delivery of the air certificate, authorising the company to fly in Mozambique. The entry of Ethiopian Airlines into the domestic passenger transport market is the result of a tender for domestic routes launched by the Mozambican authorities last year, in which companies such as Solenta (which already operates in partnership with Fastjet), CFM, Malawian Airlines, LAM and MEX also qualified. Malawian Airlines was later disqualified for failing to comply with additional procedures within 180 days. In conversation with Noticias, IACM s PCA questioned the role of MEX, which has recently been operating routes previously operated by LAM but without expanding into new routes as planned.(noticias) II. ECONOMIC SITUATION Mozambique, other Portuguese-speaking African countries and Timor-Leste receive 26 million euros from the European Union The Portuguese-speaking African countries and Timor-Leste (PALOP-TL) will have access to 26 million euros provided by the European Union (EU) to support two projects to promote employment in the cultural sector and reforms in the management of public finances, which was signed on Wednesday on the island of Sal in Cabo Verde (Cape Verde), the EU delegation in the archipelago said. The first project focuses on the performing arts, including music, dance and theatre and will strengthen technical training in the sector, increase the access of cultural products from PALOP-TL countries to national, regional and international markets and support the creation and diffusion of literary publications of the region mainly to children and young people. The project on public finance management systems in the PALOP-TL will consolidate the initiatives of the supreme public finance control institutions, including civil society, to improve accountability, efficiency and transparency of public finance systems in the six countries Angola, Cabo Verde, Guinea Bissau, Mozambique, Sao Tome and Principe and Timor-Leste. This support is provided through the 11th European Development Fund and its ultimate objective is to contribute to more inclusive and sustainable growth of those six countries. The documents were signed on the sidelines of the 12th Summit of Heads of State and Government of the Community of Portuguese Speaking Countries (CPLP), which decided that the 13th Summit will take place in Angola in 2020 and elected Portuguese ambassador Francisco Ribeiro Teles as the institution s new executive secretary. (Macauhub) Anschrift Anschrift in Deutschland Telefon Telefax info@maputo.diplo.de Rua Damião de Gois, 506 Caixa Postal 1595 Maputo / Moçambique Auswärtiges Amt Für Botschaft Maputo Berlin (+258) (+258) Internet

2 Mozambique s first quarter exports total an estimated US$1.1 billion Mozambican exports generated about US$1.1 billion in the first three months of this year, an increase of 19.7 percent over the same period last year. The Economic Environment report published June by the National Institute of Statistics in June reveals India as the country s largest customer in this period, absorbing percent of exports. The Asian country imported coke, semi-coke and coal from Mozambique. South Africa comes second, importing energy, oil gas, aluminium and bananas from the country. After South Africa come China, Singapore and the United Arab Emirates. First quarter imports rose 6 percent over last year s figure, absorbing US$1.5 billion. South Africa was Mozambique s largest supplier in this period, with Mozambique importing products such as iron bars, corn, tractors and organic agents. The next-largest source of imports is China, which sold Mozambique products such as cellphones, rice and tires. The Netherlands, India and Singapore are prominent among other suppliers, selling medicines, automobiles and electrical supplies. (O País) Mozambique: Government assesses legality of domestic debt Domestic public debt grew by 21.9 percent from 2016 to 2017, reaching a cumulative total of more than billion meticais. But some of it may not be legal. The Mozambican government is carrying out a process to establish the legality of the state s domestic debt to suppliers of goods and services, a reliable source at the National Treasury Directorate (DNT) has told O País. The government department attached to the Ministry of Economy and Finance (MEF), believes that this exercise may leave the total balance of domestic debt much smaller, and have a significant impact on domestic public debt in the coming years. This will be the second time that Filipe Nyusi s government has carried out a survey of domestic public debt. In 2017, suppliers of various goods and services to the state were checked for the years prior to 2016, but the result of that exercise is still under wraps. The growth of domestic debt, mainly in 2017, is justified by the transition from the balance of Treasury Bills from 2016 to 2017, amounting to 21.6 billion meticais, as well as the issuance of Treasury Bonds in the amount of 11.4 billion meticais for financing the budget deficit and also an amount of 7.4 billion meticais corresponding to the regularisation of the debt of public entities through securitisation. Accumulated public debt at the end of the 2017 fiscal year, excluding guarantees, amounted to 661,369.8 million meticais, corresponding to approximately 81.8 percent of the gross domestic product, of which 554,470.2 million meticais correspond to foreign debt and 106,899.6 million meticais domestic debt. (O País) III. SECTORS MINERAL RESOURCES Mozambique approves contract models for 5th licencing round of oil prospecting this week The Mozambican government will this week approve the contract models for the companies that won the fifth international oil prospecting competition in the country. Tavares Martinho, the exploration and production administrator at Empresa Nacional de Hidrocarbonetos (ENH), the company that manages the Mozambican state s shares in the sector, told Newspaper Notícias recently that the first concession contracts would be signed in August. For the fifth international tender for research, exploration and exploitation of hydrocarbons, the consortia selected were ENI Mozambico S.p.A, for area A5-A located in the Angoche basin; ExxonMobil E & P Mozambique Offshore Ltd, for area A5-B, located in the Angoche basin, and areas A5-C and A5-D located in the Zambezi basin. Tavares Martinho added that the concession contracts would attract more than US$3 billion (2.5 billion Euros) over eight years, of which US$700 million (590 million Euros) would be invested in the first four. The fifth licensing round for oil and gas exploration and exploitation in Mozambique was launched in London in October (Lusa) ExxonMobil Group plans to expand natural gas project in Mozambique US group ExxonMobil plans to expand its natural gas project in the Rovuma basin, in Mozambique, by about 50% of what was previously planned to reduce costs, group spokeswoman Julie King said in response to questions from the Reuters news agency. King said that the expansion of the natural gas processing and liquefaction plants will reduce the unit cost of the project, thereby ensuring that the gas to be extracted in Area 4 of the Rovuma basin is globally competitive. Recently, Mozambique Rovuma Venture presented to the Mozambican government the development plan for the first phase of the Rovuma LNG project, which will extract, liquefy and sell natural gas from the Mamba fields. The plan presents the detailed design and construction of two natural gas liquefaction units, each with a capacity to process 7.6 million tons of gas per year. The Rovuma LNG project is operated by Mozambique Rovuma Ventures, a partnership owned by ExxonMobil, ENI and the China National Petroleum Corporation groups, which jointly control 70% of the Area 4 block, the remaining 30% is split equally between Portuguese group Galp Energia, South Korea s Kogas and Mozambican state-owned Empresa Nacional de Hidrocarbonetos. (Macauhub) Construction of floating platform to extract Mozambican natural gas to begin in September Construction of the floating platform that will serve as the base for extracting and liquifying natural gas in the Area 4 block of northern Mozambique s Rovuma Basin will begin in September, reports the Upstream Online specialised portal. The portal cites a source from the South Korean shipbuilding company Samsung Heavy Industries (SHI), indicating that a decision had been made to begin cutting steel plate for the hull in September. The platform s construction was awarded in May 2017 to a consortium formed by Samsung Heavy Industries, France s Technip and Japan s JGC. It will be 439 metres long and 65 metres wide, have a draught of 38.5 metres and weigh 210,000 tons. The Coral field was discovered by ENI in 2012 and contains nearly 450 billion cubic metres (16 trillion cubic feet) of natural gas. The first phase, expected to get underway in 2021, should see 5 trillion cubic feet extracted and processed. The 2

3 participants in the Area 4 block are Mozambique Rovuma Ventures, a partnership between the ExxonMobil, ENI and China National Petroleum Corporation groups, which together control 70 percent, with the remaining 30 percent divided in equal parts between Portugal s Galp Energia, South Korea s Kogas and Mozambique s state-owned Empresa Nacional de Hidrocarbonetos. (Macauhub) Mozambique - Xtract Resources increases gold production The British-based mining company Xtract Resources announced recently that in the second quarter of the year it mined 42 per cent more gold than in the previous quarter at its Manica gold project. The concession is situated four kilometres north of the central Mozambican town of Vila Manica, near the border with Zimbabwe. Production of alluvial gold increased to 1,703 ounces. At today s gold price of 1,242 US dollars an ounce, this would bring in revenue of over two million dollars. The company is paying production tax at a rate of six per cent of the value of total production. In the first quarter of this year, this came to 76,118 dollars. This rose to 104,448 dollars in the second quarter. In addition, land resettlement costs rose from 36,000 dollars in the first quarter to 62,437 dollars in the second quarter. The Manica gold project covers 46 square kilometres and contains both hard rock and alluvial deposits. (AIM) Mozambique: Canadian company grabs 1000 sq km of rubies A new Canadian mining company, Fura Gems, has taken over the mining licences of two other companies, Mustang and Regius, to become with largest holder of ruby land in Mozambique, with 1,104 sq km. The land adjoins the successful and controversial 340 sq km Gemfields mines. The Fura 16 July and 25 January statements have maps of the ruby areas: The ruby areas are in Montepuez and the Fura team had previously been working on the Gemfields project. Gemfields is subject to legal action in London for alleged human rights violations. Fura says its nine mining concessions are 20%-35% owned by local partners but no details are given. Former governor and public works minister Felizio Zacarias is chair and Mozambique representative on the Regius group. Zacarias, foreign minister (and former Cabo Delgado governor) Jose Pacheco, and Maputo mayor David Simango own a holding company Conjane with interests in a number of mining ventures. All three are linked to former President Armando Guebuza. Another Zacarias company is Montepuez Mineral Resources. Montepuez Ruby Mining (MRM) is owned 25% by Mwiriti, controlled by Frelimo political commission member Raimundo Pachinuapa, and 75% by a private equity company, Pallinghurst, which took over the previous owner Gemfields last year, but plans to continue using the Gemfields name. Rubies and other gemstones had been mined by small scale local and migrant miners, who are pushed off their mines when they are discovered by the big companies, which then claim the land. Thus the ruby mines generate significant wealth for Frelimo elite and obscure foreign companies, and some taxes for Mozambique. But local communities lose out, with fewer jobs and less income because small scale miners are put out of work. Encouraged by the IMF, World Bank and donors, Mozambique s government has given priority to encouraging foreign investment, particularly in mineral-energy projects, and generating tax revenue (and profits for the domestic top 0.1%, who are mainly in the Frelimo elite). Little attention has been paid to development and benefitting local people with jobs and markets, and local business through contracts. Mining and gas companies give lip service to local content and employing local people, but then say there are no local companies which can meet their high standards and regular supply requirements, and that local people do not have qualifications. Creating labour skills and competent small and medium businesses can be done in Mozambique as we showed in our book Chickens and Beer, but it requires three to five years of intensive support and training.the gas companies have known for five years that they would need tens of thousands of workers, who will need to be fed, and that basic building, driving and machinery skills would be needed. But there have been no apprenticeship programmes and no business development programmes because there was no pressure from government. (News reports & clippings) AGRICULTURE AND FISHERY Rice processing factory under construction in Cabo Delgado A rice processing factory is to be opened in the northern Mozambican province of Cabo Delgado later this year, with construction being funded by the World Bank through a grant of two million US dollars. The factory is in the village of Bilibiza in Quissanga district, which is the centre of one of the largest cereal producing regions in the province. The village is near a large lake which provides a permanent water supply. According to the newspaper O Pais, the processing plant will be owned by a local association called United Brothers and is expected to begin operations in November. The association has already developed a brand and has a market for the rice. However, the plant may be forced to run at below the installed capacity until the market for its product is grown. The project falls under the Mozambican government s Conservation Areas for Biodiversity and Development Project, known as Mozbio. Mozbio receives funds from the World Bank through its International Development Association (IDA) and the Global Environment Facility (GEF). One of its foci is preserving the Quirimbas National Park through creating alternative sources of income for the 160,000 people who live in the area and rely exclusively on natural resources. (AIM) Mozambique - IFAD loan for rural entrepreneurs ratified The Mozambican government recently ratified an agreement under which the International Fund for Agricultural Development (IFAD) will provide a line of credit of 62.1 million US dollars intended for the financial empowerment of 288,000 Mozambicans involved in farming, fishing and the development of micro, small and medium enterprises in the rural areas. Announcing the ratification of the agreement, which was signed on 12 June in Rome, where IFAD is headquartered, the government spokesperson, Deputy Minister of Culture and Tourism Ana Comoana, said this fund has no time limit. Speaking to reporters at the end of the weekly meeting of the Council of Ministers (Cabinet), she said the fund created by the IFAD line of credit will be rotating that is, when the beneficiaries repay their loans, the money can be lent out again. The idea, Comoana added, is that the fund should last for many years. Rural entrepreneurs who have already drafted their projects can now submit them to the local administrators. The project, known as Rural 3

4 Enterprise, is far from the first of its kind. In fact there have been repeated attempts to kick-start the rural economy through loans, which have largely failed because beneficiaries are unable or unwilling to repay the money. The same fate would not befall the IFAD credit, Comoana said, because the government would provide the beneficiaries with technical support, and build up their capacity to manage projects. She thus assumed that previous loan schemes failed for technical reason and the inexperience of the borrowers, rather than because the beneficiaries never had any intention of repaying the money. (AIM) Government saves 33 million meticais through food production in jails The Government has saved more than 33.4 million meticais thanks to the implementation of a programme transforming penitentiary establishments into food production centres. In fact, according to the Minister of Justice, Constitutional and Religious Affairs, Joaquim Veríssimo, the programme is now a reality in all penitentiary units and open detention centres. The minister was speaking in Maputo recently at the opening of a symposium held under the motto Application of the Mandela Rules: the Road to Improving Correctional Services and Penitentiaries in Africa, which is promoting the implementation of minimum rules for treatment of prisoners known as Mandela Rules. Veríssimo said that the measure, which is included in the government s Five-Year Programme, prioritises the improvement of conditions in penitentiaries, with an emphasis on diet, health care, and the implementation of alternative to prison sentences. In the context of alternative sentences aimed at tackling the problem of prison overcrowding, the government has been building penitentiary establishments, rehabilitating prison blocks, and conducting trial campaigns to speed up procedures, the minister said. Mozambique has about 20,037 prisoners nationwide, and the symposium preceded today s launch of Africa Prisons Day, which was in the past celebrated on 26 September but has now been moved to July 18 in honour of late South African President and Nobel Peace Prize winner Nelson Mandela, who spent decades in prison under the apartheid regime. The one-day symposium discussed topics such as the dignity of prisoners as human beings; prisoners health and health care; access to legal representation and speedy trial and the training of personnel. The event is organised by the National Penitentiary Service (SERNAP) in its functions as chair of African Correctional Services Association (ACSA) and in coordination with the United Nations Office on Drugs and Crime (UNODC). (Noticias/Savana) INFRASTRUCTURE AND ENERGY Germans support school construction in Mozambique Over the last three decades, a school in Germany has helped finance the building of classrooms and the purchase of school equipment in Manica and Maputo in central and southern Mozambique. With help from the students and teachers at a school in Hungen, a small town in Hessen, central Germany, Josina Machel Secondary School in Gondola has had an additional 11 classrooms, chemistry, physics and biology laboratories and shower rooms built, as well as a library and a computer room equipped with 30 computers. Agathe Venedey-Grenda is the representative of the group of Germans involved in the social project, which has over the last three decades supported schools in Mozambique with money raised from private donors and the German Ministry for Cooperation. The governor of Manica, Alberto Ricardo Mondlane, praised the students initiative, while also emphasising the role of government. The rehabilitation and expansion of the Josina Machel Secondary School in Gondola assisted by the donors in Hungen cost 19 million meticais (more than EUR 270,000).(Deustche Welle) EN1 road maintenance to begin shortly The Mozambican Public Works Minister João Machatine revealed recently that the maintenance work on the country s north-south highway (EN1) will begin in about six weeks. Speaking in an interview with AIM, the Minister explained that the work will cover the section between Pambara in the southern province of Inhambane and Caia in the central province of Sofala. This covers a distance of 696 kilometres. Interviewed at the end of a working visit to the northern province of Nampula, Machatine said this section of the EN1 is in a highly degraded state which makes it difficult to drive on. This leads to damaged vehicles and cargo. The deadline for bids for the section on to Caia closes on 27 July. He added that the winners of the tenders will be publicly announced. Since the state does not have the funds to pay for the regular maintenance needed, the roads deteriorate until they are almost impassable. This has led the government to seek a different solution which is more likely to lead to the roads being properly maintained. Thus, the Minister talked about the plans to lease out sections of the EN1 to private operators. This would mean that the operator would maintain the road, and collects money from the users through toll gates. However, he warned that the government needs to be careful in advancing the project in order to protect the public interest. During his three-day tour of Nampula, Machatine visited the site where the road between Naguema and Mossuril was cut when the bridge was destroyed by floodwaters at the end of last year. Work on rebuilding the bridge will begin before the end of the month at a cost of 11.5 million meticais (about 197,000 US dollars at today s exchange rate). Machatine added that his ministry is evaluating proposals to Tarmac the road along the entire 25-kilometre long section. (AIM) Commercial development for Maputo, Beira and Nacala airports In Nacala, the government wishes to see the construction of a hotel, a shopping centre, and a renewable energy plant. In Beira, the government is looking for an investor to construct and operate a three-star hotel and a petrol station. At Maputo International Airport there is the opportunity to construct a shopping centre comparable to the 'Baía Mall', a petrol station, and business apartments.file photo of Nacala airport: Jornal Domingo. The Mozambican Ministry of Transport and Communications plans to expand the airports of Maputo, Beira, and Nacala to transform them into centres for commerce. According to a report in the weekly newspaper Domingo, an international tender was launched for the concession, construction, development, and operation of commercial infrastructure at the airports. The Ministry has invited interested parties to express their interest in entering into partnerships for the development and 4

5 operation of hotels and leisure activities, business and entertainment centres, and renewable energy sources. The report states that at Maputo International Airport there is the opportunity to construct a shopping centre comparable to the Baía Mall which is located on the Maputo coastal road, a petrol station, and business apartments. In Beira, the government is looking for an investor to construct and operate a three-star hotel and a petrol station. Meanwhile, in Nacala the government wishes to see the construction of a hotel, a shopping centre, and a renewable energy plant. Emanuel Chaves, the chief executive of the publicly owned airports company (ADM), is tasked with pushing forward real estate projects in Maputo, Beira, Nampula, and Nacala. He told that paper that plans are being drawn up for these projects and for the former airport at Costa do Sol in Maputo. The Costa do Sol project is being implemented in partnership with a Mozambican real estate agency. (AIM) Government to subsidise rural electrification The Mozambican government has reiterated that it will bear the costs of electrification in rural areas where the project would otherwise not be financially viable. Speaking at a seminar in Maputo, the chairperson of the publicly owned electricity company, EDM, explained that under the current business model losses from the social component of projects often erode the gains from the commercial element leaving an unsustainable situation. Malaga stressed that rural electrification will continue because electricity is a mechanism for social inclusion. Therefore, the government and EDM have set a goal of providing universal access to electricity by This will involve bringing electricity to communities whose consumption would not justify the required investment in transmission lines and other equipment. In these cases, the government will step in to provide additional funding. He revealed EDM s clients owe the company over a billion meticais (just under 17 million US dollars at today s exchange rate). Of this amount around sixty per cent is owed by social consumers. The seminar discussed new procurement regulations which centralise the process for contracting services and purchasing goods, offering greater transparency and credibility. According to Fatima Artur, EDM s executive board member for personal and corporate services, the model presented to funders combines various international methodologies. She argued that EDM will make large savings through refining the method for contracting supplies. Whilst EDM s customers owe around 17 million dollars in unpaid bills, the debt owed by the Zambian electricity company (ZESCO) is considerably higher. At the end of June EDM spokesperson, Luis Amado, revealed that EDM had interrupted the supply of power to ZESCO because the debt had reached 70 million dollars. EDM is also owed several million dollars by the Zimbabwean electricity authority (ZESA). However, ZESA has agreed to pay off this debt by supplying electricity transformers to EDM. (AIM) TRADE/RETAIL Mozambique launches National Trade Facilitation Committee The Mozambican government today launches its new National Trade Facilitation Committee (NTFC), an agency that will serve to stimulate exports and imports into the country, an official source has told the Lusa news agency. The agency forms part of the implementation of the Trade Facilitation Agreement of the World Trade Organisation, of which Mozambique is a member, the Ministry of Industry and Trade of Mozambique source explained. The launch ceremony will be attended by the Minister of Industry and Commerce, Ragendra de Sousa, the President of the Confederation of Economic Associations, Agostinho Vuma, and the head of Trade Facilitation at the United Nations Conference on Trade and Development (UNCTAD). (Lusa/O país/noticias) FINANCE Mozambican Metical rises slightly against the Euro, US dollar The Mozambican currency appreciated against the Euro and against the US dollar over the last week, according to central bank average exchange rates, followed by Lusa. The Euro was bought on average in the last week ( ) at Meticais, 34 cents of the Metical cheaper than in the previous week. The sale was made at Meticais per Euro, 34 cents of the Metical cheaper. The daily average purchase price of the Euro ranged between and Meticais, while the asking price ranged between and Meticais. In relation to the US dollar, the currency used to calculate the reference exchange rates for other currencies in Mozambique, the purchase was made at Meticais, 42 cents of the Metical cheaper than in the previous week. The sale was made at Meticais per US dollar, 42 cents of the metical less. The daily average of the purchase price of the US dollar varied between and Meticais, while the sale price ranged between and Meticais. (Banco de Moçambique) Mozambique: Prime rate unchanged at 22.5% in July, down 5.25 points on year Mozambique s prime rate, the country s benchmark interest rate, was kept unchanged at 22.5% in July, the Bank of Mozambique, the country s central bank, and the Mozambican Association of Banks (AMB) announced in a joint statement recently. Since the prime rate was instituted in June last year, the rate has been reduced by 5.25 percentage points. The decision to create the prime rate resulted from an agreement reached on 17 May last year between the central bank and AMB that aimed at eliminating the proliferation of benchmark lending rates. It took effect on 1 June of The objective was for all credit operations to be based on a single rate, to which would be added a margin (spread), that would be added or subtracted from the prime rate according to the risk analysis for each contract, its investors said at the time. A table released on Tuesday by the AMB and central bank shows the maximum spread of 20 lending institutions, with this table this being unchanged from June. Among the five leading banks, the spread applied ranges between 9.5 and 12.5 percentage points for consumer credit, between 7 and points for short-term loans of less than a year, between 8 and 11.5 points for long-term loans, between 2.75% and 8 points for mortgages, and between 5 and 10 points for leasing and factoring contracts. (Lusa) 5

6 Mozambique to invest 135 million meticais in digital tax collection A Chinese-Mozambican consortium, LIS/INSPUR, is now charged with leading the digitisation of Mozambique s tax collection process, having presented one of the least expensive proposals for modernising the system. The investment is budgeted at approximately 135 million meticais [around US$2.3 million at today s exchange rates] over the next five years. Its central objective is to reduce or eliminate paper storage, moving over exclusively to digital. O País has learned from the Tax Authority of Mozambique (AT) that the provider of this service has extensive experience in the development of electronic tax collection platforms. LIS INSPUR beat nearly three dozen hardware and software developer companies competing in an international public tender launched in 2016 for the supply, installation, testing, implementation and maintenance of the fiscal computer system. In addition to Mozambique, LIS/INSPUR has a strong presence in Asia and four other African countries. In terms of data security, the consortium s executive manager Calton Madeira guarantees that the taxpayer information stored in the AT system will be well protected, since the standard to be used is the one required worldwide. We are comfortable that the level of information security is of a high standard of reliability. In Africa, it is being used in Kenya and Zimbabwe, with great success, Madeira said. Justifying the choice of so inexpensive a system, project coordinator Bruno Rodolfo said the winning consortium had given full guarantees of a quality service, accessible to any citizen. n I don t think the issue of cost is relevant. What I can say is that we have been able to find an experienced company that will give us full guarantees, Rodolfo argued at an international seminar on developments for IT service providers in Maputo this Monday. Madeira said that the reform and modernisation of the tax system was an essential part of improving domestic resources, and would improve accountability and transparency. The economic dynamics of recent years requires a response in terms of modernising the tax management processes, with benefits for both the state and the taxpayer, the Tax Authority director general said. Rodolfo added that, in the digital era, the use of information and communication technologies for taxpayer and tax management was the only viable alternative for creating an internationally competitive business environment. It was in this context that AT was carrying out a series of technological modernisation initiatives, such e-taxation, the single electronic window system, the modernisation of taxpayer services and the implementation and operation of a management system for tax machines, he said. The fiscal machine management system will allow for better management in the area of Value Added Tax and the Simplified Tax for Small Taxpayers, and will also facilitate the use of electronic devices. We intend to obtain the maximum possible roll-out of our modernisation projects, as far as the taxpayer is concerned, he said. Mozambique s digital tax collection platform will come into effect in the first quarter of (O País) TOURISM Government of Mozambique seeks strategic partner for flagship airline The Mozambican government plans to accelerate the restructuring plan of Linhas Aéreas de Moçambique (LAM), the country s prime minister said recently, describing the recovery of the airline flag as, a priority. Carlos Agostinho do Rosário, quoted by Mozambican state news agency AIM, said the government plans to find a strategic partner to recover LAM from the crisis it faces, as a result of its inability to honour its financial commitments. Recently, about 300 passengers who wanted to travel from Maputo to the cities of Beira and Nampula were left on the ground due to a lack of fuel on LAM s planes, with the supplier companies demanding payment in advance. The airline has not been honouring its commitments to suppliers, and that difficulty was admitted by the board of directors in a statement issued recently. The Mozambican State Administration for Participation Management, a government entity that manages public companies, announced the appointment of a commission to manage the airline on a transitional basis following the dismissal of the Board of Directors, decided in an extraordinary general meeting the day before. The Mozambican press has reported that LAM is facing not only financial problems but also technical problems. (apanews/macauhub) Gorongosa Park registers tourist increase 18 months after cease-fire in central Mozambique Gorongosa National Park (PNG) has seen a 60 percent increase in tourists since the announcement in December 2016 of a ceasefire in clashes between government forces and Renamo s armed wing, an official source said. The situation is positive. We have many domestic and foreign tourists wanting to visit the park said Patrícia Guerra, Director at Gorongosa Business Club, on the sidelines of the preview of the documentary On the Front Line: The Rangers of Gorongosa National Park. While highlighting the increase in the number of visitors during the last 18 months, the director of PNG was quick to outline challenges such as the state of access roads. The park is also placing itself as a centre for scientific investigation into animal life, attracting researchers and students from various parts of the world. We have teams that come to the PNG every four or six months, from palaeontology to ethology, mammals large and small. We have a wide scope, she added. The Mozambican Defence and Security Forces and the armed wing of the main opposition party, the Mozambican National Resistance (Renamo), exchanged shots in the centre and north of the country in 2016 until the first truce announced by the late party leader, Afonso Dhlakama in December. Hostilities resulted in an unknown number of people, with attacks on buses, trains and other civilian targets, damaged the economy in the affected regions and sparked a refugee crisis, while Renamo and the ruling Mozambican Liberation Front (Frelimo) party exchanged mutual accusations of political persecution and assassination. The clashes erupted after Renamo refused to accept the results of the 2014 general election, demanding to rule in the six provinces where it claims victory in the ballot. A revision of the constitution to permit greater decentralisation was approved on Thursday by the Mozambican parliament as part of the continuation of a negotiation process initiated by the Mozambican head of state, Filipe Nyusi, and the late Renamo leader. (Lusa) ENVIRONMENT Germany makes EUR 9 million available for BIOFUND in Mozambique The German Government, through the German Development Bank (KfW), has signed an agreement for the donation of EUR 9 million to the trust fund of the Foundation for Biodiversity Conservation BIOFUND. The amount donated will be used to protect the 6

7 environment, endangered species and to develop tourism, one of the four priority areas defined by the Mozambican Government in its Five Year Plan. BIOFUND is an environmental foundation which has the goal to support the conservation of aquatic, marine, coastal and terrestrial biodiversity in Mozambique. This responsibility is important, given that Mozambique has conservation reserves with a total area of 209,000 square kilometres, making up about 26 percent of the total area of the country. According to the German Ambassador in the country, Detlev Wolter, the German Federal Government is firmly on the side of Mozambique in promoting sustainable biodiversity and the protection of its wildlife and flora, which is unique in the south of Africa, reads a press release from the embassy. (O País/Notícias) IV. TENDERS Information about tenders can be found here: V. LEGAL ISSUES Mozambique refuses requests to hire foreigners because of Social Security debts The Mozambican Ministry of Labour, Employment and Social Security (MITESS) has refused requests to hire foreign workers presented by from 362 companies. The refusal is due to unpaid debts to the National Social Security Institute (INSS). The Minister of Labour, Employment and Social Security, Vitória Diogo, said the requests refer to the months of March and June of this year. Diogo said, while remaining tight-lipped on the actual amount of the debts. In the last three years, MITESS inspections have detected 45,341 infractions, 35,119 warranting a warning and 10,222 assessments. Violation of procedures for the hiring of foreign labour are among those detected. The press release indicates that 1.1 million jobs were created in Mozambique between 2015 and June 2018, of which 27,603 were taken up by foreign workers. (Lusa) VI. UPCOMING EVENTS AND INTERESTING LINKS - 4th edition of the multisectorial FACIM (Fair Agriculture, Commercial and Industrial of Mozambique) trade from 27th August nd September 2018, in Maracuene, Maputo Province (35km from Maputo city). The German Embassy Maputo is on Facebook follow us! If you wish to unsubscribe from our Newsletter, please send a short message to wi-s@mapu.diplo.de. We will then promptly ensure that you no longer receive the Newsletter. You can register again any time under the above mentioned address or through our Website at General information on data protection and your rights according to the EU General Data Protection Regulation may be found in the Data Protection Statement of the Foreign Office at 7