by Munetsi Madakufamba
Mozambique took a strong stand during negotiations with donors at the World Bank’s ninth Consultative Group meeting in Paris and secured pledges of US$871 million in aid for its heavily indebted economy.
The meeting, held under the auspices of the World Bank and drawing together the country’s major donors, was convened to discuss the funding needs of the economy and to see whether conditions in the reforms agreed upon with the same donors last year have been complied with so far.
The Mozambican government went to Paris to appeal for the establishment of an externally-financed debt relief fund so that resources can be shifted from debt servicing to human development services such as health and education.
A Mozambican daily, Telinforma, published by the national news agency, reports that donors “promised to support the government’s scheme whereby, if a donor puts up hard currency to pay off the country’s debt, the government will liberate a corresponding amount in meticais and channel it to health and education. ”
Most Southern African Development Community (SADC) countries are trying to confront the poverty and deteriorating social services caused by the donor-imposed economic reforms. A joint United Nations Development Programme (UNDP)/SADC three-day meeting in Gaborone in April emphasised the need for poverty eradication, which formed the central theme.
The overwhelming response to Mozambique’s plea for finances in Paris came as a great relief to a country which is just over a year out of a devastating civil war and has a foreign debt believed to be above sustainable levels.
The process of reconstruction in Mozambique is such that there are huge challenges in social sectors such as education, health and housing while the economy also suffered from the drought.
A lot of infrastructural rehabilitation is also called for where there is need to improve the conditions of roads, bridges and telecommunications services if trade is to pick up.
Demining forms yet another challenge since the real reconstruction cannot begin until this has been done. According to the director of Mozambique’s National Demining Commission (CND) Osorio Mateus, about 6 000 kilornetres of roads and 2 000 hectares of open fields have been demined. He added that about 28 500 mines and other explosives were destroyed while 200 000 rounds of ammunition were collected.
The amount pledged for Mozambique represents about 16% of the total external debt currently at US$S.S billion — almost four times the country’s gross domestic product (GDP) in nominal terms. Mozambique and Zambia are the only SADC member states that have had their debts rescheduled.
The World Bank/International Monetary Fund (IMF)’s Development Committee endorsed a set of principles and a framework for debt relief to heavily indebted countries at a separate meeting in Washington. This came after a group of African leaders were invited by the Debt Crisis Network (DCN) to tour Britain and Ireland. They met with British and Irish Ministers, representatives of the IMF and the World Bank as well as several European businessmen with interests in Africa.
The purpose of the tour was quoted in a press release as to “… call upon the G7, the Bretton Woods Institutions, as well as both the Paris and London Clubs, to take the necessary bold measures in this year, 1996, so that by the end of this millennium, the African Debt crisis will have been eliminated.”
Regrettably, the document endorsed by the committee rules out any proposals for an outright cancellation and makes it clear that the debt relief talked about only goes as far as rescheduling and not a complete write-off. Anne Petti for of the DCN was quoted in the West Africa, a London-based weekly, as saying tying debt relief to conditions “is a recipe for further disappointment in Africa.”
The donors at the Paris meeting applauded Mozambique for the progress made so far in implementing the initial set of reforms. Reforms underway include privatisation and restructuring of parastatals with the two state-owned banks top on the list, as well as a customs reform programme.
They, however, listed a series of further reforms they would want implemented as a conditionality to the aid being granted. Among these were new agricultural policies, increased private sector participation in railways, ports, coastal shipping and aviation, elimination of monopolies and further trade liberalisation.
The Consultative Group also stressed that “sound economic management and good governance, including combatting corruption, will ultimately determine the success of the government’s efforts.” It further warned that drug trafficking could destroy the country’s reputation.
Donors took issue against corruption in the wake of massive theft of food aid from the Maputo port. “At least 1 450 tonnes of American maize went missing from the port of Maputo in late 1995,” reports the Telinforma
Despite the laudable success echoed at the Paris meeting, the government has not yet implemented promises it made to the Consultative Group last year “on establishing a High Authority against Corruption, and a code of ethics for top officials.”(SARDC)
