Reg Rumney=20
While the world waits for South Africa to spell out its=20 privatisation plans, next door, Mozambique has thundered=20 ahead with a far-reaching privatisation programme.
By the end of February this year, Mozambique’s government=20 had privatised 21 large, strategic enterprises, and plans=20 to privatise a further 40 or so over the next two years,=20 said World Bank resident representative Simon Bell at a=20 regional press seminar in Windhoek.
By the end of 1996, says Bell, most industrial sector=20 activity would be in private hands. “The process is now=20 accelerating with the sale of the cement plants to=20 Portuguese interests, the cashew nut processing plants to=20 Mozambican and other interests, and the sale of soft drink=20
The sale of the breweries, additional cashew nut plants,=20 coastal shipping operations, and plastics factories is=20 being negotiated with serious bidders.
The irony is all the more obvious against the strongly=20 socialist stance of the Frelimo government in the past. To=20 be sure, South Africa did not nationalise to anything like=20 the extent that Mozambique did after its independence, and=20 so there is not as much to privatise.
One of the main concerns of the World Bank, said Bell, was=20 the dramatic decline over the past seven years in the=20 relatively well-diversified and dynamic industrial sector=20 Mozambique had at independence.
On the agricultural front, as part of what could be=20 construed as a kind of recolonisation, Anglo American is=20 coming back to work its old cashew nut processing plant at=20 Xai Xai, though Mozambican investors have put money in as=20 well. Mozambique now produces 10 percent of the cashews it=20 did at its peak.
International investors were also involved in cotton, Bell=20 revealed, with Lonrho in a joint venture operation.
Recently there have been moves to privatise some of the=20 large sugar, copra and tea estates.
Fisheries were among the first to be privatised and sold=20 to, among others, Mozambican, Spanish, Portuguese and=20 South African interests.
In transport, feasibility studies are underway for a toll=20 road from Komatipoort to Maputo, and similar private sector=20 initiatives may be possible through the Beira corridor.=20 There could also soon be private sector involvement in the=20 national airline, LAM, and there is already involvement in=20 Maputo port.
Along with financial sector reform which allows new banks=20 to be licensed in Mozambique, the government recently=20 announced that Mozambique’s two state banks, which account=20 for about 70 percent of total banking system assets, would=20 be privatised.
Investment is not confined to privatisation: Fortune 500=20 company Enron is involved in a $30-million Pande gas field=20 study. If the project, in which the World Bank is playing a=20 catalyst role, comes off it will be a big foreign exchange=20 boost, bringing in $200-million a year for a $400-million=20 to $600-million investment.
It is no surprise that much of the private sector=20 investment comes from outside, specifically South Africa=20 and ex-colonial master Portugal. Mozambique is the world’s=20 poorest country, with a 1993 national income per head of=20 $80. It is also one of the world’s most aid-dependent=20 countries, with aid pledges made in March of $800-million=20 constituting a big chunk of the country’s gross domestic=20 product of $100-million.