EEC-Mozambique cooperation

by Glauco CALZUOLA

Mozambique, undermined by 16 years of civil war and the worst drought Southern Africa has seen this century, has just embarked upon a process of democratic transition scheduled to lead the country to its first multiparty elections. This follows the peace agreement signed by the Government and the Renamo opposition movement in October 1992. The path to democracy is slow and beset with obstacles of all kinds, but the Government is determined. It will call on external assistance if it has to, but it is also counting on the people themselves to transform Mozambique into a democratic, viable nation.

It is to help it pick up this twofold- structural and short-term-challenge, that the European Community's aid (all instruments) is focused on four priorities, i.e. schemes to support the economic and social recovery programme (the PRES), regional development in Southern Africa (SADC), humanitarian relief in emergencies and a support programme for the post-war period.

Community aid began shortly after independence. Initially (1978-1985), the EEC used the Commission's own funds to meet immediate needs in a country which was embarking on a process of independence hampered by the destabilising effects of civil war. Since that time, with the signing of Lome III (December 1984) and Lome IV (December 1989), the EEC has acknowledged the effects of the war, and recently the drought, by both providing assistance for a country which has nothing and helping cater for and manage the future through structural adjustment funds and support for development strategies to reflect its particular needs. All in all, about ECU 393 million has gone into 119 schemes under Lome III and Lome IV since 1985.

Add to this the exceptional aid, food aid, NGO cofinancing and schemes financed as part of cooperation with the non-associated developing countries prior to the signing of Lome III and Mozambique has had more than ECU 900 million-worth of Community resources to date.

Trade and commercial cooperation

The country's economic performance very much depends on international trade and the Lome preferential trade agreements guaranteeing access to the Community market are important to the national economy, because they cover 29% of its trade. In 1991, the European Community accounted for 28% of Mozambique's exports and 29% of its imports.

The Community also encourages trade in Mozambique and all other ACPs with trade promotion measures and Stabex, its export revenue stabilisation fund.

It has financed stands for Mozambique firms at international trade fairs and other events in Europe and Africa since 1988 and has channelled a total of ECU 22.7 m-worth of Stabex support (Lome III and Lome IV) into the tea, copra, cotton and cashew nut sectors. But the results, alas, are still not very good. Despite the Government's economic liberalisation programme, trade development is hampered by the enormous institutional constraints of hefty state centralism, combined with a formal economic sector which is dependent on inefficient state companies and a civil war which is paralysing the economy and preventing foreign investment.

Development aid

More than 45% of Mozambique's aid comes from the EEC and the Member States, making the European Community one of the country's biggest sources of assistance.

The Community alone (Commission + EIB) has provided ECU 928m, most of it (97%) in the form of grants, since this cooperation began, with 47% going to the national indicative programmes financing for regional projects of direct benefit to Mozambique and schemes run as part of cooperation with non-associated countries. Food aid accounted for 33% and EIB loans for 3% and the rest (17%) was emergency aid, refugee relief, Stabex transfers, NGO projects and other operations under specific budget lines (AIDs control, hunger in the world etc.).

National indicative and regional programmes and the early projects (aid for non-associated countries) focused on rural development and self-sufficiency in food, transport and communications, social development, support for the balance of payments and the support programme for the post-war period, all of which are priority areas.

Rural development and fisheries

This has been a Community aid priority since cooperation with Mozambique began and Lome IV has merely confirmed and clarified the ideas outlined before.

The focus is on three main areas- irrigation, integration (farming and fishing) programmes and technical cooperation (institutional support). Integrated development programmes have been sited in the province of Cabo Delgado

(ECU 5m), in Inhambane (ECU 4.5m) and in the Moamba area (a total of ECU 12m), with the aim of improving production and the marketing of both agricultural produce and artisanal fishermen's catches along the coast. A fourth project is being run in the Chimoio region (ECU 7.1m) to get local potato production moving again. The indicative programmes have also included an important artisanal fishing scheme in the Inhambane area (ECU 7.5m) and institutional support for the sector.

The results and problems of implementation of all these projects are similar, because, when the rural operations were designed, insecurity in the area was such that not enough was known about the real situation there. Then, the fact that there were too many projects led to activities being scattered and difficult to coordinate and the various project leaders were not equally efficient. Another important thing is that all the Community's emergency aid and refugee relief has been for people in rural areas or in outlying areas around the towns.

Transport and communications

This is of great importance when it comes to ensuring the country's economic and political integration and opening up the SADC countries to give them access to international markets. Rehabilitation of port, rail and road infrastructure is one of Mozambique's priorities and a large percentage of international aid is channelled into this sector. The Community is involved here too, transport being a focal sector of the country's national indicative programmes and the SADC regional indicative programmes. A total of ECU 114m has been mobilised for a series of projects-the biggest of which are the Beira port rehabilitation scheme (ECU 56m), the railway modernisation schemes in Nacala (ECU 25m) and Limpopo (ECU 15m) and the emergency rehabilitation of the Beira-Inchope road (ECU 5.7m). Three further projects to rehabilitate a total 440 km of road (Nampula-Nacala, Boane-Sabie and Beira-Inchope) are currently being assessed. The EEC is also financing a general study of transport and communications in Southern Africa, with a view to shaping a strategy for the coming years which reflects the new socio-economic realities and trends in the South African situation.

Social development

A number of Community schemes have been run in this area to rehabilitate war-damaged schools and various health centres and dispensaries. Because of the local insecurity, these were small, individual operations, but two large-scale projects are now under way too-a rural telecommunications scheme (ECU 13m) and a study of repairs to health centres at national level. In particular, this latter scheme should make it possible to restore and maintain a basic level of services and ultimately ensure that treatment is available to all those living in rural areas.

Aid for the balance of payments

Mozambique has been trying hard to straighten out its economy through the PRES, the economic and social recovery programme which the Government brought out in 1987, and the Community has backed its action with:

-two sectoral import programmes, worth ECU 70m (Lome III), aimed at encouraging imports of raw materials and intermediate products to stimulate local agricultural and industrial production;

-a general import programme, worth ECU 54.7m (Lome IV), a substantial part of it for petroleum products.

Emergency programme for the post-war period

The Commission told the funders' conference in Rome (15-16 September 1992) that it would be helping Mozambique in this transitional phase leading up to the country's first multi-party elections by providing ECU 72m for five areas- the elections, demobilisation, the resettlement of refugees, displaced persons and demobilised soldiers, the provision of social services and the rehabilitation of the basic infrastructure. Despite the efforts of the various parties involved, there are still many impediments to the peace process. However, the Community's programme to provide medical assistance, distribute seed and other agricultural inputs and rehabilitate wells in rural areas to enable refugees and displaced persons to be resettled is taking practical shape with specific schemes to be run by NGOs. The Commission is currently financing technical assistance to help the Government in its difficult task of preparing the census and the elections-the equipment for which is also to be provided by the EEC. Studies are being run to decide on the rehabilitation priorities for the roads used to bring in food aid and medical assistance and the Commission is financing a programme to de-mine what the Red Cross and the WFP have designated as priority roads.

Community aid to Mozambique (summary) (30.04.93)

Non-programme aid
Food aid

Agricultural output has dwindled because of the civil wan nationwide insecurity and the drought of the last few years. The food shortfall is now about 600 000-700 000 t p.a. Food aid from the Community, currently accounting for 33% of EEC allocations to Mozambique, is of fundamental importance in that it represents 40% of the volume of all external food aid. The rains returned in late 1992 and the Commission, which is anxious to revive domestic production, is now concentrating more on obtaining agricultural products and seed locally. Cereal market buffer stocks are also being financed under the Community programme for 1993 (approximately ECU 40m), which combines conventional supplies from the European market with local purchases and special school-hospital canteen operations and will be meeting the food requirements of about 120000 demobilised soldiers and their dependents over a period of six months.

This outline of Community aid to Mozambique is not complete as it stands, because, in addition to the contributions mentioned above, the following have also been provided:

-various forms of emergency aid and aid for displaced persons, mainly in the form of medical and humanitarian assistance schemes, usually run through MSF, the ICRC and other NGOs (ECU 51.6m);

-various schemes cofinanced with NGOs (ECU 10m);

-various health education and emergency aid schemes in rural areas and around the towns to help the victims of destabilisation (ECU 13.5m);

-an AIDS control support programme; -a contribution to the tsetse fly control programme which is part of the campaign against world hunger (ECU 1.5m);

-three projects (a cotton factory and vegetable cannery, the Matola cement works and an ECU 15m line of credit to finance SMEs) financed by the EIB.

G.C.