Republic of Mozambique
Poverty Reduction Strategy Paper: Economic and Social Plan for 2005

This paper discusses Mozambique’s Poverty Reduction Strategy Paper—Economic and Social Plan for 2005. In the international context, the paper presents the evolution of the international economy so as to understand under what economic conditions the country will have to implement its economic and social policy. It discusses the major macroeconomic objectives, and the evolution of the main economic indicators for Mozambique. The paper also presents the main policy measures to be implemented by the government, targets, and activities.

Abstract

This paper discusses Mozambique’s Poverty Reduction Strategy Paper—Economic and Social Plan for 2005. In the international context, the paper presents the evolution of the international economy so as to understand under what economic conditions the country will have to implement its economic and social policy. It discusses the major macroeconomic objectives, and the evolution of the main economic indicators for Mozambique. The paper also presents the main policy measures to be implemented by the government, targets, and activities.

I. INTRODUCTORY NOTE

The government’s five year plan for the period 2005-2009 sets its main objectives as: (i) Reducing the levels of absolute poverty, which will be pursued through activities in education, health and rural development; (ii) Rapid and sustainable economic growth, focusing attention on the creation of an economic environment that favours private sector activity; (iii) The economic development of the country, aimed in the first place at the rural areas, and having in mind the reduction of regional imbalances; (iv) The consolidation of peace, national unity, justice, democracy and national awareness, as indispensable conditions for the harmonious development of the country; (v) The fight against corruption, crime and red tape; and (vi) The strengthening of sovereignty and international cooperation.

The current document, the Economic and Social Plan for 2005, is the first stage in making operational the government’s five year programme for 2005-2009. With it, a new structure is being consolidated, one which was stated in the most recent documents drawn up, and which attempts to ensure better consistency between the various planning instruments as they interact.

Thus the current document consists of four major chapters: namely, International Context, National Macro-economic Context, Main Developments by Sector, and Budgetary Policy.

In the international context, the document presents the evolution of the international economy so as to understand under what economic conditions the country will have to implement its economic and social policy; the chapter on the national macroeconomic context presents the major macroeconomic objectives, and the evolution of the main economic indicators; the chapter on the main developments by sector presents the main policy measures to be implemented by the government, targets and activities. The chapter on budgetary policy presents the package of resources, their source and respective distribution in order to comply with the present Economic and Social Plan. Appended is a matrix of main indicators which makes it possible, in summary form, to assess the government’s performance in key sectors.

II. INTERNATIONAL CONTEXT

2003 ended with a recovery in the world economy (3.9%). 2004 was characterised by a relatively sustainable performance by the world economy. It is estimated that growth reached about 5%, one of the highest figures in the last 30 years, according to the International Monetary Fund (IMF). This growth is essentially due to the performance of the American and Asian economies, and particularly of Japan and China. Latin America also shows signs of recovery, and Africa is showing relatively good prospects.

Despite this recovery, as from the third quarter of 2004 there was a trend towards reduced growth, particularly in the USA, in Japan and in China, due to increased oil prices (in mid-August the price of a barrel was around 44.7 dollars). The risks facing us in 2005 are still linked to the behaviour of oil prices. Inflation risks are relatively low but there should be greater control over interest rates. The fiscal deficits in the advanced economies will continue to pose a challenge in 2005, since these economies, taken together, had a fiscal deficit equivalent to 3.4% of their Gross Domestic Product (GDP).

According to recent estimates, made by the IMF and the OECD (Organisation for Economic Cooperation and Development), in 2005 the world economy will grow by almost 4.3%. It is estimated that the growth in developing countries was 6.6% in 2004, and will be 5.9% in 2005. Africa was expected to reach a 4.5% growth rate in 2004 and 5.4% in 2005.

Forecasts

(Growth Rates)

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Source: IMF, World Economic Outlook (October 2004);OECD, Economic Outlook (June 2004).

Global international trade in goods and services will grow by about 9% in 2004, and a growth of about 7% is forecast for 2005. Imports and exports, for 2005, both for the advanced and for the developing economies will present rhythms of growth at the levels of 2004, which are higher than those of 2003.

It is estimated that the GDP of the United States of America grew at a rate of 4.3%, in 2004, and the American economy is forecast to grow by 3.5% in 2005. In 2004, the Federal Reserve Bank increased the interest rate (federal-funds) as a way of controlling inflation, taking into account the growth that is occurring. For 2005, it is thought that investment will grow, as well as the external sector, particularly exports. Internal demand will also increase.

In Japan growth in 2004 is relatively high, and may reach a growth rate of above 3%. For 2005, the forecast is 2.3%. This rate will be the result of continued high growth rates in exports at the levels of 2004, and a recovery, albeit moderate, in investment and domestic demand.

In the European Union, in the Euro zone GDP growth in 2004 is estimated at 2.2%, and the same rate is projected for 2005. Unemployment remains relatively high (9% in 2004 and 8.7% in 2005). A recovery of non-residential investment and also of private consumption is forecast for 2005.

The GDP growth rate in South Africa for 2004 is estimated at 2.6%, and the 2005 forecast is 3.3%.

Zimbabwe recorded a negative growth rate in 2003 of -9.3%. The estimate for 2004 is -5.2%, and for 2005 the IMF forecasts a growth rate of 1.8%. In 2003 inflation was about 431.7%, in 2004 about 350%, and for 2005 an inflation rate of around 450% is forecast.

The terms of trade for the advanced economies show a certain stagnation in the 2004-2005 period. The table below shows the growth rate of the Consumer Price Index for 2004-2005. In the advanced economies, there will tend to be price stability at relatively low inflation levels (2.1%), while in the developing economies, inflation is estimated at between 5.5 and 6%. In Africa inflation will be around 8%.

It is forecast that interest rates in the most developed economies will tend to rise slightly, as a way of holding back potential inflation risks, given that these economies have been recovering.

PERCENTAGE FORECASTS

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For 2005, unemployment rates in the advanced economies are forecast to decline slightly compared with 2004 levels. This is an indication that the recovery, in terms of job creation, of the world economy still faces some challenges in 2005.

These forecasts point to an international economic scenario for 2004-2005 in which a relatively sustainable recovery occurs, but where it is still necessary to ensure that growth is more balanced in the various regions of the world. There are still some risks to be considered: oil prices, and the fiscal deficits of the developed economies.

III NATIONAL SOCIAL AND DEMOGRAPHIC CONTEXT

III.1 CENTRAL OBJECTIVES AND PRIORITIES OF THE GOVERNMENT

In the five year period 2005-2009, the government will continue the efforts under way, concentrating its activity on pursuing the following objectives:

  • Reducing the levels of absolute poverty, which will be pursued through promoting rapid, sustainable and wide ranging economic growth, focusing attention on creating an environment favourable to investment and the development of the national business class, and through activities in education, health and rural development;

  • The economic and social development of the country, oriented in the first place to the rural areas, having in mind the reduction of regional imbalances;

  • The consolidation of National Unity, Peace, Justice and Democracy, as well as citizens’ spirit of self-esteem, as indispensable conditions for the harmonious development of the country;

  • Valuing and promoting the culture of work, enthusiasm, honesty and accountability;

  • The struggle against corruption, red tape and crime;

  • The strengthening of Sovereignty and International Cooperation.

Poverty reduction is a challenge for everyone and a fundamental condition for promoting human, economic and social development, in the countryside and in the cities.

This vision includes objectives that may be reached in the short, medium and long terms, enshrined in the national development plans, and in the strategies for fighting poverty and HIV/AIDS, as well as in programmes of regional, continental and international scope, with greatest stress on the New Partnership for Africa’s Development (NEPAD) and the Millennium Development Goals (MDGs).

The objective of reducing the levels of absolute poverty presupposes the priority channelling of basic services to the neediest strata of the population.

Hence the main activity of the government will be oriented to improving the living conditions of the majority of our population, which consists of women. Thus women will be at the centre of attention, seeking to ensure that they enjoy equality of opportunity and rights, raise their educational level and strengthen their role as educators of future generations, as regards shaping the personality of Mozambicans.

Since the majority of the population in the rural areas still lives in extreme poverty, the government will pay greatest attention to promoting actions that seek the accelerated and sustainable development of the rural areas, and will multiply initiatives aimed at creating wealth in the countryside, as its fundamental strategy in the struggle against poverty.

The government regards the market economy as one of the catalysts for speeding up the country’s sustainable economic development. To this end, it will continue implementing actions seeking rapid and multi-sector development in all parts of the country. The harmonious development of the country will be supported by the establishment of conditions for increasing investment and for the flowering of the private sector.

The government fights for good governance, based on the principles of participation in decision making, transparency in the management of the public domain and regular accountability. Thus, corruption and its expressions, which form a phenomenon that blocks the country’s social and economic development, will be fought against, with resort to political, penal and judicial measures.

The government will continue establishing conditions for strengthening our sovereignty through strengthening the security of the state, of the economy, and of the defence of citizens’ interests.

The government shall also continue to deepen bilateral and multilateral cooperation with all partners and friends, as well as tightening the bonds of international cooperation in order to consolidate Mozambique’s integration into regional and international blocs.

Special attention will also be paid to Mozambicans in the diaspora, since they are an integral part of Mozambican society, and enjoy the same constitutional rights and duties.

The reduction of absolute poverty, through promoting social and economic development, includes, among others, the following components:

  • Transformation of the socio-demographic characteristics so as to reproduce a substantially better educated and healthy population, consisting of citizens who are better prepared to face the challenges of a dynamic world. Among a population that is on average better educated, and more employable, one should note a significant segment of people endowed with initiative, with innovative and entrepreneurial capacity, and who may stimulate the appearance and development of institutions, particularly dynamic companies, of all sizes.

  • Development and provision of basic infrastructures (physical, and concerned with the development of applied technological research and extension), and institutional infrastructures that make viable the flourishing of private initiative and investment (national and foreign) on a broad and inclusive base, creating a solid, sustainable and competitive economy in the context of normal insertion into the world market.

For pursuing the objectives of the government programme, key areas for action are the following:

  • Education

  • Health

  • Infrastructures

  • Agriculture

  • Rural Development

  • Good Governance, Legality and Justice

  • Macro-economic, Financial and International Trade Policies

III.2. MILLENNIUM DEVELOPMENT GOALS (MDGs)

The Economic and Social Plan is an important instrument for assessing the country in respect of attaining the Millennium Development Goals (MDGs). The present draft Economic and Social Plan takes the Millennium Development Goals into consideration. These targets are a series of objectives for human development that were established under the Millennium Declaration, which was signed in September 2000 by 147 countries. There exist the following MDGs to be attained by 2015:

  • Eradicate extreme poverty and hunger;

  • Achieve universal primary education;

  • Promote gender equality and empower women;

  • Reduce child mortality;

  • Improve maternal health;

  • Combat HIV/AIDS, malaria and other diseases;

  • Guarantee environmental sustainability;

  • Develop a global partnership for development.

For each objective the United Nations has designed specific targets that can be monitored through quantitative indicators. However, it has been necessary to adjust these targets in the national context to monitor the level of Mozambique’s performance in the context of the MDGs. For example, the indicators suggested by the United Nations cannot always be collected annually, so that in these cases indicators more appropriate for the case of Mozambique are chosen.

1. Eradicate Extreme Poverty and Hunger

A global MDG target with the objective of cutting by half the percentage of people living in extreme poverty or suffering from hunger, between 1990 and 2015. It should be noted that the targets established in PARPA are, in general, consistent with the MDG targets.

Out of a population estimated at 18.3 million, almost 10 million are still poor. In future, while poverty measured by consumption is an integral component of a multi-dimensional concept of poverty, some attention should be directed to aspects of poverty such as access to public services, which are not directly measured through household surveys based on consumption.

2. Combat HIV/AIDS

One of the MDGs is to halt, and begin to reduce, by 2015, the spread of HIV/AIDS. In order to understand the true scale and geographical distribution of the HIV/AIDS problematic, studies have been held into the prevalence and the demographic and macro-economic impact of this pandemic.

To attain this objective, in 2005 action will remain concentrated on the treatment of opportunistic infections, on providing advice about forms of prevention, on supplying anti-retroviral drugs to 25,000 people, including 15,000 pregnant women, and on providing home care to patients with HIV/AIDS. It is expected that in 2005 the HIV prevalence rate among adults will reach 15.6%.

1. Basic comforts

One of the MDGs is to cut the proportion of people without access to clean drinking water by half, by 2015. In 1992, according to the statistics of the Public Works and Housing sector, 10% of rural households had access to safe drinking water, while in 2003 the figure was 39.4% of households. In urban areas, the rate of growth has been slower, from 29% in 1991 to 33.3% in 2003. An important factor associated with this situation is rapid migration. Thus, although the absolute number of individuals in the urban areas who have access to safe drinking water has increased considerably, the coverage has increased more slowly, when viewed as a percentage of the urban population. However, as a result of the new urban water and sanitation project in several cities, this number should grow rapidly.

4. Universal Primary Education

One of the MDGs is to achieve universal access to primary education by 2015. Universal primary school enrolment remains a major challenge for Mozambique.

To achieve this goal, efforts in 2005 will remain concentrated on expanding access and improving the quality of education. Thus, it is envisaged that the net enrolment rate in EP1 will rise from the current 75.6% to 79% and that the gross admission rate will increase by 19.1% rising from the current 137.6% to 156.7%. In terms of improving the quality of education, the new national curriculum will be introduced in 2nd, 4th and 7th grades; the new curriculum will be adopted in the teacher training institutions (CFPP and IMAP) and the free distribution of school textbooks and other educational material will continue.

5. Gender equality

One of the MDGs is to eliminate gender inequality in primary and secondary education, preferably by 2005, and in all levels of education by 2015 at the latest. In recent years the gender gap in primary education has decreased notably. The Education Strategic Plan proposes increasing access to education, with special stress on girls’ education. Apart from this, there are programmes such as “Ratio for Girls” which make a major effort to increase the number of female teachers. If current trends persist, it is likely that the objective of reaching gender parity in education will be achieved in first level primary education in 2005, or shortly afterwards.

6. Reduce child mortality

A further MDG is to reduce mortality among under fives by two thirds by 2015. To attain this MDG, Mozambique needs to reduce the mortality rate among children under five from 277/1,000 live births in 1994 to 82/1,000 live births in 2015. The Expanded Vaccination Programme forms part of the government’s efforts in this area. The PARPA objective for 2005 of 98% coverage of BCG (against tuberculosis) was already achieved in 2003. However, much effort is still needed to raise the coverage rate of the DTP (3) vaccination.

As part of the effort to reduce child mortality, vaccination activities will be undertaken for children aged 0-23 months, children in the first grades of school, and women of child-bearing age (15-49 years). Thus it is expected to reach a 98% coverage rate of the BCG vaccine, 98% coverage of the VAS vaccine, and 95% coverage of DPT (3).

7. Improve maternal health

Reducing maternal mortality by three quarters by 2015 is one of the MDGs. A central component of the Strategic Health Plan and of PARPA is the Mother and Child Health and Family Planning Programme (SMI/PF). The PARPA target of cutting the hospital rate of maternal mortality from 175 per 100,000 in 2000 to 160 in 2005 can be achieved.

In order to improve maternal health, implementation of the Mother and Child Health and Family Planning Programme will continue. Thus a reduction in the hospital maternal mortality rate to 0.16% is expected. Institutional births and family planning (new users) should reach coverage rates of 49% and 20%, respectively.

8. Combat malaria

One MDG is to halt, and begin to reverse, by 2015, the incidence of malaria and other significant diseases. Prevention programmes are common and effective treatment in hospital continues to be followed closely.

To combat malaria, the use of insecticide treated mosquito nets will be promoted, spraying with insecticides will be undertaken where recommended, and cases of fever will be treated in the community in accordance with the habits prevailing in the communities. Thus it is expected to reach in 2005 a hospital malaria lethality rate in children and in adults of 2.7% and 5.3%, respectively.

9. Environmental sustainability

A further Millennium Development Goal is to integrate the principles of sustainable development into the country’s programmes and policies, and reverse the loss of environmental resources.

To achieve this goal, in 2005 priority will be given to publicising the Environmental Strategy for the Sustainable Development of Mozambique, to actions raising awareness of environmental issues, and to the formulation and implementation of specific environmental management policies/programmes.

III.3. PROJECTIONS OF THE DEMOGRAPHIC AND MACRO-ECONOMIC IMPACT OF HIV-AIDS

The projection for the size of the Mozambican population in 2005 is 19,420,036 inhabitants, 10,051,611 women and 9,368,425 men with a dependency rate of 86.2%.

After the information published from the 2002 epidemiological surveillance round, the Multi-Sector Technical Support Group for the Fight against HIV/AIDS updated the information on the demographic impact of HIV/AIDS in Mozambique in order to better guide the initiatives of all stakeholders in the struggle against HIV/AIDS.

The table below presents the national HIV prevalence rate among the adult population (aged between 15 and 49). If the historical pattern is followed, without immediate and effective intervention, by 2010 the prevalence rate will reach 16.8%.

uA01fig02

Graph: National Prevalence of HIV in Adults

(15–49 years)

Citation: IMF Staff Country Reports 2005, 312; 10.5089/9781451827248.002.A001

Table: HIV/AIDS prevalence among adults (15-49 years), by region and nationally

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In 2004, in the south, the lowest prevalence rate is recorded in Inhambane province (8.6%), and no great differences are noted between the prevalence rates in Maputo City (17.3%), Maputo Province (17.4%) and Gaza (16.4%). In the Centre, Sofala province has the highest prevalence rate (26.5%) followed by Manica with 19%, Tete with 14.2% and Zambézia with 12.5%, while in the north, Niassa province (11.1%) shows the highest prevalence, followed by Nampula (8.1%) and Cabo Delgado (7.5%).

In terms of the number of people living with HIV/AIDS in Mozambique, the projections indicate that about 1.4 million people were infected with the virus in 2004. Of these, 68,000 are children (0-4 years), 529,000 are men (15-49 years) and 779,000 are women (15-49 years).

uA01fig03

Projection of number of people living with HIV/AIDS

Citation: IMF Staff Country Reports 2005, 312; 10.5089/9781451827248.002.A001

To calculate the projection of new cases of AIDS it must be borne in mind that the period from infection with HIV until the development of full-blown AIDS varies with age. Normally this period is shorter in children than in adults, with a median of 1 and 8 years respectively. It is estimated that 500 people are newly infected with HIV every day. The majority of new cases of AIDS will occur among people who are currently HIV positive. According to the projections, the number of new cases of AIDS might reach 178,084 by 2010 if there are no effective interventions.

uA01fig04

Graph: New Cases of AIDS 1999–2010

Citation: IMF Staff Country Reports 2005, 312; 10.5089/9781451827248.002.A001

In a short time AIDS has become one of the main causes of death in Mozambique. The graph below shows the accumulated deaths due to AIDS. From this graph it can be seen that in just 5 years, from 1999 to 2003, 309,814 people died from AIDS. The number of deaths estimated for 2004 is 97,079. It is important to stress that this mortality is differentiated by regions. About 58% of the deaths happened in the Central region of the country. The fact that this region is so much worse hit than the other regions may be explained by factors such as the larger size of the population, and the earlier start of the epidemic. It is forecast that in the next 7 years, the number of deaths from AIDS in Mozambique will triple, even with the expansion of ARV therapy.

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Graph: Accumulated Deaths fro m AIDS 1999–2010

Citation: IMF Staff Country Reports 2005, 312; 10.5089/9781451827248.002.A001

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Projection of the number of deaths from HIV/AIDS

Citation: IMF Staff Country Reports 2005, 312; 10.5089/9781451827248.002.A001

The graph below refers to children aged 0-17 years, whose mothers died of AIDS and from other causes. A comparison of the orphans whose mothers died of AIDS with orphans whose mothers died from other causes shows a very large difference. We note that the number of maternal orphans due to AIDS is tending to increase, while the number of orphans whose mothers die for other reasons is tending to decline slightly. It is forecast that the number of maternal orphans due to AIDS will increase from about 227,834 in 2004, to about 272,051 in 2005. Over time, the proportion of these AIDS orphans will tend to rise. In 2010, if there is no effective intervention, it is expected that more than 500,000 maternal orphans (about 48% of all maternal orphans), will result from AIDS. It is important to stress that the fact that the mothers died of AIDS does not mean that all the orphans carry the HIV virus. In reality most of these orphans are HIV negative, either because they were born before their mothers were infected, or because vertical transmission did not occur.

uA01fig07

Graph 9: Maternal Orphans (0–17 years), 1999–2010

Citation: IMF Staff Country Reports 2005, 312; 10.5089/9781451827248.002.A001

A further consequence of AIDS is the reduced life expectancy or longevity of the population, as can be noted from the graph below. In a scenario without AIDS, it has been estimated that life expectancy at birth would rise from approximately 44 years in 1999 to about 50 years in 2010. But considering the effects of the epidemic, the longevity of Mozambicans could be lower in future. For the year 2010, it is forecast that this deficit may rise to over 14 years, if there are no effective interventions.

uA01fig08

Graph: Life expectancy 1999–2010

Citation: IMF Staff Country Reports 2005, 312; 10.5089/9781451827248.002.A001

This study presents relevant data for designing action in the struggle against HIV-AIDS. Analysis of the data from the 2002 round strengthens the hypothesis that the Central region has reached the mature phase of the epidemic’s evolution, with the exception of Zambézia, where the epidemic is growing. The Southern region, with the epidemic slowly on the rise, is in the intermediate phase of the epidemic’s evolution. In the Northern region, the epidemic seems to be still in a phase of growth. Young people, particularly girls, are the most vulnerable group. The mortality caused by AIDS is changing the population structure due to a sudden decrease in the number of adults over 30 years old. This will have negative effects on the country’s socio-economic fabric.

For 2005, in the struggle against the spread of HIV/AIDS, the government’s actions will concentrate on:

  • Increasing access to testing and counseling services;

  • Reducing HIV transmission from mother to child, through supplying anti-retroviral drugs;

  • Increasing the capacity of the health units to diagnose and treat opportunist diseases;

  • Anti-retroviral treatment in selected health units, expecting to cover 20,800 people;

  • Provision of home care to patients with HIV/AIDS;

  • 58% of funds channelled by the CNCS-SE to OSC’s (Civil Society Organisations), and public and private sector institutions to strengthen their capacities;

  • 20% of community initiatives supported by CNCS-SE in supporting the country’s orphans and vulnerable children;

  • Ensuring improved coordination of interventions by all partners involved in the fight against HIV/AIDS, in the light of PEN II and of the Operational Plan in the framework of the national response;

  • Divulge the Strategic Plan for the Fight against HIV/AIDS - PEN 2005/2009 (PEN II) and its respective Operational Plan;

  • Ensure that all sectors draw up operational plans that contribute to meeting the objectives and targets of PEN II;

  • Encourage the various sectors to promote harmonisation of their respective development plans and programmes with the national strategy to fight against HIV/AIDS;

  • Negotiate simplification of disbursement mechanisms and administrative procedures for the funds made available for the fight against HIV/AIDS;

  • Propose the establishment of levels of authority by administrative division for the approval of projects against HIV/AIDS;

  • Ensure greater involvement of local communities and their leaderships in actions fighting against HIV/AIDS; and

  • Strengthen the income generating capacity, the food security and nutritional support of individuals, families and communities affected by HIV/AIDS.

In 2005, it is expected that the HIV prevalence among adults will reach 15.6%.

Macro-economic impact of HIV-AIDS

The literature on HIV/AIDS and economic growth is far from drawing definitive conclusions as to the magnitude of the impact and the relative importance of various channels through which this impact may occur. Nonetheless, some essential indications arise from the analyses made so far. Among them, the long duration of this pandemic is crucial. For example, the official projections of the demographic impact of HIV/AIDS on Mozambique assume an interval of 9 years between infection and death. Given the long period separating infection and death, the projections for deaths from AIDS up to 2013 are already essentially programmed within the system. This happens because most of the people who, according to the estimates, will die in this decade, and at the start of the next decade, are currently infected with HIV/AIDS. Given that the pandemic is going to continue over a long period of time, small impacts on the determinants of growth (such as technical progress, physical capital and human capital) are going to accumulate, with substantial implications for the economy.

Recently, special attention has been paid to the accumulation of human capital. With AIDS it is expected that the population of school age will shrink, reducing that part of the school age population who actually attend school. This calls into question the capacity of the education system to carry out its duties. All these factors point to a reduction in the ratio of accumulation of human capital. If, as is believed, educated people tend to be more productive and innovative, then lower rates of accumulation of human capital, due to an educational system that has deteriorated, will reduce the economic growth rate, possibly during a considerable period of time.

Analyses of the implications of HIV/AIDS for growth, using a computational model of general equilibrium for Mozambique undertaken in 2001-2002, show that AIDS cases and deaths may have a great impact on economic growth. The analyses show that annual GDP growth rates per capita would be between 0.3% and 1.0% lower than in a fictitious scenario without AIDS, during the period from 1997 to 2010, with strongest effects in the period 2005 - 2010. The largest causes of reduction in growth are: (1) slower productivity growth rate, (2) slower rate of population growth and of accumulation of human capital, and (3) reduced ratio of accumulation of physical capital. Each of these three effects is important.

Given that the HIV-AIDS pandemic will probably last for a prolonged period of time, the impacts mentioned will go on accumulating, resulting in major long term impacts on the economy. Consequently, successful initiatives in preventing faster spread of HIV infection, and in fighting economic upheavals due to deaths from AIDS, while maintaining at the same time the basic conditions for growth, will probably earn large returns.

Maintaining the basic conditions for growth is also important. PARPA envisages growth in GDP of about eight per cent, and in per capita GDP of five per cent per year - growth rates that were achieved in the previous decade. As for economic growth per capita, the projected impacts of AIDS on economic growth represent a fraction of the target. For the period 2005-2010, this fraction should be within the interval of between 10 and 50 per cent of the target growth rate per capita of five per cent. Thus, mitigating the pandemic and maintaining the basic conditions for economic growth are both important for continued economic growth and poverty reduction, although the second element (the maintenance of the basic conditions for economic growth) is probably more important.

IV. MACROECONOMIC NATIONAL CONTEXT

The results observed over the past year during the implementation of the 2004 PES indicate that the targets laid down are being reached. The preliminary data indicate:

  • A growth in Gross Domestic Product of 7.2%.

  • An accumulated inflation rate of 9.3%.

  • A growth in commodity exports, excluding those from mega-projects, of about 11%.

For 2005, the government’s economic and social policy, following and making operational the strategy for the struggle against absolute poverty, expressed in the Action Plan for the Reduction of Absolute Poverty (PARPA), will continue to be marked by a series of actions contributing to sustainable economic growth and to reducing absolute poverty and social inequalities. Thus the main objectives to be achieved are set as follows:

  • A growth in Gross Domestic Product of between 7 and 8%.

  • Holding the annual inflation rate in the range of 7 to 8%.

  • A growth in commodity exports, excluding those from mega-projects, of about 6% and, including the mega-projects, 46.5%.

TOTAL SUPPLY AND DEMAND - GROWTH RATES IN VOLUME (%)

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IV.1. OVERALL AND SECTOR PRODUCTION

Overall and sector production for 2005 indicates a growth rate of 5.7%. To attain this result, the expected performance in agriculture, mineral resources, manufacturing industry and transport and communications will be determinant. Excluding aluminium, production will grow at a rate of 6.3%. In fact, phase II of Mozal reached its maximum productive capacity in 2004; for 2005, an aluminium production of almost the same levels as 2004 is forecast.

OVERALL AND SECTOR PRODUCTION - Growth Rates in Volume (%)

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Without mega-projects, production will grow at a rate of 7.3%. As may be concluded, the presence of mega-projects, under construction and operating, conditions and distorts the normal behaviour of the overall production of the economy which has evolved at the rate of about 7.0%. The joint increase to be noted in agriculture, manufacturing industry and transport and communications is equivalent to about 60% of the programmed increase.

All the other sectors will present a positive evolution. Worthy of note are the increases forecast in the sectors of Mineral Resources (41.6%) and Electricity and Water (14.8%). The performance of the mining sector is based on the increases in the production of the Pande-Temane gas; while increased energy production results from the normal functioning of Hidroeléctrica de Cahora Bassa, after the end of rehabilitation, modernisation and automation work that began in 2003, and the expansion of the national electricity grid to the northern region and other parts of the country.

The construction sector will record a reversal of its performance indicators of recent years, associated with the end to construction of major undertakings that are now operational.

A. AGRICULTURE, LIVESTOCK AND FORESTRY

As in the 2003/04 campaign, no dramatic climatic disturbances are forecast for the 2004/2005 agricultural campaign, and policy for the sector will remain oriented towards the reduction of absolute poverty and towards guaranteeing the food security of rural households, To this end, the family sector, given its importance in reducing levels of absolute poverty will continue to merit special attention in order to raise levels of production and productivity.

The effort in this sector will be centred on promoting the sustainable use of resources, with community participation, livestock assistance, the encouragement of basic food and cash crops, making available sustainable production and post-harvest technologies, and simplification of the procedure for obtaining DUAT (Land Use Titles), with greater stress on the small producers.

AGRICULTURAL PRODUCTION

(Growth Rates in Volume %)

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A growth in agricultural production is thus expected of about 7.2% overall. The commercial sector will record an increase of 12.0% resulting from the significant increase in production expected in some food crops and products for industry, notably tobacco, given the weight they have in the structure of commercial marketing. The dynamic of this sector is linked to the restructuring and rehabilitation of some productive units, particularly for sugar cane, cotton, tobacco and maize.

COMMERCIAL PRODUCTION AND FAMILY SECTOR MARKETING

(Growth Rates in Volume %)

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For the group of export products, growth of 16.6% is forecast. Thus a growth rate higher than that recorded in 2004 (10.5%) is expected.

Cashew production will grow by 62.8%. To promote production of this crop, there will be continued training of producers, and development of activities to handle pests and disease, in Cabo Delgado, Nampula, Zambézia, Inhambane, Gaza and Maputo provinces.

For the group of basic food crops, growth of approximately 5.3% is forecast. In general, increases are expected in all food crops, namely grains, root crops and legumes, due to increases in the area under cultivation and in productivity. In recent years, there has been a growth rate in food crops relatively higher than the rate of expansion of the area under cultivation, which reflects improvements in productive technical efficiency, and the success of the agricultural services provided to the rural population.

The production and marketing levels of maize (5.9%) and cassava (5.2%) are worth stressing. These are the products with most weight in food crops taken as a whole, and are thus fundamental in guaranteeing food security and reducing absolute poverty.

For the group of products for industry, growth of 15.6% is forecast. Determinant in this is the growth recorded in tobacco production and marketing (22.9%).

Dynamism in family sector marketing is expected. There are prospects for increases in all crop groups - namely export crops (18.8%), food crops (6.0%) and products for industry (12.8%).

FAMILY SECTOR MARKETING

(Growth Rates in Volume %)

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Despite the high figures programmed for auto-consumption (5.5%), in recent years there have been improvements in family sector marketing, and an increase of 8.3% is forecast for 2005.

In the livestock sector, an overall growth rate of 5.1% is forecast.

LIVESTOCK PRODUCTION

(Growth Rates in Volume(%)

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Key: COMM = Commercial sector; FAM = Family sector

Domestic contribution to the overall supply of beef has been growing in recent years. In fact, while only 26% of beef consumption came from national cattle production in 2000, the figure rose to 58% in 2001 and to 67% in 2002. Apart from the livestock breeding programme, this change results: from a relaxation of the containment policy, thanks to the stabilisation of the herd, the ban on the entry into Mozambique of cattle from neighbouring countries due to health problems, and to the environment of stability which has made it possible to step up marketing.

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LIVESTOCK NUMBERS

Citation: IMF Staff Country Reports 2005, 312; 10.5089/9781451827248.002.A001

According to recent Agricultural Survey data (TIA 2003), in the coming years the country might reach the effective peak of about 1.5 million head of cattle recorded in the 1980s.

Forestry production will grow by 3.1% in 2005. To secure sustainable exploitation of forestry resources, the Development Policy and Strategy for the forestry sector and the Forestry Regulations have promoted exploitation in the form of forestry concessions, thus reducing disorderly exploitation.

B. FISHERIES

Improvements in the system for gathering statistical data on artisanal fishing, with the adoption of the sampling method, allows us today to present a more realistic picture of the contribution made by this sub-sector to fisheries production. The production of artisanal fishing, commercial fishing and fish farming, taken as an aggregate, is forecast to rise in 2005 by 7.7%. This results essentially from the rapid growth in fish farming, and the significant contribution of artisanal fishing.

FISHERIES PRODUCTION

(Growth Rates in Volume %)

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ARTISANAL FISHING - Growth Rates in Volume (%)

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COMMERCIAL FISHING - Growth Rates in Volume (%)

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* Includes fish farming

Commercial prawn production will record a slight decline (-0.4%), despite growth in the production of farmed prawns, resulting from the expansion of production areas in Zambézia, Sofala and Cabo Delgado. The traditional prawn catch is forecast to reach 8,000 tonnes, against 8,085 tonnes in 2004. In general, the fisheries produce export plan is about 15,730 tonnes, against 20,504 in 2004. It should be noted that there will be continued increase in exports from fish farming, with the start of the commercial catch and export of live farmed prawns, to be used as reproducers for fish farming production.

C. EXTRACTIVE INDUSTRY

Production from extractive industry has been showing significant levels of growth, with the alteration of the production structure with new products gaining in weight. The plan for 2005 forecasts a growth rate of 41.6%. This growth is based on the increases forecast in the production of natural gas at Pande-Temane, and limestone, riolites and tantalite, in Maputo, Inhambane and Zambézia provinces. In the current productive structure, these products represent about 80% of national mining production. Gas is the mining product that creates the greatest production value in this sector.

In the search for sustainable exploitation of natural gas, additional reserves of gas have been located in areas adjacent to the Temane field. Conclusion of evaluating the reserves is expected this year.

Tantalite production has increased with the opening of the new mine at Naquissupa, and with the re-activation of old mines. The reactivation of the Muiane mine is expected in 2005.

Extension of the national electricity grid to Ancuabe, forecast for late 2005, opens good prospects for reactivating graphite production.

MINERAL RESOURCES - Growth Rates in Volume (%)

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Coal production is expected to continue recording strong signs of recovery (58.6%) once the problems concerned with the productive process at the Chipanga XI mine are solved, stimulated by the rise in coal prices, with increased demand on the world market.

The levels of production of marble in sheets and blocks have been unstable due to several factors, notably the existence on the market of alternative products, such as tiles and granite imported from South Africa. Increases in production are expected in 2005, with the installation of new equipment in the quarries, and with a reliable energy supply to the quarries, thanks to the expansion of the national electricity grid to the north of the country.

Garnet production will record growth of 76.9% in 2005. Privatisation of the company SOMEC, E.E., which holds the exploitation rights over this mining area, is under way.

The production of granite, bauxite, bentonite and dumortiorite has faced problems in finding markets. These products are conditional on orders and supply contracts previously signed with clients. In 2005 efforts will be pursued to rehabilitate the bentonite mine at Boane which was destroyed by the 2000 floods.

Small scale mining production (gold, tourmalines, aquamarines and quartz) has recorded positive results in the last 3 years, and positive levels of growth are also expected in 2005. The main supports for the results in gold production are the performance of licensed operators in Nampula, Zambézia, Manica and Niassa, government support for artisanal operators, and rehabilitation of access routes to the gold production areas in Niassa.

D. MANUFACTURING INDUSTRY

In 2005 industry will continue to be one of the determinant factors for economic development. Growth in commercial industrial production of 3.1% is forecast. Mozal will continue producing at its full installed capacity, and its production is forecast as stationary (0.5%) in comparison with 2004.

MANUFACTURING INDUSTRY - Growth Rates in Volume (%)

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The food, drink and tobacco industries are the major pivot for growth in the country’s manufacturing industry because, on the one hand, of the dynamism they have shown in recent years, and on the other, because of the weight they have in the overall structure of industrial production.

Improvement in the performance of the drinks industry is expected, with the rehabilitation and installation of new equipment in the company Cervejas de Moçambique (Beers of Mozambique).

The timber and furniture industries, after strong signs of recovery in 2003, with the increase in demand for school furniture, are forecast to show stationary behaviour in 2005, because the main productive unit (NOVARTE) is facing financial problems.

The behaviour of the paper and printing industries has been unstable over the last 3 years. After presenting a sharp rate of growth in 2002, in 2003 they recorded declines in production. The substantial performance registered in 2004 does not allow prospects for high rates of growth, although some sign of recovery in this area is envisaged. Thus a slight growth rate (1.3%) is forecast in 2005.

The chemical, rubber and plastics industry has shown oscillations in its production levels, due to the presence on the market of similar products imported at low cost, with greatest impact on the manufacture of chemical products and plastic materials.

In the area of basic engineering, a growth of only 0.5% is forecast, explained by an increase in aluminium production from the 547,606 tonnes produced in 2004, to 550,344 tonnes. Excluding aluminium, this sector will grow by 2.3%, despite the entry of two new companies, Memoz and Ferpinta Moçambique. The first is dedicated to metallurgical services, and the second to producing zinc sheeting.

Some constraints remain in the industrial sector, concerning the poor quality of the electricity supplied, the high costs of production caused by the excessive cost of electricity, water, customs charges, obsolete technologies and limited access to bank credit, which result in low levels of production and competitiveness of some industrial units.

An improvement in the quality of the electricity supplied to industries in northern Mozambique is expected in 2005, thanks to the expansion of the national electricity grid in this part of the country. On the other hand, it is expected that implementation of Ministerial Diploma No 99/2003, of 13 August, that approves the Customs Regulations for manufacturing industry, will stimulate the areas covered, through reducing customs charges on imported raw materials.

E. ELECTRICITY AND WATER

The energy and water sector is forecast to grow by 14.8%. This performance is based on the conclusion of the modernisation and automation work at Hidroeléctrica de Cahora Bassa, which will allow the normal operation of the generators, and hence increased production of electricity for export both in a regime of firm energy and one of peak power.

In 2005, the expansion of the electricity grids to 20 district capitals and the installation of solar-powered systems in 10 localities are envisaged. Water production will continue to accompany the additional needs created by rural and urban population growth, which allows a forecast of a slight growth of 2.5%.

F. CONSTRUCTION

In the area of construction and assembly, a reversal in the trend of the production indicators recorded in recent years is expected, which will represent a return to the normal functioning of this sector, after the conclusion of building work on Phase II of Mozal and of the Pande-Temane gas pipeline. In 2005, continued promotion of the heavy sands projects of Moma, Chibuto and Moebase is forecast, with a view to attracting larger volumes of investment.

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ROADS PROGRAMME

Citation: IMF Staff Country Reports 2005, 312; 10.5089/9781451827248.002.A001

Excluding the mega-projects sub-sector, the construction sector will show a trend to growth compared with the levels of 2004. The work programmed in the roads area covers a total distance of 17,069 kms against 10,988 kms in 2004.

G. TRADE

In the trade area, the Plan for 2005 forecasts a growth rate of 6.5%. This growth is based on the envisaged growth in production of the real sector of the economy. Also forecast is an increase in commodity imports to feed the commercial flow of the economy. However, the accelerated increase forecast in the total volume of imports, as seen on the balance of payments, is due to demand from the mega-projects, and these provide no profit margin to domestic economic agents, since their imports go through no transactions internally.

H. RESTAURANTS AND HOTELS

The current pace of investments in the sector, and particularly the expansion in the number of beds and of hotels and similar establishments, is opening good prospects for the continuous growth of the sector. The entry into operation in 2003 of accommodation establishments classified with three, four and five stars, sustains the 2005 production plan. The performance envisaged is based on the forecast increase in tourism revenue in the balance of payments.

I. TRANSPORT AND COMMUNICATIONS

Production for 2005 indicates that the sector will reach an overall growth rate of 13.1%. Road transport (8.4%) and communications services (37.7%) will contribute significantly.

TRANSPORT AND COMMUNICATIONS - Growth Rates in Volume (%)

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The growth in road transport results from the increase recorded in public and semi-collective passenger transport, caused by the growth of the country’s cities and towns, the encouragement of licensing of vehicles that have more than 25 seats, and the acquisition of new public buses.

Road freight transport has been conditioned by the needs imposed by the entire production and marketing of the real sector of the economy. In 2005, the volume of freight carried by roads will be relatively stagnant, compared with the amounts transported in 2004, associated with the freight transport recorded during the construction of the Pande gas pipeline.

The telecommunications performance is due to the expansion of the fixed and mobile telecommunications networks. Of particular note is the aggressive stance of the mobile and fixed phone operators as they try to expand their markets.

Although air traffic has been stimulated with the opening of new points of entry to the country, the implementation of the new civil aviation policy, the simplification of procedures for the licensing and entry of aircraft, and the increase in tourism, it will experience a decline in 2005, reflecting the fact that this year no major international events are foreseen, like those that drove international passenger traffic in 2004.

IV.2. MONETARY AND EXCHANGE SECTOR

The monetary and exchange policy to be pursued in 2005 is guided by the final objectives of government economic policy, in terms of economic growth, the control of inflation, and equilibrium of the balance of payments.

In 2004 the monetary programme envisaged an annual growth in the Money Supply of 15%, but by the end of December it had only grown by 6.1%, influenced, essentially, by the appreciation of the metical against the US dollar. For 2005 an annual growth of 14.5% in the Money Supply is forecast, Gross International Reserves should cover between 5 and 6 months of imports of goods and services, and the programme makes space for a growth in Credit to the Economy in line with the nominal growth in GDP.

Interventions on the interbank monetary and exchange markets will be prioritized to regulate the behaviour of the monetary aggregates and thus guarantee the inflation objective.

In the area of strengthening the financial system, the following are envisaged:

  • Concluding the timetable for the introduction of International Financial Reporting Standards (IFRS) in the institutions under its supervision;

  • Finalising the study on the implications of the transition to IFRS on tax policy;

  • Implementation of International Accounting Standards (IAS);

  • Strengthening the institutional capacity of the Bank of Mozambique and of other regulatory authorities through issuing and implementing regulations on the Law of Credit Institutions and Financial Companies (LICSF) and the regulation on micro-finance;

  • Implementation of the strategy of selling the state’s shares in BIM.

IV.3. INFLATION

The accumulated rate of inflation, from January to December 2004, was 9.3% according to the Aggregate Price Index of the three main cities: Maputo, Beira and Nampula (MABENA). Breaking the figure down by cities, one notes that Nampula had slightly higher accumulated inflation with 11.9%, while Maputo city reached 9.1% and Beira 8.5%.

PRICE INDEX - MABENA - BASE DEC 1998 = 100

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Source: National Statistics Institute

The fall in inflation is linked, among other things, to the performance of the real sector of the economy, the moderate expansion of the money supply, and the favourable evolution of the public accounts. One should also mention the impact of the appreciation of the Metical against the Rand and the US dollar, which softened the pressure from the group of non-food commodities, associated with the continual rise in oil prices on the international and domestic markets.

Although it declined by -0.1% in June, and was stationary in July, when looked at in accumulated and annual terms the Maputo city price index rose by 9.1% by the end of the year, rather than the 11% programmed.

Unlike what happened in 2003, the evolution of inflation over the period has been strongly influenced by the index of non-food commodities, which, in accumulated terms, increased by 4.8%. Of particular importance was housing which by December had risen by 22.4%. These increases were associated with the continual rise of oil prices on the international and domestic markets, and the adjustment upwards of some prices fixed administratively. One should also mention that, albeit on a smaller scale, the depreciation of the metical against the rand had some influence on the evolution of the index, particularly in the behaviour of food prices.

PRICE INDEX - MAPUTO - BASE DEC 1998 = 100

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Source: National Statistics Institute

PRICE INDEX - BEIRA - BASE DEC 1998 = 100

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Source: National Statistics Institute

PRICE INDEX - NAMPULA - BASE DEC 1998 = 100

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Source: National Statistics Institute

Considering the results achieved in 2004, the rate of inflation projected for 2005 is between 7 and 8%

IV.4. BALANCE OF PAYMENTS

Commodity exports in 2005 are forecast to reach 1,529 million dollars, which, compared with 2004, will represent a growth of about 5%. Exports from the mega-projects continue to dominate the range of goods traded by Mozambique on world markets, contributing with about 1,132 million dollars.

TRADE BALANCE - 10^6 USD

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For their part, commodity imports in 2005 are forecast to reach 2,158 million dollars, of which 460 million are imports by the mega-projects.

In 2005 it is expected that the deficit on the balance of services will worsen by about 74% compared with the previous year - that is, that the deficit will rise from 279.7 to about 486 million dollars.

BALANCE OF SERVICES - 10^6 USD

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As for the entry of foreign exchange into Mozambique to finance investment, in 2005 this may undergo a decline of about 15% compared with the previous year, influenced by a decline in private loans, taking into account that an increase in direct foreign investment is expected.

PRIVATE FOREIGN LOANS AND FOREIGN INVESTMENT - 10^6 USD

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V. MAIN DEVELOPMENTS BY SECTOR

V.1. SOCIAL AREA

A. EDUCATION

In the area of Education in 2005, there will be continuing priority on expanding access and improving the quality of education. Strengthening institutional capacity at the various levels of educational administration will be a further priority.

General Education

Expansion of Access to Education

In 2005 the number of pupils in General Education is forecast to grow by about 18% in comparison with 2004, thus maintaining the growth trend recorded in previous years. By levels of education, sharper growth is forecast in the number of pupils in primary education. In 2005 it is envisaged that the school network will grow by about 7% compared with 2004.

The construction of schools at low cost will be promoted in 2005 with a view to expansion of access. Thus the pilot phase of the School Construction at Low Cost Programme will be undertaken in four provinces, namely Cabo Delgado, Nampula, Tete and Zambézia.

General Education: Pupil numbers in 2003/2005

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Source: MINED

Pre-school Education

In the area of Pre-school Education, the following activities will be undertaken in 2005:

  • Develop and introduce experimentally training courses for monitors for the “Community Creches”;

  • Develop the Parental Education Programme, through the radio, and of the Literacy and Adult Education programmes, in order to ensure care and education for children.

Special Education

In the area of Special Education, the inclusion of children with special educational needs, children with motor disabilities, and blind and deaf children will continue. The rehabilitation of two special schools will also be undertaken.

Primary Education

About 3.6 million children are forecast to attend First Level Primary Education (EP1), which is an increase of 17.9% compared with 2004. These pupils will attend 8,761 schools, which is an increase of 5% on the 2004 figure.

In terms of the school coverage rate, the net EPI enrolment rate is forecast to rise from the current 75.6% to 79% and the gross admission rate should rise by 19.1%, from the current 137.6% to 156.7%.

As for gender, it is expected that net EPI enrolment rate of girls in 2005 will reach 77% (3.8% more than in 2004), and that the percentage of EP1 pupils who are girls will rise from the current 45.9% to 47%.

At the same time, and as part of implementing the Gender Strategy in Education, the gender parity plan of action and the strategy to care for and assist orphans and vulnerable children will be implemented.

In Second Level Primary Education (EP2), the number of pupils in 2005 is forecast to grow by about 25% compared with 2004. That is an increase of a further 102,993 pupils on the 409,279 pupils enrolled in 2004. Thus the trend to strong growth in this level of education is continuing. That growth has been under way since 1995, and particularly since 2000. As a result, the gross enrolment rate in this level will rise from the current 41.0% to 51.1% in 2005.

As for schools, it is envisaged that a further 236 schools will provide this level of education in 2005, thus increasing the number of schools teaching EP2 from the current 1,116 to 1,352.

In terms of entry, 216,700 pupils are forecast to enter 6th grade for the first time in 2005, which is a rise of 15.2% compared with the 2004 figure. The gross admission rate will rise from the current 37.5% to 43.1% in 2005, thus maintaining the growth trend noted since the 1995 school year.

Secondary education

About 187,100l pupils are forecast to attend the 1st Cycle of Secondary Education (ESG1) in 2005, which is a growth of 10.8% when compared to the figures observed in 2004. These pupils will attend a total of 153 schools, which is an increase of 13 on the number of schools which taught this level of education in 2004 (I40 schools).

As for the Second Cycle of Secondary Education (ESG2), in 2005 about 23,100 pupils will attend these grades, which is a increase of 8.4% on the 2004 figure (21,400 pupils). This level of education will be taught in 35 schools, five more than in 2004.

Distance Learning

  • Implementation of the Secondary Education Distance Learning Project (PESD) and its expansion to a further 5 districts in Nampula province;

  • Development of a plan to implement the pilot 11th/12th grades project, under the Distance Learning in Mozambique strategy;

  • Establishment of the National Distance Learning Institute (INED) and of the national network of Provincial Distance Learning Centres;

  • Development of strategies to improve the quality of distance learning programmes;

  • Training the staff involved in distance learning;

  • Development of a joint programme with the UP for training secondary school teachers through distance learning;

  • Registration of 5,000 teachers for the mid-level teacher training course by correspondence;

  • Registration of 1,625 new teachers on the basic (7th+3) teacher training course by correspondence;

Teacher training

The training of the teaching staff will continue in 2005, in the framework of the efforts under way in the education system to raise the teachers’ professional qualifications.

During 2005, there will be a reflection on teacher training strategy, seeking to upgrade teachers at all levels so as to respond to the imperatives of Technical and Professional Training.

Thus it is expected that in 2005 a total of 5,541 students will attend the 7th+3 teacher training courses (CFPPs), slightly less than the number attending in 2004 (5,853), which is a decline of -5,3%. This course will be taught in 11 colleges located in all the provinces except Maputo City.

As for the mid-level teacher training courses (IMAPs), it is envisaged that in 2005 a total of 4,057 students will attend the 10 existing IMAPs, which is a slight growth, of 0.4%, on the number of students registered in 2004.

Training of the Teaching Staff

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Source: MINED

In-service teacher training

  • Continue the “CRESCER” programme of in-service teacher training;

  • Undertake national programmes of continuous professional development for teachers and trainers at all levels based on the CRESCER experience.

Technical and Professional Education

In this educational sub-system, it is envisaged that in 2005 elementary technical education will be taught in 11 schools with a total of 1,717 students, which is an increase of 35.4% on the 2004 figure (1,268 students).

In 2005, the basic level day course will be attended by a total of 20,316 students, an increase of 2.2% on the figure for 2004 (19,878 students).

The mid-level day course will be attended by 3,917 students, which is a rise of 11.4% compared with the figure for the current academic year (3,516 students).

In the field of culture, a reflection will be undertaken seeking to include the Arts Schools in the National Education System.

Adult Education

In the area of literacy and adult education, it is envisaged that in 2005 a total of 810,00 students will attend the 1st and 2nd years, which is an increase of 50.7% on the number observed in 2004 (537,600 students). Of this number, 645,900 will be enrolled in the normal literacy programmes, and the rest (164,100) will be included in literacy activities via radio. The number of units that it is forecast will teach this level of education is 6,347, a much larger number than the 5,288 that existed in 2004.

For the 3rd year it is proposed that in 2005 a total of 189,800 students will attend, which is a growth of 53.9% on the number observed in 2004 (123,300 students).

Achieving the above targets will rely on the participation of civil society, whose support has been important, particularly in Non-Formal Education, which involves programmes of improving the living conditions of citizens, and thus contributing in creating opportunities for reducing absolute poverty. With regard to the analysis of effectiveness, for the first time in the country, a data base and instruments for gathering and treating data in this area will be used.

Improving the Quality of Education

With the purpose of improving the quality of education, the following are planned for 2005:

  • Implement the new curriculum nationally in 2nd,4th and 7th grades;

  • Continue the process of transforming the curriculum of General Secondary Education;

  • Reach an EP1 finishing rate of 48%;

  • Reduce the EP1 repetition rate to 15.6%;

  • Reach an EP1 finishing rate for girls of 41%;

  • Adopt the new curriculum in the teacher training institutions (CFPPs and IMAPs);

  • Establish the comprehensive in-service training programme, serving the needs of 40% of EP1 and EP2 teachers;

  • Implement in all public schools the Direct Support to Schools programme;

  • Set up new ZIPs and continue revitalising those that already exist;

  • Distribute the free school text books and other education resources; and

  • Continue school building activities.

In the area of school sports and health, the following activities will be prioritised:

  • Hold the 7th National School Sports Festival;

  • Distribute first aid medical kits in 10 provinces, in order to help improve the health of children at school; and

  • Remove parasites from EP1 pupils in Gaza and Inhambane provinces and in Muanza and Dondo districts in Sofala.

In the HIV/AIDS area, the following activities will be undertaken:

  • Expand the multi-sector programme on Sexual and Reproductive Health for adolescents and young people to 2 more provinces (Niassa and Inhambane). The programme will thus be present in 8 of the country’s provinces;

  • Introduce and implement a new prevention programme entitled “Basic Life Skills Package” in 3 provinces (Zambézia, Tete, Cabo Delgado);

  • Implement the radio programme “World without Secrets” in 3 provinces (Zambézia, Tete e Cabo Delgado);

  • Draft and distribute a manual on School Health and HIV/AIDS, along with a specific fund for activities on these topics, for all basic education schools (together with the Direct Support to Schools programme);

  • Implement the 2nd phase of the programme for school directors entitled “Managing Schools in the context of HIV/AIDS”;

  • Print and distribute 80,000 copies of the brochure “HIV/AIDS and You”;

  • Introduce the pilot programme of support for orphaned and vulnerable children (COV’s), benefiting about 50,000 children;

  • Hold a national competition aimed at students on preventing and mitigating the effects of HIV/AIDS;

  • Select and introduce indicators on the impact of HIV/AIDS on the sector, in the statistical survey system in force; and

  • Train provincial focal points and working groups throughout the country in matters of HIV/AIDS, management and planning.

Institutional Development

In the area of strengthening the system’s administrative and management capacity, priority will be given to training school directors and managers of the system at provincial and district level and developing partnerships with civil society.

2005 will see the start of implementing the Education Strategic Plan (PEE) for the period 2005-2009. To ensure that the funds allocated to the sector are fully disbursed in due time, expenditure reports will be drawn up for analysis at the annual PEE review meeting.

In the area of involving the community in Education, the School Councils Manual will be distributed, and provincial and district teams will be set up to deal with the functioning of the School Councils.

Furthermore, the education management documents will be revised and enriched, at school, district, provincial and central levels, seeking to improve the circulation of information and the taking of decisions.

In the human resource area, challenges for the sector in 2005 are to finish regularising the pending cases of staff not yet formally in the system, appoint to effective positions staff who have concluded academic levels, but whose placing in the career structure was not changed earlier for lack of coverage in the budget, and upgrade the financial managers who deal with processing staff wages.

HIGHER EDUCATION

In 2005 higher education will continue to prioritise development of a work force capable of responding scientifically and technologically to the major challenges of the country’s economic development. Special attention will be paid to expanding access to higher education through polytechnics in strategic areas for national development and in provinces where higher education institutions do not yet exist, to improving the quality of the courses given and to expanding education opportunities from citizens outside Maputo through expanding the higher education institutions.

To achieve these objectives, the following activities will be undertaken:

In improving the quality and relevance of higher education

  • Establish the national system of accumulating and transferring academic credits;

  • Set up the national accreditation, assessment and quality guarantee system;

  • Introduce and monitor implementation of internal assessment and quality guarantee mechanisms in the higher education institutions;

  • Define and approve staff statutes in public higher education;

  • Train teaching staff through strengthening the existing programmes, prioritising the training of teachers for secondary education, which is determinant for the quality of this education and for the professional orientation of the students;

  • Set up a scholarship fund in order to promote the opening, consolidation and growth of post-graduation programmes;

  • Improve coordination between the various levels of education as one way of guaranteeing quality;

  • Promote initiatives and/or finance activities to improve quality in the higher education institutions (QIF—Quality Improvement Fund);

  • Conclude the definition of a Policy of Access to Public Higher Education;

  • Make supervisory visits to public and private higher education institutions; and

  • Harmonise academic degrees at SADC level.

Expand access to higher education with equity through:

  • Start implanting higher polytechnic institutes in Gaza, Manica and Tete;

  • Continue implanting distance learning with the creation of INED;

  • Prepare the establishment of the National Scholarship Fund.

Improve administrative and financial management of the public higher education institutions through:

  • Defining a Policy of Public Funding for Higher Education;

  • Training staff of the public higher education institutions in the areas of administration and management;

  • Promoting the financial and patrimonial autonomy of the public institutions;

  • Make the PEES (2nd Phase) operational with the involvement of all public and private higher education institutions.

Develop scientific research in the higher education institutions through:

  • Promoting research activities in post-graduate programmes in the higher education institutions in areas of knowledge that are important for national development, and for poverty reduction, particularly in the fields of education, agriculture, health, fisheries, energy, water, biotechnology, agro-processing, the environment, among others.

Contribute to the transfer of technology and innovation through:

  • Promoting the role of educational institutions in disseminating science and technology, for example, through scientific conferences and publications.

As for the specific activities to be undertaken in 2005 by the public higher education institutions, the following are envisaged:

Eduardo Mondlane University (UEM)

So that the education provided may attain excellence, and as a result of the curriculum reform under way, the UEM in 2005 will continue to prioritise the introduction of new methods of teaching and assessment, updating the libraries and improving educational resources with the support of information technologies.

Thus, to achieve the objectives defined, the following are envisaged:

Teaching-Learning

  • Finance activities that seek to improve the admission system;

  • Introduce systems of credit and assessment of teachers by students;

  • Adjust the currícula to the introduction of the credits system;

  • Introduce student-centred teaching methods;

  • Produce material to publicise courses and to advise candidates;

  • Prepare the new pedagogic regulations and other pertinent legislation;

  • Assess the masters’ courses;

  • Equip and computerise the libraries;

  • Equip the laboratories;

  • Undertake activities linked to curriculum reform;

  • Continue the upgrading/training of teachers at the pedagogic and postgraduate level; and

  • Support the opening of new courses (Higher School of Marine Sciences and Oceanography in Quelimane).

Research

Quality in education imposes a greater dynamic in research, which should capitalise on the constant increase of teachers doing post-graduate work and on the creation and development of centres of excellence.

Thus, in the research area, and to ensure excellence and quality, the following are envisaged:

  • Finance 15 new research projects;

  • Hold the 4th research seminar;

  • Set up a working group to formulate research policy;

  • Hold monthly public lectures on results from the work undertaken and proceed to define lines of research; and

  • Increase the participation of UEM teachers and researchers in international scientific events.

Extension

Extension is one of the vital components of the UEM’s mission. In this context, the University possesses support centres, one of which is the Judicial Practice Centre of the Law Faculty, which provides legal assistance to the neediest members of the community. Thus, in 2005, the Centre will introduce the component of field work, imposed by the need to intervene in preventing damage to the fundamental rights of citizens.

Expansion of the UEM in Mozambique

The country’s higher education sub-system does not yet meet the needs in terms of training qualified cadres. Furthermore, the number of places offered does not meet the growing needs and the demand that will be felt in the future. This situation demands expansion of the sub-system.

To face the need for expansion, in 2005 it is planned to acquire installations for the operations of the Higher School of Marine Sciences and Oceanography in Quelimane.

Pedagogic University

In 2005 expansion of access and improving the quality of the teachers trained will remain the priority. Thus the University will continue to prioritise the building of infrastructures, curriculum revision and the development of institutional capacity.

In this context, and in order to achieve the objectives laid down, the following activities will be undertaken:

Expansion and strengthening of institutional capacity

  • Establish conditions for setting up new university campuses in Maputo, Beira, Nampula and Quelimane;

  • Equip the institution and install a modern communications system; and

  • Design qualifications programmes for the technical and administrative staff.

Implement new currícula

  • Hold monitoring seminars as part of the introduction of new study plans.

Teaching, research and extension

  • Hold staff training seminars;

  • Hold the 2nd National Meeting on Educational Research in Mozambique; and

  • Consolidate the Pedagogic University’s publishing branch.

Post-graduation

  • Continue the 1st Masters’ Course in Education;

  • Prepare the Masters’ Course in Mathematics and Portuguese; and

  • Continue post-graduate (masters and doctoral) studies abroad.

Higher Institute of International Relations

In 2005 the expansion of training areas in international relations and public administration are the main objectives to be pursued within the efforts under way to train and graduate professionals with the quality required to meet demand on the labour market.

Thus in 2005 attention will remain concentrated on expanding teaching with the introduction of new courses (Public Administration Course); on improving the quality of education through curriculum reforms, research, and the introduction of new technologies and methodologies of administration in teaching and learning, and in the training of teaching staff.

B. SCIENCE AND TECHNOLOGY

In this area, the government will implement the Science and Technology Policy, the general objective of which is to develop an integrated system for the production and management of knowledge directed at national needs so as to stimulate the sustainable development of the country.

Information and Communication Technologies will continue to play a fundamental role in improving the quality of education, as well as to impress a greater dynamic on administrative activities, guaranteeing efficiency in attending to the concerns of the public. Thus there will be continued promotion of scientific and technological innovation to make the country more competitive in the region and in the world.

Thus the activities to be pursued in 2005 are as follows:

  • Dissemination of the Science and Technology Policy and definition of the strategy and mechanisms for implementing it, with identification of priority areas on which to concentrate;

  • Establishment of a forum with the objective of guaranteeing that coordination of national and international partners promotes integrated development programmes;

  • Establishment of the institutional basis for implementing the Science and Technology Policy, prioritising the creation of three provincial directorates and upgrading the provincial reflection groups;

  • Implementation of a national expedition of scientists and researchers to diagnose the main obstacles to development which can be analysed and solved from the technological point of view;

  • Creation of a National Fund for scientific research;

  • Establishment of sector scientific councils in four priority areas (water, agriculture, health and energy) and formulation of strategic plans for research in these four areas;

  • Implementation of a prize-giving system for scientific work;

  • Creation of the first national scientific journal;

  • Promotion of initiatives and funding for applied research activities and innovative processes;

  • Promotion of scientific research and encouragement for programmes of cooperation between technical and professional education, polytechnics and the local business class;

  • Creation of an incubator for the agricultural area;

  • Establishment of Multimedia Community Centres at district level;

  • Creation of the virtual sugar museum;

  • Formulation of a research strategy for the biotechnology area;

  • Formulation of an ethical code of conduct for researchers, and a proposal for its implementation;

  • Launch of the Mozambican Institute of Information and Communication Technologies, with at least one anchor company in Maputo province being the first technology park in the country;

  • Implementation of the «Equamat» competition as a way of supporting mathematics teaching and the use of information and communication technologies in secondary schools in at least three provinces;

  • Creation of the Academy of Sciences of Mozambique;

  • Organisation, in collaboration with partners in the area, of the 3rd Mozambican Exhibition of Science and Technology;

  • Drafting proposals for agreements and regulations that seek to coordinate the Sector with the institutions with executive responsibilities in the area of scientific research;

  • Holding olympiads technologies; and in the area of information and communication

  • Developing the institution through drawing up its statutes, staff table, training programme and other activities.

C. HEALTH

In the area of health, the priority will remain increasing access and improving quality in the provision of primary health care, in the context of reducing excessive mortality and morbidity among the population at large, and in the high risk and poor groups in particular.

Provision of Health Care

In this area, the main objectives for 2005 are the following:

  • Institutionalise the Quality Guarantee Programme in the framework of consolidating the quality of health care and services; and

  • Maintain the evolution of the overall volume of activities, and reduce geographical disparities in the consumption of health services.

Evolution of Overall Health, Activity, 2002–2005

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Source: MISAU

Expanded Vaccination Programme (PAV)

In this area, in 2005 efforts will be undertaken to attain the following objectives:

  • Reduction in mortality and morbidity from diseases that can be prevented through vaccination of children aged 0-23 months, children in the initial grades of school, and women of child-bearing age (15-49 years);

  • Increased availability of equipment and assorted materials for the operation of the Programme with greatest attention to the areas with the greatest shortfalls;

  • Strengthening the quality of data on PAV; and

  • Holding the vaccination campaign against measles among children aged 9 months to 14 years old.

Evolution of the coverage rates of the Expanded Vaccination Programme, 2001-2005, %

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Source: MISAU

Mother and Child Health and Family Planning Programme (SMI/PF)

In this area, the main objectives for 2005 are the following:

  • Reduction of the hospital maternal mortality rate to 0.16%;

  • Reduction of the rate of hospital deaths among new-born infants;

  • Increased accessibility and availability of essential, basic and complete obstetric services;

  • Reduction of the number of neo-natal deaths from asphyxiation, premature birth, and hypothermia;

  • Improvement in care for newly born infants;

  • Provide more health professionals with the skills to offer quality emergency obstetric care for women in childbirth, particularly for the rural areas; and

  • Establishment of quality standards and criteria for services provided for children.

Evolution of Coverage Rates of Mother and Child and Family Planning Programme, 2001-2005, %

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Source: MISAU

In the area of the School and Adolescent Health Programme, in 2005 it is planned:

  • To set up health services adequate to the needs of school and adolescent health;

  • To train health professionals to work with adolescents, in Family Planning, treating abortion complications, and preventing and treating HIV/AIDS;

  • Strengthen technical capacity at central and provincial levels;

  • Improve the system and mechanisms for coordination with other institutions;

  • Approve and publicise the Policy of Adolescent Reproductive Health; and

  • Expand implementation of specific reproductive health services for adolescents and young people.

In the area of nutrition, the following will be prioritised in 2005:

  • Educational activities on appropriate dietary habits;

  • Reduction in micro-nutrient deficiency through distributing Vitamin A capsules to all children aged 6-59 months, during growth control consultations;

  • Implement the Nutritional Rehabilitation Programme in its components of training, equipment and making products available;

  • Promotion of production and consumption of foods rich in micro-nutrients;

  • Promotion of the availability and consumption of iodised salt;

  • Promotion of appropriate processing of bitter cassava in Zambézia and Nampula provinces; and

  • Promotion of breast milk, and adequate complementary feeding.

Thus, it is hoped that the proportion of children with insufficient weight falls to 6% and that the proportion of children born in hospital with low weight at birth is no more than 10%.

Major endemic diseases

In this area, in 2005 priority will be given to the prevention, control and treatment of the main epidemic diseases that have most influence on the morbidity and mortality of the population. Thus, among others, the following activities will be undertaken:

HIV/AIDS

Under implementation of the Strategic Plan against HIV/AIDS, efforts will be made to guarantee anti-retroviral treatment to 20,800 people and to prevent vertical transmission.

Malaria

  • Promote the use of insecticide-treated mosquito nets throughout the country;

  • Treatment of cases of fever in the community in accordance with the habits prevailing in the communities;

  • Promotion of integrated treatment of childhood diseases and of ante-natal treatment for women in 20 districts; and

  • Spraying with residual insecticides where recommended.

As a result of these actions, it is expected that in 2005 a hospital lethality rate from malaria among children and adults of 2.7% and 5.3%, respectively will be reached.

Tuberculosis

  • Introduction of the 6 month tuberculosis treatment regime, with drugs in combined fixed doses;

  • Reduction of patients abandoning treatment to less than 10%;

  • Strengthening the capacity and quality of staff, including laboratory staff, in the areas that most need this, through training and supervision; and

  • Introduction of TPC (preventive treatment with cotrimoxazol) or anti-retroviral treatment for patients with HIV and Tuberculosis, gradually and wherever possible.

As a result of these actions, it is expected that the tuberculosis mortality rate will fall to 12% and that the percentage of new tuberculosis cases with positive cured basciloscopy reaches 75%.

Leprosy

  • Expansion of the geographical coverage of drugs for TMA (therapy with associated medicines) through the involvement of more community volunteers; and

  • Increase in information and education in the most endemic areas (Nampula and Zambézia).

Pharmaceutical area

In this area, efforts will continue in 2005 to improve the availability of medicines in health units, guaranteeing the consumption of safe, effective and good quality dugs. Thus the main objectives are as follows:

  • Improved management in the supply of medicines to the provincial level and in the health units; and

  • Timely distribution of the medicines requested.

Expansion of the Health Network

In this area, priority will be given to increasing access to health care through the expansion and rehabilitation of the health network. The following are planned for 2005:

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  • Construction of the Matola General Hospital

  • Conversion of the Health Centre at Caia into a Rural Hospital, and of the Health Centre at Gorongosa into a District Hospital

  • Construction of the medical stores in Beira

  • Construction of the Infulene and Quelimane Health Science Institutes

  • Construction of the National Drug Control Quality Laboratory.

In the area of developing human resources, in 2005 initial and continual training of workers will be prioritised, in order to improve constantly their professional performance.

As for Institutional Development, greater attention will be paid to strengthening the organisation and management of the health care system, including aspects of training in leadership and planning.

Under the Strategic Health Plan (PESS), 2005 will see the revision of the plan for the period 2006-2010, and leadership and management courses will be held in the health services, with greatest stress on the rural areas.

D. LABOUR

In the area of labour, the main objectives in 2005 will be on improving the general business environment so as to attract more private investment to the country, on job creation, and on institutional capacity building, with the purpose of reducing absolute poverty. A further priority will be implementing labour laws and regulations, and extending services of the social security system to the entire country.

To achieve the objectives defined, the following are envisaged:

Normative Action

  • Conclude the revision of the Labour Law;

  • Draw up, in coordination with the social partners, a draft diploma for the introduction of public and private labour mediation, conciliation and arbitration; and

  • Draw up a draft diploma to expand the personal scope of the Social Security System to cover waged workers of the informal sector, independent workers and the self-employed.

Employment, labour and professional training

  • Identify job opportunities for 4,000 job seekers;

  • Train professionally 2,000 unemployed, including disabled people, registered at the job centres;

  • Promote apprenticeships for 600 graduates from the technical schools and institutes, in the coordination of formal education with professional training in companies;

  • Upgrade the training sector for management training of micro and small business people;

  • Train 220 women organised in associations, in management of micro and small businesses;

  • Prepare and analyse proposals for productive micro-projects to be financed under FARE, seeking to create job opportunities for their beneficiaries;

  • Accompany and evaluate the Project for Social Reinsertion of former miners in Magude, Chókwè and Massinga districts;

  • Support financially and accompany implementation of 200 self-employment projects;

  • Control the recruitment, hiring and legalisation of Mozambican workers abroad;

  • Continue the construction and equipping of the Lichinga, Quelimane, Pemba and Vilanculos professional training centres;

  • Rehabilitate and equip the Chimoio professional training centre;

  • Rehabilitate the premises of the Employment Promotion Office in Maputo, Manhiça and Chibuto; and

  • Produce regular information bulletins on registered unemployment, strikes, work accidents, social security, migrant labour and professional training.

Professional Relations

  • Promote tripartite social dialogue and free collective labour bargaining in companies; and

  • Inspect 5,000 establishments in various areas of activity throughout the country.

Social Security

  • Draft a proposal to revise funeral benefits and encourage the voluntary maintenance of the registration of unemployed workers;

  • Open district directorates and/or representations in Monapo, Malema, Namapa, Chibuto and Mocímboa da Praia; and

  • Register 1,600 companies and 30,000 workers in the social security system.

Strengthening institutional capacity

  • Build new premises for the Ministry of Labour;

  • Rehabilitate and expand the premises of the Studies Office and the Documentation and Information Centre (CDI);

  • Hold professional training seminars for 34 employment staff;

  • Provide additional training to 12 labour administration agents;

  • Recycle 30 labour inspectors and train 20 new labour inspectors;

  • Finish the computerisation of the social security system; and

  • Finish building premises for the Gaza, Tete and Dondo delegations, and start building the Social Security premises in Zambézia and Nampula.

E. WOMEN’S AFFAIRS AND SOCIAL ACTION

In this area, attention will remain concentrated in 2005 on institutional development and capacity building, on raising the status of women, and on promoting gender equity, security, assistance and social integration for the target vulnerable groups, particularly children, the elderly and the disabled.

In this context, the following stand out among the various actions to be undertaken:

In the area of institutional development and capacity building

  • Continue drafting the Strategic Plan for the sector;

  • Train, upgrade and improve the skills of staff working in the sector of women’s affairs and social action;

  • Improve the methodologies used to gather and analyse statistical data on the programmes and target groups;

  • Design monitoring and evaluation instruments (with indicators disaggregated by sex), to measure the impact of protection and social reinsertion programmes;

  • Continue regulating the operations of public and private social units; and

  • Strengthen coordination and articulation with social actors.

In the area of promoting women’s status

  • Approve and publicise the National Gender Policy and Strategy;

  • Continue activities to train, inform and counsel women;

  • Guarantee the integration of a gender perspective in the policies, programmes and projects of the Government and in civil society organisations and the private sector;

  • Implant Provincial Councils for Women’s Advancement, a well as gender units in the various government institutions; and

  • Continue promoting awareness and social reinsertion of women victims of violence, and women living with HIV/AIDS.

In the area of child protection

  • Draw up the National Plan of Action for Children and submit it for approval;

  • Participate in revising legislation concerning children;

  • Continue the integration of orphaned and abandoned children, and those living with HIV/AIDS;

  • Continue developing income generating and professional training projects for street children, and those involved in child prostitution.

In the area of the Location and Family Reunification Programme, it is expected that in 2005 the number of children to be documented will grow by 7% in comparison with 2004, due to family abandonment, natural phenomena and social ones such as violence, ill-treatment and the poverty of households, which contribute to the separation of children from their parents.

Location and Family Reunification Programme

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Source: MMAS