Moçambique on-line

The Indian Ocean Newsletter 29 June 2007

Everybody is doing business

The business networks and the ruling Frelimo party have been closely interweaved for decades, leading to a risk of insider trading at all levels of power in Mozambique. Support or cooption between entrepreneurs and government officials puts the companies that do not have the benefit of this kind of political protection into a difficult position.

Guebuza leads the way
A businessman before he became Head of State, Armando Guebuza did not abandon his portfolio of equities when he took over the presidency. Not long ago the company Intelec Holdings, of which he is a shareholder, took 5% of Vodacom Moçambique in which several other Frelimo big shots have interests (Hermenegildo Gamito, Bruno Morgado and Apolinario Pateguana) just as Emotel which also has ties with Frelimo. Headed by the chairman of the Associação Comercial de Moçambique (ACM), Salimo Amade Abdula, Intelec has stakes in a large number of other firms, including Energia de Moçambique (Enmo) in which the South African company Rural Maintenance Pty Ltd owns a stake (ION 1203). Other members of the President’s family are active in business too. His daughter Valentina da Luz Guebuza owns a stake in Beira Grain Terminal SA created in January 2007 to operate the cereals terminal in the port of Beira (ION 1209). One of the President’s brothers, Miguel Nhaca Guebuza, has interests in several firms and sits, among other things, on the board of the new sugar company Companhia Açucareira de Moçambique SA, created in April 2007 with Portuguese partners (ION 1215). The families of the principal Frelimo dignitaries act similarly, giving the Mozambican ruling class an air of a set of political-trading dynasties.

Generals not left out
A large number of Frelimo former generals who held top government functions after independence have gone into business. Many of them have had the advantage of bank loans, some of which have still not been repaid. Reserve General Jacinto Veloso who represents Frelimo on the Conselho Nacional de Defesa e Segurança (CNDS) is an accomplished businessman who has recently gone into the precious stones sector (ION 1211). His firm JV Consultores Internacionais Lda took a minority stake in Mozelec at the beginning of 2007. Another reserve colonel and member of the CNDS, a veteran of the fight for independence, Marina Pachinuapa is a shareholder in several companies including Nhama Comercios Lda and, more symbolically, Whatana Investment Group owned by the son of Graça Machel. The same goes for other veterans of the national independence struggle. One example is Reserve General Eduardo da Silva Nihia who advises the President on defence and security issues, who owns a number of companies (ION 1201). Another is General Raimundo Pachinuapa, who was a member of President Joaquim Chissano’s office and is chairman of X-Média Projectos Lda, a company owned by Mahomed Salim Abdul Carimo Omar.

Ministers in business
Numerous ministers and former ministers have stakes in local firms, or are partners in Frelimo’s businesses. The new Deputy Minister of Defence Agostinho Salvador Mondlane has thus in the past been the chairman of SPI Gestoa e Investimentos, a company with links to the government party. Meanwhile, the Minister of Defence Tobias Joaquim Dai owns a stake in the firm Efitel-Chaiva Lda, while his colleague in foreign affairs, Alcinda Abreu is a partner in Superior Entertainment Ltd. The director of Centro de Promoçao de Investimentos (CPI), Mahomed Rafique Jusob Mahomed became a shareholder a few months ago in Companhia Mineira de Munyena Lda and in Sociedade Mineira de Manica (ION 1209). Generally speaking, ministers and top civil servants rush into business as soon as they leave their official functions. The former Minister for Energy Castigo Langa has specialised in the mining sector; this year he has created Sugec Minerais with some Chinese partners. The former governor of the central bank Adriano Afonso Maleiane stayed in the finance sector: he created a financial consulting company, Malefinanceiro Lda, in January and an insurance consulting company in May, Maleseguros-Correctores de Seguros Lda.

Moçambique on-line - 2007

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