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Chapo vows to cut poverty and red tape in Mozambique, but wobbles on concessions

New president’s inaugural speech made general promises to deal with Mozambique’s key challenges, as well as containing some specific measures to improve the business environment

Mozambique’s new president Daniel Chapo promised to improve the business environment, eliminate poverty, and restore justice for Mozambicans, in his inauguration speech last Thursday, but slightly walked back another commitment, to renegotiate all concessions with foreign investors.

At a ceremony notable for the absence of foreign dignitaries — the only heads of state to attend were President Cyril Ramaphosa of neighbouring South Africa, and Umaro Sissoco Embaló of Guinea Bissau — Chapo made general promises to deal with some of the biggest issues facing Mozambican society. A list of all Chapo’s promises follows at the end of this article.

Chapo’s overall pitch to the country was that, as well as cutting the cost of government, he wanted to increase prosperity and opportunity for everybody. The means that he outlined to achieve this were a streamlining of government, more rigour and transparency in how government does business; increased investment in education and healthcare; and measures to modernise the economy and make it easier to do business.

He promised policies to “protect the most vulnerable” and ensure that nobody in Mozambique lives in poverty; a difficult challenge when, according to World Bank figures, two-thirds of Mozambicans live below the poverty line and the poverty rate has actually increased in recent years. He said his government would “support farmers, reinforce food security, and promote the export of local produce.” 

In an apparent threat to elites in ruling party Frelimo who have used their status to gain stakes in mining and timber businesses in exchange for helping businesses win deals, he also promised to protect natural resources by targeting people who “exploit the country without giving anything in return, with the connivance of Mozambicans.”

Corruption would also be dealt with through the establishment of a central procurement authority that would take charge of government procurement, while Chapo promised to modernise the economy through a new Ministry of Communications and Digital Transformation.

Chapo also promised to confront organised crime, in particular kidnappings which he acknowledged happen “often with the complicity of those who ought to be protecting us”, meaning the security services. Justice, he said, must not be “a distant promise”. At the same time, he said penal legislation would be revised, with minor offences punished with electronic tagging, reducing overcrowding in prisons. Mozambique’s colonial-era prisons have not been significantly replaced or added to since independence.

Cut red tape, renegotiate concessions - but not all

Chapo also said he would save around MZN17 billion ($268m) per year by reducing the number of ministries, replacing deputy ministers with senior civil servants reporting direct to ministers.

Money would also be saved by freezing the buying of official cars, Chapo said.

In comments that may concern international investors, he said all public-private partnership and concession contracts would be renegotiated. However, the day after his inauguration, he clarified that this would not apply to the liquefied natural gas projects being developed by international energy companies like TotalEnergies, ExxonMobil and Eni in the Rovuma Basin. Chapo told the Reuters news agency that because those companies were “currently making investments… there is no place for reviewing contracts, because they haven’t even come into force yet, in terms of operation.”

He said, however, that it was “time for justice” in the mining sector. International reference prices would be used in calculating import and export taxes, he said, and all concessions for “critical minerals” would be subject to public competitions or auctions. In fact, the previous government introduced reference prices for some minerals back in 2023.

New tariffs would be introduced on imports of products that Mozambique makes domestically, Chapo said. International investment would be welcomed in the ports and railways sector, he added, and any non-strategic state-owned companies would be privatised. However, this may not be easy: most state-owned businesses operate at a loss, including airline LAM.

He also promised to reform the visa system to make it easier for tourists and investors to visit Mozambique, and for Mozambican companies to employ specialists from overseas, on a new five-year visa. Chapo also promised a reduction in bureaucracy for companies.

All banks and insurance companies would be forced to list on the Mozambican Stock Exchange (BVM), he said, to allow local investors to share in their success. This may also prove difficult, given that up to now, very few businesses have listed: only 16 in total, according to the BVM website. Chapo also promised to establish a Mozambican Development Bank, although such an institution already exists, in the shape of the National Investment Bank (Banco Nacional de Investimentos, BNI).

Below are the key measures and policy changes announced by President Chapo:

Government restructuring and efficiency

  • Reduction in government size:
    • Eliminate ministries and three secretary of state positions, reducing unnecessary jobs
    • Save MZN17bn ($268m) annually to reinvest in education, health, agriculture, and infrastructure
    • Replace vice-ministers with secretaries of state reporting directly to ministers
  • Revised responsibilities for civil servants and institutions:
    • Redefine the role of permanent secretaries
    • Rationalise state institutions, including merging, eliminating, or reformulating agencies, institutes, and funds

Fiscal responsibility and public spending

  • Cost-saving measures:
    • Freeze acquisitions of government vehicles for officials
    • Divert resources to ambulances and other essential services
  • Privatisation:
    • Privatise or grant concessions for non-strategic public companies and assets
    • Ensure funds generated support critical economic sectors and job creation

Transparency and anti-corruption initiatives

  • Strengthening oversight:
    • Establish a Central Procurement Authority to oversee public acquisitions
    • Create an Inspectorate-General of the State to enforce compliance with transparency and ethics
    • Public annual reporting of procurement results and financial audits
  • Targeting corruption:
    • Combat ghost employees, nepotism, and fraudulent contracts
    • Eliminate inefficiencies and root out misuse of public funds

Education reform

  • Access to educational resources
    • Provide free school textbooks, both in digital and printed formats
    • Standardise textbook revisions to prevent unnecessary expenses
  • Infrastructure development:
    • Build and renovate schools, particularly in rural areas
    • Establish technical schools aligned with market needs
  • Teacher support
    • Improve working conditions for teachers
    • Offer professional development programs

Health Sector Overhaul

  • Healthcare expansion:
    • Equip and expand rural health facilities
    • Introduce mobile health units for remote areas
  • Partnerships and preventative care:
    • Promote public-private partnerships for specialized hospitals
    • Launch national vaccination and health education campaigns
  • Support for healthcare workers:
    • Improve working conditions for healthcare workers
    • Ensure the availability of essential medications

Economic development and private sector growth

  • Industrial policy
    • Revise procurement regulations to encourage local manufacturing
    • Establish long-term contracts with domestic suppliers
  • Ease of doing business
    • Simplify licensing, taxation, and regulatory frameworks
    • Automate licensing for most activities except those posing significant health or security risks
  • Empowering women:
    • Develop initiatives to promote women as leaders, entrepreneurs, and managers
    • Focus on micro-finance and agriculture-led businesses for women

Digital transformation

  • Government modernisation:
    • Establish a Ministry of Communications and Digital Transformation
    • Create a unified digital platform for government services and payments
  • Digital taxation:
    • Introduce taxation for digital transactions to ensure fairness in the digital economy

Security and justice system reform

  • Enhancing public safety:
    • Strengthen the capabilities of law enforcement agencies to tackle kidnappings, drug trafficking, and organised crime
    • Foster community policing to improve neighbourhood safety
  • Judicial efficiency:
    • Decentralise the judiciary by establishing regional courts
    • Reform the penal code to decriminalise minor offences and introduce electronic monitoring systems

Resource management and sustainability

  • Natural resources:
    • Reform the mining sector to ensure equitable distribution of royalties and benefits
    • Strengthen local community engagement in resource management
  • Environmental Conservation:
    • Invest in climate-resilient infrastructure and renewable energy projects

International cooperation

  • Foreign policy goals:
    • Strengthen Mozambique’s role in regional organizations like the Southern African Development Community and the African Union
    • Collaborate with global partners, including the United Nations, World Bank, and International Monetary Fund, to address development challenges

Infrastructure and housing

  • Urban development:
    • Regulate the housing market to make homes affordable
    • Promote the use of locally manufactured construction materials
  • Transport modernisation
    • Encourage private investment in ports and railways to improve competitiveness
    • Focus on critical transport corridors like those serving the ports of Maputo, Beira, and Nacala

Labor and employment

  • Job creation
    • Stimulate the private sector to create jobs, especially for youth
    • Establish a Unemployment and Social Protection Fund to support workers during transitions
  • Workforce development
    • Introduce vocational training programs aligned with market needs

Governance and decentralisation

  • Decentralization framework:
    • Redefine the roles of provincial secretaries of state to focus on oversight and evaluation, while governors carry out policy
  • Public Accountability:
    • Promote citizen participation and hold officials accountable for their performance

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