Potential Mozambican Opportunities

Observations and Analysis of Top Four

Anthony Monge
Executive Summary:
Mozambique is currently experiencing explosive economic growth. However, due to
internal and external forces, they are having a difficult time capitalizing on opportunities
presented to them. This presents to us a prime area in order to expand our influence
and international operations. While there are a multitude of different vectors we could
pursue, there are a few that stand out as providing great rewards while minimizing our
risk exposure. The following are the top four possible ventures along with a short
description of why. They are in descending order of preference:

1. Cultivation and Production of Bio-fuels/Agro-fuels. There are regulations

being put in place by the Mozambican government to require all fossil-fuels to
have a specific mixture of ethanol. However, producers that have current
agreements the Mozambican government are failing to meet the required
production amounts.
2. Cultivation of Timber. There is a vast amount of untapped timber reserves in
Mozambique. These can be harvested and processed for use around the world
(especially in hard hit Japan). Current regulations keep this harvesting at small
amounts due to extreme amounts of illegal logging. Assisting the government in
curbing this illegal activity will allow us to enter this industry.
3. Textile Production. The value stream from cotton to finished product is non-
existent in Mozambique. They grow quite a large amount of cotton, but it is
exported to other regions for processing. If this industry could be retained inside
the country, it would benefit from the tariff relief given to textile imports into North
America.
4. Natural Gas

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Background:
Almost five centuries as a Portuguese colony came to a close with independence in
1975. Large-scale emigration, economic dependence on South Africa, a severe
drought, and a prolonged civil war hindered the country's development until the mid
1990's. The ruling Front for the Liberation of Mozambique (FRELIMO) party formally
abandoned Marxism in 1989, and a new constitution the following year provided for
multiparty elections and a free market economy. A United Nations negotiated peace
agreement between FRELIMO and rebel Mozambique National Resistance (RENAMO)
forces ended the fighting in 1992. In December 2004, Mozambique underwent a
delicate transition as Joaquim Chissano stepped down after 18 years in office. Armando
Emilio Guebuza, his elected successor, promised to continue the sound economic
policies that have encouraged foreign investment in the country1.

Political:
Mozambique is a multi-party democracy that gained independence on 25Jun1975. Its
Constitution was formed in November 1990. There are three branches of government:

• Executive--President, Council of Ministers.

• Legislative--National Assembly, municipal assemblies.
• Judicial--Supreme Court, provincial, district, and municipal courts.

The administrative subdivisions of the country are as follows:

• 10 provinces
• 224 districts
• 33 municipalities, of which Maputo City is the largest.

There are three major political parties: Front for the Liberation of Mozambique
(FRELIMO); Mozambican National Resistance (RENAMO); and the Democratic
Movement of Mozambique (MDM). There are also numerous small parties but none of
them nave a true impact on the government. Suffrage is universal adult (18 years and
older)2.

Crime is a growing problem, particularly in the cities, which have been flooded with poor
unemployed men from the countryside seeking work. The justice system was fashioned
after the Portuguese model. However, without enough qualified judges and lawyers, this
system could not function well, so FRELIMO modified it. Because prison facilities could
not accommodate the large number of criminals, the government established
rehabilitation camps (usually farms) for minor offenders and alcoholics (FRELIMO

3
considered alcoholism a crime). FRELIMO also set up vigilante groups of citizens to
turn in alcoholics and anti-government individuals. One of the most pressing problems is
violations of human rights on the part of law enforcement agents, and the mistreatment
of criminals and suspects.

Economy:
At independence in 1975, Mozambique was one of the world's poorest countries.
Socialist mismanagement and a brutal civil war from 1977-92 exacerbated the situation.
In 1987, the government embarked on a series of macroeconomic reforms designed to
stabilize the economy. These steps, combined with donor assistance and with political
stability since the multi-party elections in 1994, have led to dramatic improvements in
the country's growth rate. Fiscal reforms, including the introduction of a value-added tax
and reform of the customs service, have improved the government's revenue collection
abilities. In spite of these gains, Mozambique remains dependent upon foreign
assistance for more than half of its annual budget, and the majority of the population
remains below the poverty line. Subsistence agriculture continues to employ the vast
majority of the country's work force and smallholder agricultural productivity and
productivity growth is weak. A substantial trade imbalance persists although the opening
of the Mozal aluminum smelter, the country's largest foreign investment project to date,
has increased export earnings. At the end of 2007, and after years of negotiations, the
government took over Portugal's majority share of the Cahora Bassa Hydroelectricity
(HCB) Company, a dam that was not transferred to Mozambique at independence
because of the ensuing civil war and unpaid debts. More power is needed for additional
investment projects in titanium extraction and processing and garment manufacturing
that could further close the import/export gap. Mozambique's once substantial foreign
debt has been reduced through forgiveness and rescheduling under the IMF's Heavily
Indebted Poor Countries (HIPC) and Enhanced HIPC initiatives, and is now at a
manageable level. In July 2007 the Millennium Challenge Corporation (MCC) signed a
Compact with Mozambique; the Compact entered into force in September 2008 and will
continue for five years. Compact projects will focus on improving sanitation, roads,
agriculture, and the business regulation environment in an effort to spur economic
growth in the four northern provinces of the country. Mozambique grew at an average
annual rate of 9% in the decade up to 2007, one of Africa's strongest performances.
However, heavy reliance on aluminum, which accounts for about one-third of exports,
subjects the economy to volatile international prices. The sharp decline in aluminum
prices during the global economic crisis lowered GDP growth by several percentage
points. Despite 8.3% GDP growth in 2010, the increasing cost of living prompted
citizens to riot in September 2010, after bread price increases were announced. In an
attempt to contain the cost of living, the government implemented subsidies, decreased
taxes and tariffs, and instituted other fiscal measures (Appendix C gives a detailed

4
breakdown of Mozambique’s economic stance). Since 2004, the Bank of Mozambique
has undertaken reform of its major policy initiatives to strengthen monetary
management through daily liquidity forecasting and the use of foreign exchange and
Treasury bill sales.

Government at the sub-national level in Mozambique consists of 33 independent

municipalities, each with its own budget, and ten provinces, plus 124 districts belonging
to the central government. The reform currently underway to disengage the state from
the economy has clarified the role of the central government and its relationship with the
private sector by liberalizing markets and prices and giving greater autonomy to state
enterprises.

The government's heavy equity participation in private enterprises reflects

Mozambique’s past interventionist policies. Public enterprises, and the limits on their
activities and independence with respect to the government, are clearly defined by law,
and the state controls 100 percent of their capital. The enterprises that have been
privatized, or are in the process of privatization, were holdovers from the time prior to
the early 1990s when the state dominated the economy. As a result of that tradition, the
government also has shareholdings in a large number of productive enterprises: it owns
more than 80 percent of the capital in ten companies, and holds a minority interest (less
than 50 percent) in a further 70 companies including banks. Government plans call for
the gradual reduction of these interests. There is still a program for granting
concessions for railroads and port activities.

Importers/exporters in Mozambique must be licensed by the Ministry of Commerce3.

Importers/exporters may become wholesalers or retailers (but not both) after obtaining a
"licence to carry out a productive activity" from the Ministry of Industry and Trade. Any
economic operators (including importers) that wish to become distributors in urban
areas are required to specialize in a selected activity (chosen from among 21 classes of
products); however, specialization is not required in rural areas, where trading
establishments typically supply a wide range of goods to customers4. Licence
applications are to be accompanied by the appropriate documents indicating proof of
identity (for natural persons) or enrolment in the companies register (for legal persons);
tax registration; the contract, title or lease to the premises to be used for the
commercial activity; and a drawing of these premises. Mozambican traders are issued
with a numbered importer/exporter card.

Although in recent years the Bank has provided no financing to the budget, and has not
engaged in any apparent quasi-fiscal activities, the central bank's legislation does not
specifically prohibit such activities. The Bank of Mozambique is legally independent. It

5
has the status of a public enterprise, with a mandate to preserve the value of the
national currency, and it enjoys administrative and financial autonomy. The Bank of
Mozambique's annual operational balance is distributed as follows: 50 percent is
transferred to the state budget, and the remainder is used to capitalize the Bank of
Mozambique itself. An independent committee sets both the rediscount interest rate and
the norms for bank participation in open market operations. The country has a floating
exchange rate regime, and there is no direct control by the Bank of Mozambique.
The Framework Law partially regulates public finances. Some stages in the expenditure
process, for example, commitment and verification, are neither defined nor recorded.
The lack of such records makes it impossible to identify the existence of any payment
arrears during budget execution. The law allows a supplementary budgetary period of
three months. This excessively long carry-over period means that during the first quarter
of the fiscal year expenditures may be imputed to either the past or current year budget.
It also lengthens the time taken to consolidate and audit the public accounts. A
comprehensive public finance law is needed to consolidate all aspects of budgetary
preparation, execution, records and accounting, control, and accountability. The
authorities are proposing some reforms in this area and moving toward a
comprehensive law.

The levying of all major taxes is fully covered by legislation. For more than 90 percent of
tax revenues--including Value Added Tax (VAT), excise taxes, and customs duties--
there exists clear, up-to-date legislation with supporting published regulations and
procedures. For the remaining taxes--taxes on income and profits and other taxes and
duties--legislation either is unclear or out-of-date, but the authorities are planning
reforms in this area. The VAT law of 1999 reduced discretionary concessions
considerably, and these are now low. Information on the major taxes is also widely
available through brochures and circulars. Information on customs procedures and the
entire customs tariff, data on exports and imports, and simplified and standard
documents are available over the Internet. However, transparency of some tax
exemptions (import duties, VAT, and consumption tax) granted for noninvestment
purposes could be improved by using means such as specific budgetary allocations.

Cultural:
The culture that prevalent in Mozambique today is similar to what was experienced in
the United States in the 1920’s and 1930’s. This is predominately seen in the concept
of women in the workplace and the position of children. Items of note are highlighted
below.

Division of Labor by Gender: The constitution guarantees all citizens the right to
work, but women often face obstacles when they seek nontraditional employment.

6
Women have historically been responsible for all domestic tasks. In the towns and
cities, they generally are confined to the home, whereas in rural areas, they play an
important role in the agricultural labor force.

The Relative Status of Women and Men: According to the constitution, men and
women have equal rights. However, both traditional and colonial attitudes keep women
in a somewhat subordinate position. Even within the ranks of FRELIMO, which declared
itself a proponent of women's rights, women have not attained positions of power.

Marriage: Polygamy is traditionally practiced and until recently was quite common. In
1981, FRELIMO instituted a law that established monogamous marriage, and by which
both spouses share ownership of property and decisions about where to live. The law
also entitled women to a means of maintenance and specified the responsibilities of
fathers in financially supporting their children. Marriage celebrations involve feasting,
music, and dancing.

Domestic Unit: The traditional family includes several generations living together under
one roof. However, in many areas, this family structure has been dismantled by the civil
war, which took many lives, compelled many men to emigrate from rural areas to the
cities or to neighboring countries, and left large numbers of children orphaned or
abandoned.

Inheritance: Tribes north of the Zambezi River follow a matrilineal model of inheritance.
They trace their ancestry through the mother's side, and at marriage the man becomes
part of the woman's family.

Infant Care: Young children rarely are separated from their mothers. It is customary for
women to tie their babies to their backs with a strip of cloth and take them along when
they work in the fields.

Child Rearing and Education: Children are treated with affection but are expected to
defer to their elders and often begin to work at a young age. After the civil war, as many
as half a million children were left without families. Many of these children wander
Maputo and other cities and stay alive by stealing or selling small items on the street.
Relief organizations have alleviated the problem somewhat by caring for and educating
children, and reuniting families. Because of the Portuguese legacy of suppressing
education in colonies, Mozambique was estimated to have a literacy rate of only 10
percent when it gained independence in 1975. The first post independence government
made raising this number a priority and instituted compulsory education for children
between the ages of six and twelve. This program was largely disrupted by the civil war.

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When the war ended in 1995, the literacy rate was 40 percent and only 60 percent of
primary-school-age children were in school. Only 7 percent of children were enrolled at
the secondary level. Since the peace treaties were signed, these numbers have begun
increasing, but the destruction of many school buildings and a lack of trained and
educated teachers have left the country with a problem that will not be soon eradicated.
There are three institutes of higher education that enrolled a total of seven thousand
students in 1995. Eduardo Mondlane in Maputo is the only university.

Etiquette: Due to Mozambique being a Portuguese colony for so many centuries, they
have adopted the same etiquette model. Greetings are lengthy and involve inquiring
into the health of each other's family. People generally stand close together and are
physically affectionate.

When doing business in Mozambique, the following list provides the highlights of
expected etiquette and protocol5:
• Building Relationships & Communication
o Mozambicans prefer to do business with those they feel comfortable with,
which means those that they know they can trust. Therefore, it is
advisable to have a mutual contact provide the initial introduction.
o Expect to invest a great deal of time developing the relationship.
o Mozambicans prefer face-to-face meetings rather than written or
telephonic communication, which are seen as too impersonal.
o Relationships are built with people, not companies.
o If you change representatives or people on a negotiating team once
negotiations have started, the relationship-building process will have to
begin again.
o It is important that you treat business colleagues with respect and not do
anything to embarrass them.
o Communication is formal and relies on strict rules of protocol.
o If your Mozambican business colleagues have questions or want
clarification during a presentation, they will wait until you have finished
speaking and not interrupt.
o Although honest, Mozambicans do not volunteer information unless
solicited, especially if remaining silent is in their best interest.
o Although the Mozambicans are not emotive speakers and do not use hand
gestures, they may be demonstrative when greeting friends.
o If you tend to use hand gestures while speaking, you may wish to
moderate your behavior since it may incorrectly be viewed as overtly
demonstrative.
o Mozambique is a hierarchical culture that respects age and position.

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 o Defer to those in senior positions and maintain a sense of formality in
written communication.
o Do not be concerned if your Mozambican colleagues fail to follow through
on promises.
o They have a more relaxed attitude towards time and do not see deadlines
as crucial as people from many other cultures do.
o They do not appreciate direct criticism, even if you consider it to be
justified
• Business Meeting Etiquette
o Appointments are mandatory and should be made 1 to 2 weeks in
advance.
o Reconfirm the meeting a few days in advance.
o Initial correspondence should be written in Portuguese.
o You should arrive on time for meetings.
o In many circles, 5 minutes late is considered on time.
o Punctuality displays respect for the person you are meeting. If you are
kept waiting, it is important that you not appear irritated.
o A fair amount of getting-to-know-you conversation may take place before
the business conversation begins.
o Agendas serve as starting points for discussions; they do not serve as
schedules.
o Presentations should be well thought-out, thorough, and backed up with
charts and figures.
o Decisions are not reached at meetings.
o Maintain eye contact when speaking.
o Meetings may be interrupted.
o Do not remove your jacket unless your business associates do so first.
• Negotiating
o Mozambicans put great importance on the character of the person with
whom they do business, so they will take time to get to know you.
o Wait for your Mozambican colleagues to bring up business. Never rush
the relationship-building process.
o Mozambicans are very thorough and detail-oriented.
o Mozambicans prefer to do business for the long-term although at times
they focus on short-term gains.
o Business is conducted slowly. You must not appear impatient.
o Have printed material available in both English and Portuguese.
o Do not use high-pressure sales tactics. Mozambicans are offended by
aggressive behavior.
o Mozambican business is hierarchical. The highest-ranking person makes

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 decisions.
o Contracts are respected.

The Geert Hofstede comparisons are provided in Appendix A. Professor Geert

Hofstede did not study Mozambique as a country to generate its own standings.
However, Portugal, East Africa, and South Africa are presented to give a concrete idea
of where the American culture meets the
Mozambican culture.

Legal:
Mozambique has serious problems with its
governance and anti-corruption framework.
Government accountability (executive, legislative,
judicial) and the civil service are all rated as very
weak. Voting is generally inclusive, but lack of
election monitoring mechanisms and regulations
for political financing make for very weak
elections in Mozambique. No laws limit individual
or corporate donations to candidates and political
parties and there are no limits on political party
expenditure. Additionally, there is no law
requiring disclosure of donations, auditing or oversight of the political financing process.
Whistleblower protections are generally ineffective6. Appendix B details the scores and
the scoring mechanism used in each of the six areas sampled. The code of laws
generated by the Mozambican legislature is very
Figure 1: Global
strict in combating corruption. However, the enforcement Integrity
of those laws Index
does not
happen. In addition, the judiciary does not follow the law very well when it comes to
deciding cases. The judiciary branch, while fairly chosen, is effectively separated from
the populace. They do not have to account for their actions and conflicts of interest are
prominent. This is also true for the legislative branch. The voting regulations are similar
to what is found here, its enforcement is lacking. The legislature does not have to
withstand scrutiny by the citizens. Taxation and customs equability and enforcement are
fair and comparable to what you will find in the United States. Law enforcement by the
police force is very poor. Police tend to use their position to extort money from the local
population and are not held accountable for their actions. In fact, citizens have been
jailed for reporting such actions to law enforcement officials7.

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Despite the government's strong anticorruption
rhetoric, corruption in the executive and legislative
branches was widely perceived to be endemic in
2009. The World Bank's Worldwide Governance
Indicators reflected that corruption was a serious
problem, with no change in ranking from the
previous year. For the second year running, the
country dropped in Transparency International's
2009 Corruption Perception Index (from 126 to
130), indicating that corruption remained rampant.
Petty corruption by low-level government officials to
supplement low incomes, and high-level corruption
by a small group of politically and economically
connected elites continued to be the norm.
Corruption largely resulted from a lack of checks
and balances, minimal accountability, and a culture
of impunity. Local non-governmental organizations Figure 2: Mozambique's
Uniquegroups
(NGOs), such as the Center for Public Integrity, and media Integrity Indicators
continued to be the
main civic forces fighting corruption, reporting and investigating numerous corruption
cases. The law requires that all members of the government declare and deposit their
assets with the Constitutional Council, but does not require that such information be
made available to the general public8.

Crime: Although the vast majority of visitors complete their travels in Mozambique
without incident, the most serious threat facing U.S. citizens visiting Mozambique is
crime. Street crimes, including mugging, purse-snatching and pick-pocketing are
common, both in Maputo and in secondary cities. Carjacking is increasingly common.
Visitors must be vigilant when out in public areas and should not display jewelry or other
expensive items. Isolated areas should be avoided. Joggers and pedestrians have
frequently been mugged, even during daylight hours. Visitors should take caution when
walking at night, even in well-known tourist areas. Mozambican police are not at the
standard U.S. citizens are accustomed to in the United States and visitors should not
expect the same level of police service.

Many airline trips from Mozambique to the U.S., Europe, or African destinations transit
Johannesburg, South Africa. Baggage pilferage is an ongoing problem at
Johannesburg's Oliver Tambo International Airport. Travelers are encouraged to secure
their luggage, use an airport plastic wrapping service, and avoid placing currency,
electronics, jewelry, cameras, cosmetics, running shoes, or other valuables in checked

11
luggage. Having a complete inventory of items placed in checked baggage can aid in
processing a claim if theft does occur9.

With respect to forest and land development, two sets of laws govern and protect forest
resource stakeholders: the Land Law of 1997 and the Forestry and Wildlife Law of
1999, with regulations approved only in 2002. The Land Law (1997) recognizes and
protects traditional rights to land, including forests. The Forest and Wildlife Law (1999)
delineates the rights and benefits of forest dependent local communities, such as:
subsistence level use of the resources; participation in the co--management of forest
resources; community consultation and approval prior to allocation of exploitation rights
to third parties; development benefits derived from timber production under a
concession regime.

The Land Law of 1997 recognizes community’s rights to land and makes community
consultation compulsory when assigning rights of use to a second party. It also has a
limited recognition of customary rights as a means to defend women’s rights (. Although
communities can utilize any forest product for their own consumption, they are not
allowed to commercialize these products without a license.
The Forest and Wildlife Law was aimed at sustainable forest resource management,
and to create a more effective structure for the generation and distribution of related tax
revenue. Central to this law is the concept of Community Based Natural Resource
Management (CBNRM), which has been largely embraced in Southern Africa as a
decentralization process aimed at giving grass roots institutions the power of decision
making and rights to control their resources.

One of the main drawbacks of the Forest Law is that it does not include the criteria of
occupancy in relation to communities claiming resource rights. The law only offers some
protection in relation to subsistence activities. Therefore, it has to be concluded that the
two laws governing forest utilization contradict each other substantially, as the Land
Law enables the transfer of real rights to land, while the Forest and Wildlife Law restricts
resource use to non-commercial subsistence levels only, making compulsory the
application for a license for commercial resource use. Thus, the Forest and Wildlife Law
puts local communities on the same playing field as the private sector and international
companies, which means they have to apply for licenses and implement management
plans in the same way as does the private sector, despite the fact that they lack both
financial and technical resources to do so.

Geography and Climate:

The Republic of Mozambique is located in the southeastern coastal area of the African
continent. The countries that are sharing their borders are Tanzania, Malawi, and

12
Zambia in the northern side, South Africa and Swaziland in the southwestern side;
Zimbabwe in the western side and in the eastern region there is the Mozambique
Channel. The country also borders the Indian Ocean in the eastern zone.

Mozambique is situated in the southeastern region of Africa. The face of the country is
full of uplands, lowlands and several tablelands spread all over. A big part of the country
is covered by the coastal areas. The western region of the country is primarily
mountainous. You will also find grasslands and sea beaches along with sand dunes
spread throughout the country. The river Zambezi is a great source of power in
Mozambique. It flows from the western region towards the eastern over the country. For
this the country is divided in two halves that are the northern and the southern parts of
the country. The climates of these two parts also differ a little. Appendix D contains
detailed information on the geography of Mozambique.

The climate of the country Mozambique can be termed as tropical to some extent. The
two prominent seasons in this country are the wet season and the dry season. The
weather during the months between November and March remains humid. On the other
hand the months between April and October are arid. Rainfall becomes very rare in this
period. In the year 1999, Mozambique faced a desolating flood10.

Mozambique has great vegetation in the various parts of the country. Plants like
mahogany, ebony, ironwood etc grow in large number in the forests of Mozambique.
Various species of trees grow in the Mozambique climate. The animal life of the country
Mozambique is also very rich with various unique species. The mountainous regions are
epically known for different types of animals. Many species of Elephants, water buffalo,
giraffes, zebras, lions etc are found in a large number in the country. Hippopotami and
crocodiles are also found in the water bodies of the country. Mozambique has also
organized some Parks for the protection of these animals.

Social:
Vaccinations: A yellow fever vaccination certificate is required of travelers over one
year of age arriving from countries with infected areas. Following WHO guidelines
issued in 1973, a cholera vaccination certificate is not a condition of entry to
Mozambique. However, cholera is a serious risk in this country and precautions are
essential. The last major outbreak was in March 2004. Up-to-date advice should be
sought before deciding whether these precautions should include vaccination, as
medical opinion is divided over its effectiveness. Immunization against typhoid and
poliomyelitis is often advised.

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Food and Drink: All water should be regarded as being potentially contaminated.
Water used for drinking, brushing teeth or making ice should have first been boiled or
otherwise sterilized. Some milk is unpasteurized and should be boiled. Powdered or
tinned milk is available and is advised, but make sure that it is reconstituted with pure
water. Avoid dairy products that are likely to have been made from unboiled milk. Only
eat well-cooked meat and fish, preferably served hot. Pork, salad and mayonnaise may
carry increased risk. Vegetables should be cooked and fruit peeled.

Other Risks: Diarrheal diseases, giardiasis, dysentery and typhoid fever are all
common. Bilharzia (Schistosomiasis) is present. Avoid swimming and paddling in fresh
water; swimming pools that are well chlorinated and maintained are safe. Hepatitis A, B
and E is present. Meningococcal meningitis may occur. Human trypanosomiasis
(sleeping sickness) has been reported. Plague has been reported in remote areas.
Visitors should also be wary of the dangers of Tetanus. There is a high level of
HIV/AIDS reported; travelers should take all necessary precautions. Rabies is present.
For those at high risk, vaccination before arrival should be considered. If you are bitten,
seek medical advice without delay.

Health Care: Full health insurance, preferably including Medevac, is essential. Medical
facilities are scarce. Many rural health centers were forced to close during the conflict
with the MNR rebels. It is advisable to carry basic medical supplies including
medications and sterile syringes. Malaria risk exists throughout the year, particularly in
the north. The predominant falciparum strain is reported to be highly resistant to
chloroquine and resistant to sulfadoxine-pyrimethamine. Travelers should bring a
mosquito net. The recommended prophylaxis is mefloquine.

Affiliated Organizations:
Southern African Development Community (SADC)11
It is an inter-governmental organization headquartered in Gaborone, Botswana. Its goal
is to further socio-economic cooperation and integration as well as political and security
cooperation among 15 southern African states. It complements the role of the African
Union.

SADC aims are set out in different sources. The sources include the treaty establishing
the organization (SADC treaty); various protocols (other SADC treaties, such as the
corruption protocol, the firearms protocol, the OPDS protocol, the health protocol and
the education protocol); development and cooperation plans such as the Regional
Indicative Strategic Development Plan (RISDP) and the Strategic Indicative Plan of the
Organ (SIPO); and declarations such as those on HIV and AIDS and food security. Not

14
all of the pre-2001 treaties and plans have been harmonized with the more detailed and
recent plans such as the RISDP and SIPO.

In some areas, mere coordination of national activities and policies is the aim of
cooperation. In others, the member states aim at more far-reaching forms of
cooperation. For example, on foreign policy the main aim is coordination and
cooperation, but in terms of trade and economic policy, a tighter coordination is in
progress with a view to one day establishing a common market with common regulatory
institutions.
The organization has eight principal bodies:
• The Summit, comprising heads of state or heads of government, is at the top.
• Organ on Politics, Defense and Security (OPDS), the
• Council of Ministers,
• Tribunal,
• SADC National Committees (SNCs), and the
• Secretariat.
Except for the Tribunal (based in Windhoek, Namibia), SNCs and Secretariat, decision-
making is by consensus.

African Union (AU):

The advent of the African Union (AU) can be described as an event of great magnitude
in the institutional evolution of the continent. On 09Sep1999, the Heads of State and
Government of the Organization of African Unity issued a Declaration (the Sirte
Declaration) calling for the establishment of an African Union, with a view, inter alia, to
accelerating the process of integration in the continent to enable it play its rightful role in
the global economy while addressing multifaceted social, economic and political
problems compounded as they are by certain negative aspects of globalization.

The main objectives of the OAU were, inter alia, to rid the continent of the remaining
vestiges of colonization and apartheid; to promote unity and solidarity among African
States; to coordinate and intensify cooperation for development; to safeguard the
sovereignty and territorial integrity of Member States and to promote international
cooperation within the framework of the United Nations. Indeed, as a continental
organization the OAU provided an effective forum that enabled all Member States to
adopt coordinated positions on matters of common concern to the continent in
international foray and defend the interests of Africa effectively12.

Through the OAU Coordinating Committee for the Liberation of Africa, the Continent
worked and spoke as one with undivided determination in forging an international
consensus in support of the liberation struggle and the fight against apartheid. The

15
vision of the AU is:
• The AU is Africa's premier institution and principal organization for the promotion
of accelerated socio-economic integration of the continent, which will lead to
greater unity and solidarity between African countries and peoples.
• The AU is based on the common vision of a united and strong Africa and on the
need to build a partnership between governments and all segments of civil
society, in particular women, youth and the private sector, in order to strengthen
solidarity and cohesion amongst the peoples of Africa.
• As a continental organization it focuses on the promotion of peace, security and
stability on the continent as a prerequisite for the implementation of the
development and integration agenda of the Union.

The Southern African Regional Poverty Network (SARPN):

SARPN is a non-profit organization that promotes debate and knowledge sharing on
poverty reduction processes and experiences in Southern Africa. SARPN aims to
contribute towards effective reduction of poverty in the countries of the Southern African
Development Community (SADC) through creating platforms for effective pro-poor
policy, strategy and practice. SARPN achieves this goal through widening participation,
bringing people together across the region to exchange ideas, and disseminating
information to deepen understandings of poverty issues and improve policy and
practice. SARPN was originally established as a project of the Human Sciences
Research Council in 2001. In 2004 it became an independent regional entity, supported
by a board of 20 regional policy makers, academics and civil society members.

SARPN is undergoing a strategic reorientation following a decision by its Board to

redefine its status and focus as an independent NGO. Discussions with various partner
organizations are ongoing, aimed at repositioning SARPN within the regional context in
which it operates. The Human Sciences Research Council (HSRC) is meanwhile
hosting SARPN, pending the outcomes of this strategic review. Below is a more
detailed outline of SARPN’s purpose:
• Mode of operation
o Knowledge management
o Collecting and disseminating information
o Undertaking commissions / studies
o Providing commentaries
• Building linkages
o Developing directories and databases of stakeholders
o Coordinating networks / discussion groups
o Linking stakeholders
• Promoting debate

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o Convening events / debates that examine issues of policy relevance
o Facilitating the participation of marginalized groups in discussions
o Promoting discussion across conventional barriers - including borders,
institutional frameworks and sectors

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