4 April 2006
Maputo — The Mozambican parliament, the Assembly of the Republic, on Tuesday reopened the debate on a proposed currency reform, following an appeal by deputies of the former rebel movement Renamo to the Constitutional Council, asking to have the reform annulled as unconstitutional.
Back in November the Assembly passed a government bill intended to make the Mozambican currency, the metical, more manageable, by lopping off the last three digits.
The bill established a rate of conversion of one to a thousand. Thus the current 1,000 metical coin will be worth one metical in what the government refers to as the "new family" of the currency. The largest current banknote, for 500,000 meticais, will be worth 500 meticais in the "new family".
Renamo supported the first reading of this bill, but voted against the second. It now claims that, since this is a change in the currency, it is effectively a constitutional amendment and so requires a two thirds majority in the Assembly - which the ruling Frelimo Party, on its own, does not have.
Frelimo and the government deny that there is any substantial change to the currency. The country's currency remains the metical - but instead of talking routinely about millions of meticais, after the reform it will be more normal to talk in terms of thousands.
The government stresses that the metical is not being abolished, and the country is not embracing a new currency. All that is happening is a simple mathematical operation - division by a thousand. The name of the currency is unchanged and the old notes and coins will remain legal tender for a lengthy transition period, as they are gradually withdrawn from circulation.
The central bank proposed the reform to the government for reasons of efficiency and convenience. Book-keeping is more difficult, and more prone to errors, when sums have to be written in millions or billions.
Following Renamo's appeal to the Constitutional Council, the Council asked the Assembly for its written opinion. On Tuesday, the chair of the Assembly's Legal Affairs Commission, Ali Dauto, read out this opinion to the plenary. Extremely long, dry, and brimming with quotes from previous laws, this opinion essentially restated the Assembly position of November - namely that there is nothing remotely unconstitutional about knocking three zeroes off the metical.
The five Renamo members on the Commission submitted a minority position, again harping on the need for a two thirds majority to make any change in the currency.
In the ensuing debate senior Frelimo parliamentarians denounced Renamo for changing the grounds on which it opposed the reform. Virginia Videira, chairperson of the Plan and Budget Commission, reminded the Assembly that last year Renamo's main objection had nothing to do with the constitution - at the time the debate on changing the country's flag and national emblem was still under way, and Renamo's concern was that the old emblem should not appear on the new banknotes.
In the working Commissions, Videira recalled, prior to the debate in plenary session, "Renamo did not raise the question of constitutionality. It was only after they lost the argument about the national symbols, that they fell back on arguments about a two thirds majority".
A secondary Renamo argument, she recalled, was fear that future banknotes might contain images of "figures who are not consensual" - by which Renamo clearly meant President Armando Guebuza.
Acucena Duarte added that Renamo had even demanded that, before being printed, the designs for the new notes should be voted on in the Assembly. "Their arguments made no sense", she said. "They had no legal basis. They were just designed to obstruct, and so the majority rejected them".
Renamo deputy Luis Boavida declared "we reaffirm the validity of all the arguments in our appeal to the Constitutional Council. We are consistent and coherent".
He demanded that all relevant documentation be sent to the Council - but insisted that it be put before the plenary first, apparently for fear that Frelimo might alter the documents.
"What is this change that doesn't alter anything?", asked Renamo's top jurist, Maximo Dias. He claimed that the reform amounted to "an intrinsic change" to the currency, and therefore required a two thirds majority.
Frelimo deputy Feliciano Mata noted that in November Renamo had even accepted that the currency reform would have a "positive impact on the economy". The Economic Activities and Services Commission, he recalled, had accepted the Renamo position that, if national symbols were to appear on the notes, printing them should wait until the debate on the symbols was over. (In the event, Renamo lost that debate, and the flag and emblem remain unchanged.) "The Renamo strategy is political, economic and social destabilisation", exclaimed Mata. "They try to hold back the forces of change with their hands".
A motion on the opinion from the Legal Affairs Commission will be submitted and voted upon on Wednesday.
Meanwhile, the Bank of Mozambique is pushing ahead its preparations for the introduction of the new banknotes and coins.
As from 1 April it became compulsory for shops and other business to indicate their prices both in the existing meticais, and in the "new family" meticais. Posters and leaflets explaining the changes have been distributed all over the country, and the new notes should be unveiled on 1 July.
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