Maputo — The Mozambican government has decided that the state housing body, APIE, will no longer collect the rent on those houses nationalised after independence, and which have not yet been purchased by their tenants.

According to the government spokesperson, Deputy Education Minister Luis Covane, briefing reporters after Tuesday's meeting of the Cabinet, the Mozambican Tax Authority (AT) will now be responsible for collecting the rents. All APIE assets and staff linked to rents will be transferred to the AT.

Covane said that in the current context, where most of the houses have been sold, there is no reason for APIE to continue being responsible for collecting rents for the few remaining state-owned houses and flats.

"The management of state housing still remains with APIE, but the duty of collecting the rents is now with the AT, because that is part of its duties", said Covane. "The AT was created by a 2006 Law, giving it the power to control public revenue. All APIE assets concerning the collection of rents are now transferred to the AT".

APIE was set up after the Mozambican government nationalized all rented housing in February 1976. This sweeping measure destroyed the power of landlords (most of whom were Portuguese, including many absentees). APIE was set up to run the nationalized housing stock and to collect rents which initially were fixed at a low percentage of the tenant's salary.

APIE once controlled about 70,000 properties, but for the past 17 years it has been possible for APIE tenants to purchase their homes, and most have chosen to do so.

As a result, the number of APIE-run properties has dropped to 10,000. The rent from these earns the state 54 million meticais (about 2.2 million US dollars) a year.

Covane explained that this transfer of powers does not mean the extinction of APIE, because this institution will continue to manage state-owned buildings. APIE's management is questionable, since it has never had enough funds to undertake significant repairs and maintenance of the housing stock. Tenants have had to deal with maintenance themselves.

Covane's position marks a change from the announcement made some months ago by the Ministry of Public Works and Housing that the government planned to abolish APIE completely.

Covane also announced that, under government plans to revive the textile industry, about 100,000 jobs will be created by 2012. He said that the government strategy is to ensure the vertical integration of cotton production, textiles and clothing. He promised a drive to increase cotton production, improve the business environment and the market for textile producers, and guarantee electricity supplies.

Covane envisaged new textile companies springing up in tax-free special economic zones in Beluluane (just outside Maputo), in the port of Nacala, and in Dondo, in Sofala province. All these places have good road access, are close to ports, and have guaranteed water and power supplies. The government envisages 40,000 textile jobs in the Beluluane special economic zone, 30,000 in Nacala and 30,000 in Dondo.

Mozambican textile and clothing businesses have long complained that they face unfair competition from second hand clothes dumped on the country in the name of poverty alleviation. Covane admitted that this was a real dilemma - on the one hand, Mozambicans living on or below the poverty line cannot afford new clothes. On the other, huge amounts of second hand clothing destroy the local industry.

"We will have to learn and live with this situation", said Covane. "It solves one problem but is a block on the development of the sector. Used clothes are an opportunity, but they are also a threat. We will have to find ways of making the textile industry function, so that it can compete on the international market".

One hope is to export Mozambican clothing to the United States, free of duties, under the African Growth and Opportunity Act (AGOA). "We will have to mobilise the private sector to take advantage of the facilities that are offered to us", said Covane. "We want the country to stop simply being a source of raw materials, and to produce manufactured goods".

Mozambique was once a significant textile producer, but all its large textile factories (such as Texlom in Matola, or Textafrica in Chimoio) have been paralysed for many years.