Namaacha — Over the past four years, per capita GDP in Mozambique has increased by over 50 per cent, according to the spokesperson for the government, Deputy Education Minister Luis Covane.

Briefing reporters on Monday on the initial sessions of a two day government retreat in the southern town of Namaacha, Covane said that per capita GDP was 301 US dollars in 2004, rising to 356 dollars in 2006, and reaching 473 dollars in 2008.

During the morning the meeting, which included not only members of the government, but also provincial governors, and senior members of the parliamentary group of the ruling Frelimo Party, heard a report from Prime Minister Luisa Diogo who laid out a balance sheet of the government's activities for the past four years.

The macro-economic picture remained positive, despite the recession in Europe and America. According to Covane, Mozambique's economic growth rate was 7.9 per cent in 2004, and 8.5 per cent in 2006.

In 2008, there was a slowdown - nonetheless economic growth, at 6.5 per cent, was greatly in excess of population growth. For 2009, added Covane, the forecast is for a growth rate of between six and eight per cent.

The government's top priority remains the defeat of absolute poverty. Covane confirmed that the target is to bring the proportion of people living below the poverty line from 54 per cent (the figure ascertained by the 2003 household survey) to 45 per cent by the end of the government's term of office this year.

Covane stressed that the government had dealt with the crisis of soaring fuel prices in 2008, by subsidizing the diesel used by private transport operators, and by temporarily waiving customs duties and value added tax (VAT) on diesel.

Following the recent slump in oil prices, these emergency measures have been lifted. More permanent solutions to the urban transport problems were sought by boosting the capacity of the publicly-owned bus companies. Over the past four years, 165 new buses have been imported for the main cities, 100 of them in 2008 alone.

But Covane admitted that the credit crunch is affecting the availability of funding for major new investment projects in Mozambique. He named two massive projects in particular that are now being "rescheduled" - the Mphanda Nkuwa dam on the Zambezi, and an oil refinery at Nacala, in the northern province of Nampula.

These are key investments, not only for the Mozambican energy sector, but for the whole southern African region. Covane said that government does not yet have sufficient data to allow it to say when work would begin on either the dam or the refinery.

As for the titanium bearing heavy sands in Chibuto district, in the southern province of Gaza, the government was not aware of any definitive decision taken by the investor, the mining company BHP-Billiton, as to the future of this project.