Mozambican trade unionists criticize privatization for causing unemployment while the government says that privatization creates more jobs. Among the hundreds of companies (mostly very small) that have been privatized, both sides can find examples to back up their case. In some cases, new owners of smaller companies, far from resuming production, used business premises as warehouses. In one extreme example, a new owner turned the building of the company he had acquired into a church.
Occasionally, flagrant abuses led the government to cancel a privatization plan and retain the company under state ownership until another tender could be arranged. This happened in 1996 with the Maputo mattress factory, Morfeu, after the new owner failed to pay the company's debts, pay his workers on time or draw up an investment plan.
The government says such cases are not representative and that most privatized firms are functioning reasonably well. President Joaquim Chissano told parliament in March 1999 that while some privatized companies had laid off staff, others had hired new workers and that, in total, the number of jobs had increased by 40 per cent.
President Chissano said that when the privatization programme began in the late 1980s, only 42 per cent of state companies were operational. The rest were paralyzed or "semi-paralyzed." Today, 77 per cent of privatized companies are working, he said. Ten per cent are undergoing rehabilitation and 13 per cent are still inactive.
The government claims that "90 per cent" of privatized companies have been sold to Mozambicans. This is true, but most of the big companies are in the other 10 per cent. The country's three cement factories are now owned by the Portuguese cement giant, CIMPOR; the country's only glassware factory is in the hands of another Portuguese firm, Barboso e Almeida; and two of the three breweries were sold to South African Breweries (SAB).
The breweries, run as a company called Cervejas de Moçambique
(CDM), are an example of a highly successful privatization. SAB
invested heavily in new machinery, and production at two breweries,
in Maputo and Beira, tripled between 1995 and 1998. This relatively
cheap local beer is available all over southern and central Mozambique,
and has destroyed the once thriving trade in smuggled South African
beer. The government benefitted too. Taxes paid by the breweries
rose by 700 per cent. By 1998, CDM provided about 5 per cent of
total tax revenue. The brewery workers also are doing well. CDM
pays a minimum wage equivalent to $96 a month, more than two-and-a-half
times the statutory minimum. CDM was the first company quoted
on the Mozambican stock exchange, which opened in October 1999.
