Angola has faced significant economic challenges due to the sharp drop in oil prices since 2014. Oil accounts for around 80% of Angola's government revenue. To address the crisis, the government implemented austerity measures and sought to diversify the economy away from its reliance on oil. The government passed new laws to attract private investment, increased taxes on some goods, and negotiated financing from international sources. However, low currency reserves, high inflation, and reduced imports continue to negatively impact Angola's economy. The government is working to boost electricity generation and promote other industries to further economic diversification.

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Angola: Present
and Future
PAULO VARELA
The sharp drop in the price of oil on the international markets
since 2014 has greatly impacted the economies of countries
traditionally producing and exporting this commodity. The
severity of the impact is directly proportional to the degree
in which individual countries’ public finances depend on oil.
According to the International Monetary Fund (IMF), the
sub-Saharan African countries most penalised by the adverse
international climate in 2015 were Angola and Nigeria. In
this piece, Paulo Varela, President of the Board of Directors of
CCIPA (Portugal-Angola Chamber of Commerce and Industry),
outlines the issues facing Angola.

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Current context
Thedropinrevenuesfromexportsandtaxintheoilsector,which
previously accounted for around 80% of total revenue, forced the
Angolan Government to review its 2015 State Budget. A fall in the
estimatedpriceperbarrelfromUs$80.00toUs$45.00prompted
the immediate adoption of austerity measures to contain public
spending (by suspending, postponing or cancelling works and
projects considered as non-priority under the 2013-2017 National
Development Plan). Alternative sources of revenue also had to be
identifiedandstepstakentomakethecountrylessdependenton
foreign trade.
Indeed, in an oil-dependent country, where revenue from other
exportsiscomparativelylow(whilediamondsarethesecond-largest
sourceofincome,theyaccountedfora‘mere’€990millionin2015,in
comparedto€8.2billioninoilrevenue),itwasessentialtheAngolan
authorities took swift action, implementing measures recognised
by the international community as both timely and adequate.
Themostimpactfulmeasureproposedwasthedecisiontodiversify
the economy; this encouraged investment in industry-based,
non-oil-related areas (there are prolific natural resources in
many different economic sectors) and developed primary sector
production,especiallyinagriculture,thuscuttingimports.These
actions contained the flow of currency out of the country and
reduced its dependence (particularly in foodstuffs) on foreign
trading partners.
Earlier diversification of the Angolan economy took place during
the2008-2009financialcrisiswhenmeasureswereimposedbythe
IMFaspartofastructuraladjustmentagreement.Theagreement
remained in force until May 2013. However, those in charge of
economic development failed to adopt a concerted strategy for
the process and consequently, although several large, viable and
sustainableprojectswereimplemented,theywerelowinnumber
and involved few business areas.
Inlightoftheworseninginternalcrisis,inmid2015theGovernment
passed its first laws which it hoped would attract private
investment. These included: the abolition of a minimum value
for eligible projects, the introduction of benefits and incentives
payable to applicants meeting certain objectives and predefined
criteria, the repatriation of capital from the outset of the project
andthesafeguardingof35%oftheinvestmentinareasconsidered
a priority (including media, hospitality and tourism) for Angolan

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M D S m a g a z i n e
investors.Inaddition,agenciessuchastheAngolanAgencyforthe
PromotionofInvestmentandExportsandTechnicalSupportUnits
forInvestmentweretaskedwithpromotingandprovidingsupport
forprivateinvestmentandfosteringAngolanexports.Theyoperate
alongsidevariousministriesresponsibleforinvestment,including
thePresidencyoftheRepublic,whichevaluatesanddecidesupon
projectswithamountsexceedingUs$10million.Angolaconcedes
however,thatevenwiththeseinitiatives,itwillstruggletosource
funds to meet the population’s basic needs and support essential
projects. Alternative funding, from the public and private sector,
in Angolan and foreign currencies, is therefore vital.
Insupport,theNationalBankofAngola(NBA)implementedaseries
of remedial measures; it issued debt in the form of securities and
treasurybondsinAngolancurrency(index-linkedtotheUs$)and
securedfundingfromtheinternationalbankingsector(Goldman
Sachs, Bilbao Vizcaya Argentaria, Santander, Deutsche Bank),
global development institutions (World Bank, mainly through
the International Bank for Reconstruction & Development, the
African Development Bank and the European Union), multina-
tionalcompanies(GemCorpCapital)andfromothercountriesvia
bilateral agreements. In June 2015, a credit line of Us $6 billion
was negotiated with China and Us $ 1.5 billion was also listed
in sovereign debt (Eurobonds) on the London Stock Exchange.
This was the country’s first experience of international money
markets and a good opportunity to assess how receptive others
were to its requests.
InabidtokeepAngola’snetinternationalreservesfairlystable(it
currently covers five to six months of imports), the Government
extended the time limit for overseas payments and created a
payment schedule following guidelines set by the NBA. This it
hoped, would contain the outflow of foreign currency. These
measures however, led to suppliers suspending exports and as
theflowofimportstothecountrydropped,itseverelyimpactedon
sectorswhoseproductionwasreliantonimportedrawmaterials.
Worst hit was the automotive sector and businesses involved
in brewing, milling, dairy and glass production. Suspended
production inevitably led to an increase in unemployment.
An updated regulatory framework to address the crisis and
minimiseitsharmfuleffectsonthepopulationwasneeded,andso
theCustomsTariffandExciseDutyRegulationswereintroduced.
Theyincreasedtaxesonluxuryproducts,relievedthetaxburden
onessentialproducts(especiallythoseconsideredtobehousehold
staples)andintroducedtaxesonpetrolanddieselfuelsproduced
inthecountry.Inaddition,newSecuritiesandUrbanRentalCodes
were approved and a new General Employment Law was passed.
The shortage of currency and a reduction in imports led to a
continued devaluation of the Kwanza against the Us $ (24% in
2015) and the Euro which were compounded by rising prices and
increasedinflation.Thelattershotuptoover17%inthefirstmonths
of 2016 (previously the highest rates had been 15.31% in 2010 and
14% in 2009).
PAULO VARELA
→ Paulo Varela has a Bachelor’s Degree in Law
from the Faculty of Law at the University of
Coimbra and completed post-graduate courses in
Business Management and Administration.
→ He is the Administrator of Galp Marketing
Internacional S.A, is a representative for Galp
Energia S.A and President of the Board of
Directors of the CCIPA – the Portugal-Angola
Chamber of Commerce and Industry.
→ From 2002 to 2014, he was Vice-President of
the Board of Directors of the Visabeira Group
and has been President of the Board of Directors
of Visabeira Global SGPS S.A. since 2006. From
November 2009 to May 2014, he held the position
of President of the Board of Directors of Vista
Alegre Atlantis, S.A.
→ Paulo Varela was President of the Board of
Directors of Visabeira Moçambique S.A. from
1999 to 2014 and President of the Board of
Directors of Visabeira Angola S.A. from 2002 to
2014. He was also non-executive Administrator at
the Banco Único (Mozambique), PCI – Parque de
Ciência e Inovação Aveiro S.A.

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In light of this and with the aim to contain price escalation on
essential products, the Government adopted new measures in
February 2016. They comprised:
• The creation of a National Price Council – chaired by the
Minister for Finance, members include Ministers for the
Economy, Territorial Planning and Development, Trade,
Agriculture and Fisheries and Transport, plus the Governor
of the NBA. The Council’s powers allow it to formulate a
Government-approved national pricing policy, develop, manage
and implement ‘market regulation policies’ and monitor and
take action against activity that could impact prices.
• The publishing of a ‘watched prices’ list – this ensures the
prices of 32 essential products and services, such as rice, milk
and bread, are controlled.
• Agreements that the Government is to be responsible for
setting the prices of gas, paraffin for lighting, plumbed water,
electricity and urban public transport.
Where minerals are concerned,
Angola’s resources include diamonds
(production in 2016 is expected to
reach some nine million carats);
ornamental stones – granite, marble
and limestone; construction materials
– sand, clay and gravel; and ores –
gold, silica and mercury.

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M D S m a g a z i n e
Whenitcomestoelectricityand,morespecifically,itsgeneration,
Angolahasthesecond-highesthydroelectricpotentialinsouthern
Africa. It has taken steps to maximise this, building essential
hydroelectricplantsandconnectingthemtothegrid.Newplants
including the Capanda and Cambambe dams in Kwanza Norte
province will provide an additional 960 megawatts of electricity
fromJune2016whenthefirstoffourinstalledturbinescomesinto
operation. In Laúca - 65% of construction work is complete and
the first two turbines will be operational in June 2017, generating
267megawattsofelectricity.Productionwillincreasebyafurther
77 megawatts when the third turbine comes into operation in
December, the same year. Soyo – a combined cycle dam - will
generate 750 megawatts of electricity in 2017 from natural gas.
Angola’selectricityprojectislong-termandonethatrequiresheavy
investmentinbothgenerationanddistributionbytheGovernment
and its partners. It is a project that must be concluded urgently;
the viability of the country’s industry depends upon it.
Afurtherareaoffocusistheenvironment.Environmentalimpact
studiesarecompulsoryforcertainprojects,consultingfirmshave
toberegistered,supportprogrammestoprotectthelocalfaunaand
flora and combat the poaching and killing of endangered species
areunderwayandthecreationofnaturereservesisencouraged.In
the latter, the Kaza Transfrontier Conservation Area is especially
important as it has a huge impact upon tourism. Following on
fromAngola’sparticipationinthe21stUnitedNationsConference
on Climate Change (COP21), the country will be hosting official
celebrationsforWorldEnvironmentDayon5June2016.Thetheme
for the event is ‘The Fight against the Illegal Trade in Wild Fauna
and Flora’ – a subject particularly important and topical for the
African continent.
Logisticsareequallyapriorityasitisessentialproductsreachend
consumers.Themainrailwaylineshavebeenrehabilitated,roads
andbridgesarebeingrepairedandrestoredandworktobuildthe
deep-waterportatCaioinCabindahasbeenscheduledforQ12016.
Variousprojectsarealsobeingimplementedtoimproveconditions
for road traffic in the capital and surrounding areas, including
resurfacingthemainroadsandprovidingpassengerferriesacross
the river to connect Luanda with the neighbouring areas.
Areas of focus
TheGovernment’skeyfocuswasintheprimarysector(asEuronews
says:“Angolaisexchangingblackgoldforgreengold”).Thissector
is fundamentally important; it ensures the population’s basic
needs are met and can replace significant volumes of imports,
stemming the currency outflow. In recognition of this, rural and
livestockdevelopmentprogrammeshavebeenimplementedand
water supplies to rural areas improved and extended under the
‘WaterforAll’programme.Farmersarebeingprovidedwithseeds
andtools,aruraltradeprogrammehasbeenadoptedwiththeaim
of stimulating agro-industry and livestock, and the large coffee
plantations are once again investing in producing and exporting
coffee. Fisheries have also received special attention; incentives
via the provision of licences, vessels and nets, foster eco-friendly
local fishing, supporting around 500,000 families.
Where minerals are concerned, Angola’s resources include:
diamonds(2016productionisexpectedtoreachsomeninemillion
carats), ornamental stones (granite, marble and limestone),
constructionmaterials(sand,clayandgravel)andores(gold,silica
andmercury).Yettobefully-exploited,thissectorhasconsiderable
growth potential. Particularly when you consider companies still
importfinishedconstructionmaterialsandexportrawunprocessed
stone which is subsequently re-imported in differing formats,
but typically finished-off, polished and ready-to-buy. A parallel
can be drawn with the timber sector where resources cannot be
fully exploited due to difficulties in accessing logging sites and
transporting the cut logs. Also a lack of electricity for processing
means generators have to be used, making the costs prohibitive.
The most impactful measure
proposed was the decision to
diversify the economy; this
encouraged investment in
industry-based, non-oil-related
areas (there are prolific natural
resources in many different
economic sectors) and developed
primary sector production,
especially in agriculture.

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f u l l c o v e r
2016: preparing for the future
DespitetheeffortsandmeasuresadoptedbytheGovernment,and
the positive results achieved from them, 2016 did not start well for
Angola.Thepriceofoilcontinuestofallintheinternationalmarkets
(with the occasional small rise followed immediately by further
drops)andthegeopoliticalclimateintheMiddleEast(theconflict
between Iran and Saudi Arabia and Iran’s return to the oil market)
have not facilitated an increase or international stability in prices.
However, some of Angola’s problems earlier this year originated
fromfactorsarisinglatein2015andalthoughunconnectedtothe
price of oil, have negatively impacted its external economic and
businessrelations.InNovembertheUSFederalReservesuspended,
via North-American banks, the sale of dollars to the Angolan
banking system. It alleged the country’s financial system failed
to comply with internationally-approved rules regarding money
laundering and the financing of terrorism. This, combined with
theoilpricecrisis,contributedtoalackofcurrencyinthecountry,
which in turn has led to a steep rise in prices.
Inresponse,theNBAadoptedaseriesofinitiativesrecommended
by the inter-governmental body, the Financial Action Task
Force (FATF). Top priority was given to regulatory reform and
the enforcement of 23 out of 41 new regulations. These included;
the licensing of banks, risk governance and credit management,
the establishment of an ‘appropriate legal framework’, the
development of faster and more precise ‘automated customer
monitoringprocedures’,leadingtobettercontrolovertransactions
inprogress,theautonomyoftheFinancialInformationUnit(FIU)
andarecommendationtotheprivatesectorfor‘morecohesiveand
better quality reporting’.
As a consequence of the changes introduced, and following
feedbackfromFATFspecialistswhoaftervisitingAngolainJanuary
thisyearreported:“Noassetsrelatingtothefinancingofterrorism
were identified,” the NBA announced, in late February, that as
Angola and its national banking institutions had been found to
be“strictlyabidingbytherulesofcompliance,”thecountry“was
no longer under international surveillance in respect of money
laundering and the financing of terrorism.”
Thisacknowledgementandtherecentregulatoryreformsshould
soon alleviate the severe difficulties faced by the Angolan banks
in accessing dollars on the international markets. This will give
amuch-neededboosttoawell-developedfinancialsystemwhich
is on a par with the best in Europe and Africa.
Regardingfinancialservices,Angola’sinsurancesectorwitnessed
a year of consolidation and growth in 2015. New products were
developedtomeetthecountry’sneeds,andanincreasingnumber
ofcompanies,offeringmorecomprehensivecover,ledtoasurgeof
interestfromPortugueseandSouthAfricancompaniesoperating
in the sector.
In addition to ratifying its 2016 State Budget, the Angolan
Governmentapprovedastrategyforeconomicrecovery,signalling
the start of a new and more stable era where tax revenue is
non-dependentonoil.Itinvolvedtheissuingofguidelinesaround;
taxation, monetary policy, foreign trade and the real economy.
The Government pledged to take greater control of the country’s
deficit, seek increased financing and improve the efficiency and
effectiveness of foreign investment. Greater priority is being
given to promote exports and there are plans to adjust the public
debt repayment schedule, increase non-oil-related tax revenue,
optimise public expenditure on staff, pensions, operations and
theacquisitionoffinancialassets,rationalisetheimportofgoods
andservicesandgenerallyincreasedomesticproductionofbasic
exportgoods.Taxreformsarealsobeingintroduced;theCouncil
of Ministers approved a draft law governing banking operations
andtransactions,whichinturnwillincreaserevenueandenable
taxpayers to cross-reference banking transactions.
Although the Angolan Government took action at the first
signs of the crisis, the measures adopted were ineffective and
inadvertently contributed to the worsening economy in 2015.
As mentioned earlier, a key trigger was an increase in the global
supplyofoilandsubsequentfallindemand.Contributoryfactors
included; the return of Iran and other oil-producing countries to
theinternationalmarket,thefailurebyOPECtoapplyproduction
restrictions,theexportingofshaleoilbytheUS,afallinEuropean
consumptionduetoitseconomiccrisesandclimatechangeanda
slowing of China’s economy to 7% in 2015 (the lowest in 25 years)
which prompted a drop in imports from Angola, China’s biggest
supplier of crude.
Angola’sdifficultieshaveseverelyaffectedrelationswithitsforeign
partners and there’s still some way to go before confidence in its
economy returns.
2016 will be a year of constraint and austerity, reflected in the
GDPdeficitforecastof5.5%intheStateBudget.Economicgrowth
however,ispredictedtoreach3.3%,supportedbyanestimated48%
increase in revenue from the oil sector and 12% from non-related
industries. Equally positive is feedback from the World Bank; in
its2016DoingBusinessReport,itranksAngolatwoplaceshigher
than in 2015 (181, up from 183). Perhaps measures to improve its
businessenvironmentwitheasiercompanyregistrationandlower
costs for new business set-ups are working.
Whilethe(slow)processofdiversifyingtheeconomyisunderway,
Angola’s economic and financial recovery currently depends on
the increase in the international price of oil, which the IMF says
could start happening towards the end of 2016.

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M D S m a g a z i n e
A country cannot go however, from being a mono-producer
and mono-exporter to having an industrialised and diversified
economy easily or quickly. It is a lengthy process that requires
a great deal of work, mental stamina, financial capacity and
heavy investment in the training of local manpower. If, however,
an internal project is approached from a medium or long-term
perspective (with a view to securing the presence of enterprises
andentrepreneursinthemarket),structuralcostsarelikelytofall,
expatriateworkerscanbereplacedbyqualifiedlocalworkersandif
theprojecthasAngolanroots–ieissetuplocallyandparticularly
if it involves Angolan partners - local consumers will look upon
it more favourably. Angola firms are equally favoured when it
comestoapplyingforfunding,programmesandsupportthrough
official bodies (eg the Ministry for the Economy’s Angola Invest
programme,theAngolanDevelopmentBankorAngolanbanking
system), since there is no shortage of local currency and credit
rates are low. Angola also has an abundance of natural resources
that can be used as raw materials for various industries, making
entrepreneurs less reliant on currency from commercial banks.
The Government is confident its economic and financial crisis is
temporary; the country is known for its resilience in overcoming
difficulties. Angola’s history marks periods of adversity but also,
ones of achievement and progress.
Portugal has equal confidence in Angola succeeding in the face
of adversity. At the opening session of the conference ‘40 Years
of Angolan Independence – Building a Sustainable Future’, held
in Lisbon on 29 February this year, the Angolan Ambassador to
Portugal, Professor Dr José Marcos Barrica, affirmed: “No crisis
can hold out in Angola, it’s all a matter of time!”
The Portugal-Angola Chamber of Commerce and Industry also
believes the Angolan Government is doing everything in its
power to put this complicated episode in the country’s economic
history behind it and that, once the crisis is past, nothing will be
the same as before. The characteristics of the Angolan economy
will change, requiring a different approach to bilateral relations.
More than ever, it will be necessary to take advantage of existing
synergies, the shared cultural identity and common language. It
is in everyone’s best interests – Portuguese and Angolans alike
– to gradually increase local production and build sustainable
partnerships, supported by the authorities of both countries.
Portuguese companies and entrepreneurs have already shown
they are more than capable of rising to Angola’s socio-economic
challenges; they are present in every province, operate in every
sector and so will continue to be long-term partners for Angola. •
The Government is confident its
economic and financial crisis is
temporary; the country is known
for its resilience in overcoming
difficulties. Angola’s history marks
periods of adversity but also, ones
of achievement and progress.

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M D S m a g a z i n e
PRAKASH RATILAL
→ Prakash Ratilal has an extensive track
record at the Banco do Fomento Nacional
bank in Lisbon, which he joined while still a
student. At 24, he was awarded a degree in
Economics from the Faculty of Economics at
the Technical University of Lisbon’s Institute
of Economic and Financial Sciences.1
In that same year (1975), the year in
which his homeland, Mozambique,
gained independence he returned
home and was appointed Chairman of
the Board of Directors of the Montepio
Bank of Mozambique. At 27, he became
Vice-Governor of the Bank of Mozambique
and at 31, was appointed Governor.
→ After a period of collaboration with
the United Nations, where he took on a
variety of tasks, from Consultant to the
A vision of (and for)
Mozambique
Excerpts from the speech – ‘Reflections on Mozambique’s Economy
over the Last 40 Years’ – given by Prakash Ratilal on 29 June 2015
Governments of Angola and East Timor and
Member of the Panel of Eminent Persons
on United Nations Relations with Civil
Society to Special Adviser to East Timor’s
President, Xanana Gusmão, in 2001, he took
on the Presidency of the Moza Banco bank,
alongside his Chairmanship of the Board of
Directors at Moçambique Capitais, S.A.
→ Prakash Ratilal says the most important
lessons he learned during his career are‘the
need to be bold without fearing failure, never
giving up, investing in people who can turn
ideas into realities, understanding success
comes from involving the greatest number of
stakeholders, having a vision and strategy that
everyone agrees with and sharing its results’.

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f u l l c o v e r
Prakash Ratilal was born in
Mozambique in March 1950 and
instrumental in the process that led
to the country’s independence and
building of the Mozambican state.
In his speech at the Polana Hotel in Maputo, Prakash
RatilallookedbackatMozambique’sprogressaftergaining
independence on 25 June 1975, considering it from an
economic,politicalandsocialperspective.Economically
he undertook ‘a cold analysis of the incidents that took
place in the immediate run-up and which impacted and
mouldedthefutureofMozambique’,andgavethefollowing
examples ‘demonetarisation of the official price of gold,
which changed relative worldwide prices forever, the
change from a fixed exchange-rate system to a flexible
exchange-rate system, and the first oil-related shock; the
drasticriseinthepriceofoilfromUs$2.90toUs$11.65per
barrel in just three months!’.
“These factors,” he explains, “were devastating in their
effect on a poor country like Mozambique, with its fragile
institutions and severe lack of qualified personnel, on the
vergeofindependenceandrelyingonlyonitsexportsand
farmproduce.Inthefinalyearspriortoindependence,the
colonial economy was showing considerable structural
imbalancesinitsbalanceofpaymentsandbalanceoftrade.”
Mr Ratilal remembers: “Mozambique’s independence
came in the context of considerable East-West confron-
tation, since no Western support for the independence
movements had been forthcoming, with the exception of
the Nordic countries.” He adds: “Members of Parliament
in Mozambique’s first Government as an independent
countrywerechargedwiththemissionofensuringnational
unity, building the State and profoundly transforming
the economy and society; yet they were mostly young
– under the age of 35 – with little experience of social,
economic and financial management. A gargantuan task
indeed, particularly when responsible for; the smooth-
running of the economy (in a country where the majority
of leadership positions in trade, industry and services
wereoccupiedbycolonistswhohadsinceleftthecountry),
investment in education (only 7% of the population over
the age of seven could read and write and there was only
one university in the whole country), the creation of a
healthcare system (almost non-existent for the majority
of the population whose average life-expectancy was 44
years),andthebuildingoftheState’sinstitutions(almost
always from scratch!).”
The situation following independence was difficult. He
continues:“Asevereshortageofqualifiedprofessionalswith
littleeconomicmanagementexperience.Politicalinstability,
intheaftermathoftheattackscarriedoutbythethenregime
in Southern Rhodesia, condemned by the United Nations
foritsunilateralracistdeclarationofindependence,which
destroyedimportantinfrastructuresinawarthatledto(…)
and damage to the tune of several hundred million dollars
(…) according to various UN agencies.”
But the Government was determined not to given in.
Mr Ratilal recalls the decisive moments for the country:
“The Government launched an organisational offensive
to reorganise the production and circulation of goods,
encouragefamilyproductionandgreenspacesandprivatise
certain sectors it felt it should not be responsible for.”
Prakash Ratilal.

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M D S m a g a z i n e
Prakash Ratilal’s vision for the risk and
insurance market in Mozambique is closely
connected to the country’s economic
development. He believes the current outlook
is extremely hopeful and suggests if a
number of positive factors come together,
Mozambique could be one of a few countries
to deliver great economic growth from 2020
onwards. He foresees this growth will require
an expansion in financial services, particularly
insurance, reinsurance and broking (expected
to grow exponentially). Cover will be needed
for the various risks associated with the
development of the hydrocarbon industry and
its infrastructure, the development of ports,
railways, the forestry industry, tourism and
agribusiness etc. In light of this, he considers
the management of these risks and their
transfer to the insurance sector will require
specialists of international quality, something
currently unavailable in Mozambique.
After 1980, Mozambique forged closer ties with the West,
especially the United Kingdom. He reminds: “A period
of relative peace and quiet followed, during which there
wasanaccelerationintheintensivetrainingofpersonnel,
theMeticalwasintroducedasthecountry’snewnational
currency, in 1982 there was a renewed focus to encourage
thecountry’sprivatesectorandopenituptoforeigncapital
and in 1984 work began on preparations for the country
to join the International Monetary Fund and the World
Bank Group. A Draft Indicative Plan was also drawn up
to promote and develop the country’s natural resources.”
“From the late 1980s,” he reports “there was a period
of terrible destabilisation with a general decline in
production, rapid devaluation of the currency on the
parallel market, the need to introduce rationing cards
in cities to ensure people had access to staple foods and
therationingoffuel,whichwasgenerouslysuppliedwith
concessionary credits by Algeria, Libya, Iraq and Angola.
“This ‘destabilisation war’ required tough political,
economicanddiplomaticaction,withvariousmissionsto
foreigncountriessuchasPortugal,FranceandtheUnited
Kingdom,thesigningofagoodneighbourhoodagreement
withSouthAfrica,theconclusionofthefirstrestructuring
of Mozambique’s external debt and the drawing up of an
Economic Action Programme allowing greater growth in
Mozambique’s private sector which mobilised new funds
into the national economy.”
OncethecountryformallyjoinedtheIMF,Mozambique’s
President,SamoraMachel,wasreceivedinWashingtonby
US President Ronald Reagan.
Thecountry’seconomicsituationwasimprovingandso
too was other countries’ views of Mozambique. However,
tryingyearslayaheadforMozambique,duetoitsdestabi-
lisation, aggravated by the apartheid regime. This was
known as the 16-Year War, as Mr Ratilal explains: “In
the late 1980s, the destruction and successive droughts
and flooding meant the people of Mozambique found
themselves in the midst of a human tragedy on a massive
scale, but the rest of the world was scarcely even aware
of it. In 1989, I wrote a book, Enfrentar o Desafio (Facing
the challenge) where, based upon United Nations data,
Iwrotethat200,000childrendidnotknowthewhereabouts
of their parents and over 5.6 million were displaced and
affected. Of these, around one million had taken refuge
in neighbouring countries.”
He underlines the importance of the collaboration
between various Non-Government Orngaisations, the
United Nations and Ministries, who made a decisive
contribution to save lives and rehabilitate the country
economically and socially.
“A vision in itself is not enough –
it has to be credible and based on
reality. Everyone must roll their
sleeves up and get on with the job.”
Despitethetragiccircumstancesofthelate1980sandearly
1990sprofoundlymarkingthepeopleofMozambiqueand
significantlyimpactingthecountry’seconomy,heopines:
“Itwastheyoungpeopleofthegenerationofindependence,
alongside Mozambique’s liberators, whom I am proud to
be a part of - they held the country together in those early
years.Thisgenerationbecameknownasthe‘Generationof
8March’.Manyagreedtointerrupttheirstudiesandanswer
thecalltogotothedistrictsandproductionunits,various
8and9gradestudentstaughtclassestotheiryoungerpeers
and others agreed to study abroad. Today, these are the
people who occupy the top positions in the economic and
social life of Mozambique.”
For education, the future looks promising. Prakash
Ratilal concedes, however, there is still a long way to go:
“In 2012, some 5.3 million pupils were attending primary
school, while there were 760,000 and 197,000 attending
the first and second years of general secondary school.
“And did we make mistakes? Of course we did. Was it
worththesacrifice?Itwashard,butofcourseitwas.Forty
yearson,thecountrybenefitsfromhighsustainablegrowth
ratesandhasapromisingfuturebasedontheexploitation
ofnaturalgas(ithasthethird-largestreservesintheworld),
hydroelectricity,mineralresources,agribusiness,tourism
and nature conservation.”

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He continues: “Mozambique to some extent remains
indivisible, Mozambican society prefers to be
non-confrontational and resolve disagreements by
themselves. Regular elections have made democratic
changes to Government and the country is making good
progress.Therearestillchallengestobefaced,including;
peace and stability, job creation, the promotion of good
business practices and entrepreneurism, a reduction in
imbalancesandasymmetries,afairerdistributionsystem
and a more inclusive society.”
Mr Ratilal concludes by sharing his vision for
Mozambique:“Thecurrentsituation,thenaturalresources
Mozambicans depend upon and of course, the worldwide
market, can change the fortunes of this country, to the
benefit of all citizens. This requires however, agreement
and understanding between the various political and
social players, a desire for the definitive restoration of
peace, a priority focus on agricultural development and
the promotion of skills and schooling, public policies
aimed at the development of a competitive economy,
greatermanagementcapacityforpubliccompanies,better
quality management for micro, small and medium-sized
companies, the promotion of a business climate capable
of attracting major investment in a credible atmosphere
where business-related conflicts can be expected to be
resolved and legislation/contracts complied with, severe
penalties for acts of corruption and finally, greater
transparency and the introduction of a framework that
enables us to become a more competent state.
“To achieve this, it requires close collaboration and
commitment by all Mozambicans, greater national
cohesion and tolerance of everyone’s differences and
beliefs, more inclusive policies and better distribution
networks. We have a window of opportunity to build a
moreprosperousandpeacefulfuture–ahistoricmoment
that Mozambicans cannot afford to miss.”
Prakash Ratilal's final message is clear: “These are
tasksinvolvingeverygeneration.Everyonemustconquer
their own space and do specific things. A vision in itself
is not enough – it has to be credible and based on reality.
Everyonemustrolltheirsleevesupandgetonwiththejob.”
AnundeniablyinspiringtestimonialfromaMozambican
who knows the past, helped build the present and is now
treading the path that will build his country’s future. •