UNCLAS MAPUTO 001138

SIPDIS
SENSITIVE
STATE FOR AF/S-HTREGER
NSC FOR CCOURVILLE
MCC FOR SGAULL
E.O. 12958: N/A
TAGS: KCOR PGOV PREL MZ
SUBJECT: MOZAMBIQUE: MINISTER SACKS HEAD OF NATIONAL
INSTITUTE OF SOCIAL SECURITY


1. (U) On August 3, Mozambican Labor Minister Helena Taipo
dismissed Elina Mafuiane Gomes as Director General of the
Social Security National Institute (INSS -- Mozambique's
social security agency). Gomes had headed INSS since 2001.
More than a dozen other senior INSS officials have either
been dismissed or re-assigned within INSS in the past several
weeks. According to the press, the move was prompted by poor
performance and reports of corrupt practices filed by
beneficiaries and companies. Inspectors uncovered evidence
that some INSS officials had funneled employee contributions
into their own personal accounts.


2. (U) Immediately after firing Gomes, Minister Taipo froze
all INSS bank accounts. According to a statement by Vice
Minister of Labor Soares Nhaca, this was done to avoid the
"arbitrary use of funds" until the new management could
regain effective control of the institution. (Note: Press
reports indicate that soon after Gomes was dismissed and the
accounts frozen, some individuals attempted to withdraw large
sums of money from INSS accounts in Manica and Maputo
provinces. End note).


3. (U) On August 15, Senior Ministry of Labor official Abilio
Mussane was sworn in as the INSS' new director general. He
has promised to increase transparency, stating that he will
keep the public informed on all INSS activities in an attempt
to rebuild Mozambican's trust in the institution. The freeze
order on INSS accounts was lifted shortly afterwards.


4. (SBU) Comment: INSS is popularly viewed as one of the
country's most corrupt public institutions. Retirees from
the small formal sector (which covers roughly ten percent of
the working population; the others work in the informal
sector and/or agriculture and receive no pensions) commonly
receive comparatively little, with payments often delayed or
lapsing altogether. It is widely believed that many private
employers keep contributions they have withheld, believing
that their employees don't really expect anything later on.
Some years ago one of the more independent newspapers,
Savana, ran a story alleging that senior government officials
had "borrowed" millions of dollars from INSS to fund private
schemes and had not returned the money. Two RENAMO deputies
repeated these accusations in the National Assembly this past
March, while debating the Attorney General's annual report.
Prime Minister Diogo's husband was named as one of those who
had taken an INSS "loan."


5. (SBU) Comment continued: It is not clear whether this
shakeup will lead to any prosecutions. Contacts in business
circles roll their eyes when asked whether Ms. Gomes will be
punished. They point out that she remains head of the Maputo
city council and, even after being sacked, criticized the
Labor Minister to the press.
La Lime