US embassy cable - 05MAPUTO1138

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