Oct. 27 (Bloomberg) -- Mozambique’s ruling party appears set tomorrow to win its fourth consecutive election since the end of a civil war 17 years ago, buoyed by more than a decade of strong economic growth and splits in the opposition.

President Armando Guebuza and his Front for the Liberation of Mozambique aim to top the 64 percent majority won in 2004. Afonso Dhlakama, candidate of the main opposition Mozambique National Resistance party has lost the last three elections. Daviz Simango, mayor of the second-biggest city, Beira, is also running for president after defecting from Renamo.

Guebuza’s party, Frelimo, has ruled Mozambique since leading the southern African nation to independence from Portugal in 1975. Under it, the economy grew at 8 percent a year in the decade through 2006 and 6.8 percent last year, helped by investments by companies such as BHP Billiton Ltd., Vale SA and Sasol Ltd.

“Frelimo should win for a combination of reasons: historical support for the party as the liberation movement, the opposition’s lack of an alternative program, and in some areas patronage,” said Mike Davies, a London-based analyst with Eurasia Group.

There have been no opinion polls carried out during the campaign, which ended on Oct. 26.

Mozambique’s economic growth is likely to slow to 4.5 percent this year, according to the International Monetary Fund, compared with 1.3 percent for sub-Saharan Africa as a whole.

‘Investment Outlook Positive’

“Mozambique’s investment outlook is positive despite the global recession,” according to Yvonne Mhango, an economist at Standard Bank Group Ltd. in Johannesburg. “Investors are taking a long-term view, and growth hasn’t fallen as much as elsewhere in the region.”

Guebuza, 66, and Frelimo, formerly a Marxist-Leninist party, are promising voters to cut poverty and fight corruption while carrying through on its policies to promote growth.

The campaign by Dhlakama, 56, and his party, known as Renamo, appears to have found little traction, Mhango said in a telephone interview. Dhlakama has accused Frelimo of remaining a communist party, responsible for carrying out illegal detentions and failing to cut poverty.

“Renamo’s significance has declined and the opposition has weakened” since the first postwar elections in 1994, she said.

Renamo will probably lose votes to the Mozambican Democratic Movement of Simango, 45, Mhango said. Renamo lost 27 parliamentary seats in the 2004 elections, with Frelimo winning 160 of the 250 seats available.

Polling Stations

Polling stations open at 6 a.m. and close at 8 p.m., and results should be known by Nov. 1. The National Elections Commission must announce an official result by Nov. 14, according to the Maputo-based Center for Public Integrity, which campaigns for good governance.

The civil war between Frelimo and Renamo, which was backed by the then white-minority government in neighboring South Africa, cost more than a million lives.

Once it ended, Frelimo adopted free-market policies, won debt relief and wooed investors such as Melbourne-based BHP Billiton, which spent $2.2 billion building Mozal, Africa’s second-biggest aluminum smelter, outside of the capital, Maputo.

Other big projects include a $1.3 billion investment by Rio de Janeiro-based Vale, the world’s biggest iron-ore producer, in a coal mine in the northwestern province of Tete. When the mine starts producing its estimated 11 million metric tons of coal a year, it will be the biggest in the southern hemisphere.

Foreign Investment

Johannesburg-based Sasol, the world’s largest producer of motor fuels made from coal, invested $1.2 billion developing two gas fields and a processing facility in Mozambique.

Mozambique’s 22 million people remain among the poorest on earth, with the country ranking 172 out of 182 in the United Nations Human Development Index this year.

“There’s concern about an imbalance between megaprojects, which contribute to growth, and the gap between them and the small formal economy,” said Davies of Eurasia Group.

Agriculture remains the biggest contributor to growth, comprising 26 percent of the economy last year, according to Mozambique’s National Statistics Institute. Cereal production rose 14.1 percent in the 2008/2009 agricultural season, Cabinet spokesman Luis Covane said on Aug. 25. The industry employs 81 percent of those with jobs, according to the U.S. Central Intelligence Agency’s World Fact Book.

The government’s efforts to attract foreign investors and cut red tape have resulted in per capita income rising to $956 in 2008 from about $120 in the mid-1980s, according to the U.S. Department of State. Still, as much as 40 percent of the country’s budget is funded by Western donors and financial institutions, according to Standard Bank’s Mhango.

Voter apathy may tarnish the election and Mozambique’s reputation for stability, according to Davies of Eurasia Group. Turnout declined to 36 percent in 2004 from 68 percent in 1999.

“Growing apathy could suggest disenchantment not only with the government, but also with the political process more generally,” Davies said. “Democratic consolidation is important to establish institutions that many investors look for to provide stability.”

To contact the reporter on this story: Ana Monteiro in Johannesburg on amonteiro4@bloomberg.net;

Last Updated: October 26, 2009 18:01 EDT