Maputo - Businessman Armando Guebuza has pledged an "unrelenting fight against poverty" after being sworn in as Mozambique's president.

He replaces Joaquim Chissano who retired after 18 years in power.

Guebuza, from the ruling Frelimo party, took the oath of office in Maputo's Independence Square on Wednesday to loud cheers from about 50 000 supporters and applause from neighbouring African leaders.

Chissano's presidency saw the country transformed from one ravaged by civil war to an African success story.

But despite its vastly improved economic performance, about half of Mozambique's 18-million people still live in desperate conditions.

"It is a dream that there should not be any Mozambican who is unable to provide for himself or herself. We know what we want and we know how to materialise such a dream," Guebuza said.

"What we are going to demand of ourselves is not just to walk, but to move faster. We should wage an unrelenting fight against poverty," he said.

Regional leaders, including President Thabo Mbeki and Zimbabwe's Robert Mugabe, attended the ceremony.

"It is truly a jubilant moment seeing a smooth transition in Africa," Lesotho Prime Minister Pakalitha Mosisili said, noting that Mozambique had joined a growing number of Southern African countries to have held smooth democratic elections.

Guebuza, 61, was handed the national flag, a copy of the constitution and the national emblem before swopping seats with Chissano to symbolise the change of guard.

Guebuza won the December 1-2 poll with about 64 percent of the vote against 32 percent for the candidate of Renamo, which laid down its guns in 1992 after a long and brutal civil war.

Renamo leader Afonso Dhlakama boycotted the inauguration ceremony, saying electoral fraud and ballot-stuffing had denied him victory in the elections. - Reuters.