Maputo - Mozambique celebrates 20 years of peace after a devastating civil war on Thursday, with the country poised for a coal- and gas-fuelled economic boom.

The country's president, Armando Guebuza will hold an inter-denominational service and lay wreathes to fallen soldiers during commemorations of the signing of the 1992 Rome peace accord that ended one of Africa's most brutal civil wars.

The Cold War-fuelled conflict killed a million people and pitted Guebuza's Frelimo party against Renamo rebels, who were backed by white minority governments in neighbouring South Africa and what was then Rhodesia.

In the intervening decades the country has enjoyed relative stability, and has even become a darling of international donors who contribute over 30 per cent of state budget.

It is now class tensions that are the main threat to peace.

“We have the capacity to redistribute our riches in a fair way but we also notice that there is a gap between the rich who keep getting richer, and the poor who keep getting poorer,” Hortencio Lopes, the Chairperson of the Centre for Mozambican and International Studies, told AFP.

Just a few hundred metres away from “Peace Square” where Thursday's peace celebrations will be held, tens of thousands of people, displaced by the 16 year conflict, still live in tin shacks amid the sprawling shanty towns that ring the city. Many of them live on as little as US$1 a day.

When the peace accord was signed, Mozambique was one of the world's poorest countries.

Twenty years on, it is on track to rank as the world's fastest growing economies by 2015, according to the Africa Progress Panel, an observer group led by former UN secretary general, Kofi Annan.

However the top 10 per cent of the population has an income 19

times that of the poorest 10 per cent - warns the panel.

Some fear that gap will widen, once royalties potentially totalling tens of billions of US dollars, begin to roll in from substantial coal deposits in the central province of Tete and natural gas fields off the northern coast.

“Ten years ago Mozambique was in the news because of floods and disasters, but now it is an important player when it comes to energy and minerals,” said Edviano Nuvunga, executive chair of Mozambican watchdog, the Centre for Public Integrity.

“We hope natural resources can be used in a more sustainable way to benefit and improve people's lives,” the told AFP.

In a country where half the population is under 18 years of age, memories of the civil war are fading fast.

For the new generation, there is anger at the ruling elite, who are accused of enriching themselves instead of providing social services.

“There is no peace when we have more Mercedes and fewer hospitals... when we have more mega-projects and more unemployment,” the president of Mozambique's “Youth Parliament” Salomao Muchanga said in a statement published in the daily newspaper CanalMoz.

Renamo's leader, Alfonso Dhlakama, who signed the Rome Accord beside his Frelimo counterpart, Joaquim Chissano twenty years ago is rarely seen in public and his party now appears a spent force.

“Renamo has disintegrated,” says Nuvunga adding, “it was a rebel movement that transformed into a political party but lost in the context of a winner takes all system. They didn't have the resources to fund themselves.”

But this week Dhlakama blasted Frelimo for “excluding” and “enslaving” his party, while promising to take unspecified action on the morning of October 5th, after peace celebrations end. - Sapa-AFP