By Emma Rumney and Manuel Mucari
BEIRA, Mozambique, Oct 11 (Reuters) - The face of President Filipe Nyusi beams from flags billowing across Mozambique's city of Beira, where T-shirts and posters colour the streets with his Frelimo party's signature red in what is usually an opposition stronghold.
Frelimo's show of force ahead of presidential, provincial and legislative elections on Oct. 15 could signal problems for the main opposition party Renamo, and also threaten a peace agreement signed between the two civil war rivals in August.
While Nyusi is all but certain to be re-elected president, the peace deal has given Renamo hope of winning more political power in a country dominated by Frelimo since the southern African country's independence from Portugal in 1975.
Under the deal, provincial governors will now be picked by the main party in each province, rather than the government in Maputo, and Renamo is banking on traditional provincial strongholds such as Sofala to gain influence.
"The biggest threat to the peace process is if Renamo does not deliver a good number of provinces," said Alex Vines, head of the Africa programme at Chatham House.
The elections come at a difficult time for Mozambique, a poor country with a population of 30 million.
Cities such as Beira were smashed by two devastating cyclones this year and there is a festering Islamist insurgency in the north, which is right on the doorstop of blockbuster projects to develop vast natural gas reserves.
The projects led by oil giants such as Exxon Mobil Corp XOM.N and Total TOTF.PA are expected to attract investment of $50 billion, or four times the size of Mozambique's economy, and the expected gas bonanza has raised the electoral stakes.
Renamo fought Frelimo for 16 years from 1977 to 1992 in a Cold War conflict that killed about one million people. It ended in a truce but sporadic violence has flared in the years since - including after Renamo challenged election results in 2014.
The problem for Renamo in places such as Beira, the capital of Sofala province, is that Frelimo, as well as the smaller Mozambique Democratic Movement (MDM), are muscling in on its traditional turf.
Nyusi's credibility has been knocked by the insurgency and a graft scandal that sank the economy, but Frelimo holds numerous districts in Sofala following local elections last year, and dozens of people told Reuters the ruling party had their vote.
Frelimo spokesman Caifadine Manasse said it had consolidated the rule of law and tackled graft.
Chatham House's Vines said if Renamo wins three or four of Mozambique's 10 provinces in next week's vote, that should be sufficient to placate its supporters.
But any fewer and a recent bout of party infighting over the peace deal could worsen. Renamo's leadership could lose control of sections of the party, threatening commitment to the agreement or even a return to targeted violence, he said.
Breakaway Renamo fighters dissatisfied with the pact have already staged attacks. They want elections postponed and for Renamo's new leader, Ossufo Momade, to resign.
Governors run local services and have a degree of power over spending, state-owned land and council jobs. Though some critics say a new position - the government-appointed provincial secretary of state - will still hold most of the power.
Renamo spokeswoman Maria Ivone Soares said the party was convinced it would win in Sofala and other provinces.
"The results are unlikely to be disappointing because of the ... corruption, unemployment, inequality and misery that have been promoted in this country since national independence."
Renamo supporters want the party to upend a perceived system of patronage whereby "comrades" - Frelimo members and their families - are first in line for jobs in local government as well as state-run projects and companies.
"If I had influence my son would be working now," said Joaquim, 42, sitting with friends on a log at a camp for cyclone victims in Guara Guara, 45 km (30 miles) west of Beira.
"Many young men are growing old without employment ... They will not go anywhere," he said, asking for his second name not to be published for fear of retribution.
His family, including eight children, lost everything when Cyclone Idai slammed into the province in March. They live with 11 other families in a tent and with no tools to farm or fish, spend their days sitting around in the dusty camp.
Yet even among Renamo supporters, there is a dislike of Momade, who has struggled to fill the shoes of charismatic former leader Afonso Dhlakama since his death last year.
Joaquim's friend Jose said this wouldn't necessarily stop him voting Renamo but he was considering the MDM, a group that has benefited from waning support for the two main parties.
It sucked votes from Renamo in a 2009 general election and Frelimo in local elections in 2013, and is popular in Beira - which is significant for the overall outcome in Sofala.
"There's an open gate for MDM," leader Daviz Simango told Reuters, speculating that Renamo would be relegated to third in the province. "And it won't only happen in Sofala."
GRAPHIC-Past Mozambique election resultshttps://tmsnrt.rs/35pauzV
FACTBOX-Key issues in Mozambique election
FACTBOX-Candidates in Mozambique's presidential election
(Editing by Tim Cocks and David Clarke)
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