China, India extend grace periods for Mozambique debt repayments
The lawyer representing Mozambican state-owned companies accused of concealing US$1.4 billion in loans has claimed that the International Monetary Fund and the World Bank were aware of loans to Proindicus and Mozambique Asset Management (MAM).
In an interview with Lusa, Alexandre Chivale said that the two financial institutions “were aware of the loans” and argued that “it is impossible to transfer these values without the IMF and the World Bank knowing” because international financial transactions “had to draw the attention of these entities”.
According the lawyer representing these companies and the Mozambican Tuna Company (Ematum), all of them owned by the country’s secret police, “it is not possible to move US$2.1 billion [through VTB banks and Credit Suisse] without the international financial system knowing”.
In his first interview since the hidden debts scandal broke in Mozambique, Chivale puts forward as an argument the holding of a military parade in Maputo, on September 24, 2014, in which “were present members of government, the diplomatic corps and IMF staff. Therefore, there was no doubt about the implementation of the coastal defence project – they were no hidden debts”.
Contrary to assertions by the World Bank, the IMF and international donors that the debts were not accounted for, Chivale states that “the implementation of this project [defence of the Mozambican coast] was made with the knowledge of these institutions, including the means acquired by Proindicus”.
The lawyer also points out that “all the official entities were summoned [to this meeting in September 2014] precisely to show the coastal control capacity that Mozambique had just acquired”.
The news published at that time, however, only gives account of the controversy regarding a bond loan of US$350 million made by Ematum, and endorsed by the state, and there is still no public reference to loans from Proindicus and MAM, which were not known until the Wall Street Journal article, a year and a half later.
The hidden debt scandal broke in April 2016, with the uncovering of state-guaranteed loans amounting to US$622 million to Proindicus and US$535 to MAM, throwing Mozambique into a crisis unprecedented in recent decades.
International partners suspended aid, the currency fell steeply and inflation rose to 25 percent in 2016, making life in one of the poorest countries in the world considerably harsher
The resumption of international aid was made dependent on an independent audit of the debts, an audit whose executive summary was distributed in July by the Attorney General’s Office but has been criticised by some of the institutions involved.