Mozambique: Logistics corridors to transition towards specialised management - report
Lusa (File photo) / Christine Lagarde
The director general of the International Monetary Fund (IMF), Christine Lagarde, said the suspension of funding that the institution provides to Mozambique was justified by clear signs of hidden corruption.
“When we put in place a programme with a country, we look at corruption. We look at what reforms could improve the corruption level. When we see a country and a programme with the IMF where international community money is committed, that is not respecting its financial disclosure engagement, which is clearly concealing corruption, we suspend the programme. We did that just recently with Mozambique,” Lagarde said last week, in an interview with the BBC radio programme Woman’s Hour.
The IMF’s managing director was responding to a question on how the financial institution deals with the issues of corruption, but also tax evasion and money laundering.
“First of all, when we perform a program with a country, we have to look at corruption and what could improve the levels of corruption,” said Lagarde, who, in addition to Mozambique, also gave the example of Ukraine.
The revelation at the end of April of undisclosed state-guaranteed loans totalling US$1.4 billion (EUR 1.25 billion) led the IMF to suspend payment of the second installment of a loan to Mozambique and cancel a mission to Maputo.
The G14 group of international contributors to the state budget also suspended its payments, a move followed by the US, which announced it would review its support to the country.
The disclosure of undisclosed debts incurred between 2013 and 2014 led to Mozambican Prime Minister Carlos Agostinho do Rosário being called to Washington to provide information to Christine Lagarde.
Besides the prime minister, a technical delegation from the Ministry of Economy and Finance met the IMF to determine the full scope of the Mozambican government spending.
Speaking at a press conference in Washington last week, IMF spokesman Gerry Rice indicated that the IMF suspended mission to Maputo had been rescheduled for June, but would not comment on the possibility of a rescue.
“On its visit, the team will continue to gather facts and information, carry out investigations if necessary and assess macroeconomic implications. As for conditions, all that will be discussed during the mission,” he said.
Mozambique Asset Management (MAM), one of the companies benefiting from an undisclosed state-guaranteed loan, failed on Monday to make its first loan repayment, the daily O País reported yesterday.
According to the newspaper, quoting a source close the process, the company is attempting to renegotiate the value of its US$535 million (478 million euros) debt.
Ratings agency Fitch posted Mozambique as having a high risk of financial failure on Monday, putting the country at CC (‘no investment’ or ‘junk’) grade, and on Friday, Moody’s similarly downgraded Mozambican debt securities into negative Caa1 territory.
Minister of Economy and Finance Adriano Maleiane acknowledged a week ago in a parliamentary hearing that MAM had no money to pay its first installment and said it was seeking to restructure its obligations.
“It would be hard to find [state] budget money to repay the debt,” Maleiane has said.
Like MAM, the Mozambican government is trying to prevent government-guaranteed debt contracted by Proindicus, a total of US$622 million (EUR551 million) from impacting public accounts.
Last month, the Attorney General of Mozambique announced the opening of an investigation into the so-called hidden debts incurred with the guarantee of the Mozambican government between 2013 and 2014.
Woman’s House (18 May): http://www.bbc.co.uk/
Leave a Reply
Be the First to Comment!
You must be logged in to post a comment.
You must be logged in to post a comment.