MDM calls for measures against those responsible for ‘hidden debts’ – Mozambique

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MDM calls for measures against those responsible for ‘hidden debts’ – Mozambique

8:04 CAT | 12 Dec 2016

Voa Portugues / Venancio Mondlane

The opposition Mozambique Democratic Movement (MDM) on Monday insisted that those responsible for the government-guaranteed debt incurred by the security-related companies Ematum (Mozambique Tuna Company), Proindicus and MAM (Mozambique Asset Management) should be held responsible for the debt in administrative, civil and criminal terms.

At a Maputo press conference, the MDM delivered its response to the report from the parliamentary commission of inquiry into the debts, which was delivered to a plenary session of the country’s parliament, the Assembly of the Republic, held behind closed doors last Friday.

The MDM was the first of the three parliamentary groups, in April, to suggest setting up a commission of inquiry. But when the commission was formed, the MDM, because it only has 17 deputies in the Assembly, was only entitled to appoint one commission member. The majority Frelimo Party appointed ten, while the largest opposition party, Renamo, boycotted the commission.

The MDM commission member, Venancio Mondlane, told reporters that members of the former government, headed by President Armando Guebuza, and Guebuza himself, were responsible for breaking the 2013 and 2014 budget laws, and for violating the Mozambican constitution by issuing the guarantees for the three loans. Taken together, the loans amounted to more than two billion US dollars, and added 20 per cent to Mozambique’s foreign debt.

That the Guebuza government did violate the Constitution and the budget law is not in doubt – it is one of the main conclusions from the report of the Commission.

The MDM was convinced that Ematum and Proindicus had been set up illegally because part of the loans to both these companies was used to acquire defence and security equipment, and under Mozambican law this is exclusively the responsibility of the armed forces.

One of Mondlane’s strongest criticisms of the report is that it contains no list of the assets acquired by the three loans and what each of them cost. “It was not possible to obtain reliable information that would allow us to make an analysis and technically rigorous valuation of the assets of the companies and from this make a rigorous reading of the use of the funds”, the MDM document said.

Nonetheless, it is known that there are 69 Ematum and Proindicus boats of various types. The MDM’s assessment of the possible costs of these boats is 270.9 million US dollars. The Ematum and Proindicus loans amount to 1.472 billion dollars. Subtracting the estimate for the boats, that leaves around 1.2 billion dollars unaccounted for.

Other components of the loans were to be spent on such items as radars, training, transfer of technology, drones and light aircraft. The MDM asks whether this can really absorb 1.2 billion dollars.

A further question raised by Mondlane concerns the suitability of the boats. He noted that a naval defence specialist cited by the London publication “Africa Confidential” claimed that the three Ocean Eagle trimaran patrol vessels, purchased with some of the Ematum loan are not adapted to the stormy condition often encountered in the southern Indian Ocean. Apparently the current Defence Minister, Salvador M’tumuke agrees – in giving testimony to the commission, he said that he would not have acquired such boats because “they don’t have the capacity to put out to the high seas”.

The MDM is also highly critical of the Ematum fishing boats and their technical specifications. Interviews with crew members indicate that the boats have suffered repeated malfunctions. So far only nine of the 24 fishing vessels have even been licensed.

Production is minimal. For Ematum to be sustainable, it needs to fish 20,000 tonnes of tuna a year. But, according to the government’s figures, in 2015 it only caught 273 tonnes, and in the first quarter of 2016 a mere 34 tonnes. This was with five boats only – but even if all had been fishing in 2015 at the same average catch rate, Ematum would have brought in 1,146 tonnes, a far cry from the 20,000 tonnes sustainability target.

The MDM notes that it is the task of the 21 longliners in the fleet to catch the tuna, while the three trawlers are supposed to catch the squid used as bait. But the trawlers have never fulfilled his purpose: the MDM says the Commission learnt that the squid used was acquired in Argentina.

The miserably low production, the MDM comments, shows that the projections from the viability studies were “highly optimistic, based on data that was out of context and excessively extrapolated. This was made worse by lack of experience of longline technology used by the boats acquired, leading to unambiguously disastrous results”.

The MDM’s assessment of Proindicus and MAM is similarly damning, and the MDM describes both companies as “stagnant”.

The MDM’s conclusion is that the State shoud not take responsibility for the “hidden debts”. They “should not be inserted into the state budget and should not be paid by the public treasury”, it declares.

Source: AIM