A Mozambican history of hiding debt – Joseph Hanlon

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A Mozambican history of hiding debt – Joseph Hanlon

5:28 CAT | 26 Apr 2016

Atlantic bluefin tuna (Thunnus thynnus) feeding in the Mediterranean Sea

The set of five loans taken in secret in 2013 totals $2137 to $2207 mn. But this is just part of Mozambique’s total foreign debt. And it appears that Mozambique has been telling different stories to everyone, from the IMF to bondholders to its own parliament and courts, over its debt.

Zitamar reported Tuesday (19 Apr) that in 2012 (before the secret loans) the public was told the debt was $4.8 bn but Ematum bond investors were told it was $5.2 bn – already a $400 mn gap, suggesting an earlier secret loan.

In 2013 the gap was already $1 bn – the public was told public debt was $5.8 bn while investors were told $6.8 bn. Ematum bondholders were told last month that in 2014 (after the five secret loans were taken) Mozambique’s debt was $8.2 bn while the public statement was $7 bn. This difference looks like the four secret loans.

The Tribunal Administrativo statement last November on government finances said there were only three government guaranteed loans – Ematum, the airports authority, and the road fund. But even that was not correct. Zitamar points out the Finance Ministry Spokesman Rogerio Nkomo admitted on STV on 15 April that the ProIndicus loans were government guaranteed.

Government guaranteed loans must be approved by parliament, but it appears that the IMF and donors, parliament, and the Tribunal Administrativo were not informed about some loans. “It is probably one of the largest cases of the provision of inaccurate data by a government the IMF has seen in an African country in recent times. They deliberately kept from us at least a billion dollars, possibly higher, of hidden loans,” an anonymous IMF official told the Financial Times (18 Apr)..

The Ematum rescheduling prospectus issued earlier this year said total debt in 2015 was $11 bn, of which $9.7 was foreign debt, according to Zitamar. The jump from $8.2 bn to $11 bn is not explained.

The IMF issued a terse note on Saturday 23 April saying: “Following a meeting held earlier this week between Carlos Agostinho do Rosario, Prime Minister of Mozambique and Ms. Christine Lagarde, IMF Managing Director, a technical team led by the Vice-Minister of Finance, Ms. Isaltina Lucas, worked intensively with the IMF Mozambique staff team. The authorities acknowledged that an amount in excess of $1 billion of external debt guaranteed by the government had not previously been disclosed to the Fund. Staff welcomed the authorities’ extensive disclosure of information which constitutes an important first step toward full restoration of trust and confidence.” The IMF has, however, suspended further lending to Mozambique, including the second tranche of an already agreed loan.

The has been no similar “extensive disclosure” in Mozambique, however.

Source: Joseph Hanlon News