Renamo MPs boycott hidden debts hearing: 15 from Frelimo, one from MDM attended

Login

Register

http://www.clubofmozambique.com/

Renamo MPs boycott hidden debts hearing: 15 from Frelimo, one from MDM attended

3:34 CAT | 19 May 2016

In File Club of Mozambique / Mozambique's parliament, in Maputo

Mozambique’s largest opposition party Renamo boycotted yesterday’s parliamentary hearing on the government’s undisclosed debt in protest at the hearing having been scheduled for a specialized committee instead of a plenary session.

The fact that Minister of Economy and Finance Adriano Maleiane yesterday addressed the Planning and Budget Committee and not a full parliamentary session, as demanded by the Mozambican National Resistance (Renamo), “reveals [an attitude of] authoritarianism towards the people to whom you owe a full and in-depth explanation”, Renamo deputy Jose Samo Gudo told a press conference.

“The move to bring the government to clarify the debt in specialized committees denotes a vain attempt to deceive Mozambicans, the international community and debt creditors, and a clear violation of constitutional norms and other ordinary legislation in our state, which is supposed to be a state of [governed by] law,” the parliamentarian continued.

Fifteen members of the majority Mozambique Liberation Front (Frelimo) bench and one member of the Mozambique Democratic Movement (MDM), Mozambique’s third-largest political party, attended yesterday’s session.

According to Renamo, Frelimo is acting in “subordination to the Government’s deception strategies,” and accuses the majority bench of scheduling the hearing “unilaterally” and on the eve of an equally viable plenary sitting.

Minister Maleiane to the Parliamentary Committes that state company Mozambique Asset Management (MAM), which benefited from state-guaranteed loans contracted outside public accounts, cannot afford the first repayment installment due on Monday 23 May and is seeking to restructure the debt in order to avoid default.

“According to the company, MAM is negotiating to restructure because it does not have sufficient income to pay” the US$178 million (EUR158 million) first installment, Minister of Economy and Finance of Mozambique Adriano Maleiane told National Assembly deputies yesterday.

Maleiane said that the purpose of restructuring MAM’s 2014 US$535 million dollar (474 million euros) state-guaranteed loan is to avoid the company’s obligations falling upon the state’s general budget.

“It would be hard to find budget money to pay the debt,” Maleiane admitted, adding that the government was satisfied with the company’s efforts and that negotiations with creditors “are going well”.

The Minister said that MAM, which is 98 percent owned by GIPS, a Mozambican State Information and Security Service company, provides services in oil, mining and ports, and has a permit to build a shipyard in Pemba.

The credit maturity is six years at 7.7 percent, with a deferral period of two years, and the first of four annual installments is due next week, but according to Maleiane the company has not yet generated the revenues to repay the debt on its own.

Nevertheless, “this provision will not affect the budget because the company is working with creditors”, Maleiane explained.

Maleiane aso said that a technical team from the International Monetary Fund (IMF) planned to visit the country in June.

“Negotiations between the Mozambican government and the IMF are going well. We have been exchanging information and working on the analysis of macroeconomic implications. Next month, a technical team from the IMF will visit Mozambique,” Maleiane told parliament’s Planning and Budget Committee.

The Minister of Economy and Finance said that the IMF’s assessment of the impact of public debt in the country’s growth projections was important, as investors and international partners follow the analysis of international financial institutions closely.

The minister also said that the public debt is under control and within the parameters, though admitting payment difficulties in the short term.

The government of Mozambique acknowledged at the end of April the existence of undisclosed debts totalling US$1.4 billion (EUR 1.25 billion), which it justified on national security grounds.

The revelation of loans government-guaranteed loans contracted between 2013 and 2014 led the International Monetary Fund to suspend the second installment of a pre-agreed loan to Mozambique and cancel a visit to Maputo.

The G14 group of state budget donors also suspended its payments, followed by the US, which announced this week that it would review its bilateral support to the country.

Including the recently disclosed loans, Mozambique’s public debt now stands at US$11.66 billion (EUR10.1 billion), of which US$9,890 million (EUR8.6 billion) is external. This represents over 70 percent of gross domestic product, up from the 2012 figure of 42 percent.

Source: Lusa