Mozambique: $14 bn debt, selling assets – Joseph Hanlon

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Mozambique: $14 bn debt, selling assets – Joseph Hanlon

5:17 CAT | 08 Jun 2016

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Mozambique’s actual total debt will be $14 bn, significantly more than present estimates of $12bn, according to a study by IESE, published 2 June: “A divida secreta mocambicana: impacto e consequencias economicas”. The difference is because the Mozambique Treasury reports debt on the basis of actual spending, but the value of debts contracted is larger. Thus the Maputo-KaTembe bridge is still under construction so not all of the loan has yet been spent and so it not treated as debt.
http://www.iese.ac.mz/wp-content/uploads/2016/06/IESE_Ideias86.pdf

IESE also notes that “the bulk of the debt was for arms or for large projects with doubtful returns and priority, and which are very long term and thus do not generate the capacity to service the debt in the short and medium term.”

Meanwhile, Mozambique railways (CFM, Caminhos de Ferro de Mocambique) is to sell all its shares in the concession companies running the port of Nacala, Malawi Railways, and the railway from Nacala to the Moatize coal mines, the Council of Ministers decided Tuesday. They hope the sale will raise $150 mn. (O Pais 8 June).

Three coalitions of civil society groups have issued a joint statement saying “it is unacceptable to pay illegal debt” and that $2 bn of the secret loans was illegal and unconstitutional.
http://www.fmo.org.mz/documentos/Posicionamento-FMO-2016-divida-publica-II.pdf

And Ematum, in a curious statement in English on its otherwise inactive and incomplete website (http://www.ematum.co.mz/), says “misinformation led to statements from the Ministry of Finance, and then misleading press articles, concerning the building standards of Ematum’s trawlers. Ematum wishes to confirm its utmost satisfaction with the quality of the fleet that was delivered as well as its building standards that fully satisfy Ematum’s operational and commercial needs. Ematum is currently working on finalizing all remaining licenses from the relevant authorities in the Republic of Mozambique in order to develop its fishing activities according to its objectives and plans.” Ematum was set up as part of the first of the secret loans. Finance Minister Adriano Maleiane told MPs that 10 of the 24 EMATUM fishing boats are being refitted by a South African company so that they meet the technical specifications demanded by the European Union for boats that catch fish for the European market. But the statement does, in effect, confirm that boats that arrived in Mozambique in 2014-5 are still not licensed to fish.

By: Joseph Hanlon.

Source: News reports & clippings