Is the investigation of hidden debts crucial for a Maputo-IMF reconciliation? – Deutsche Welle

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Is the investigation of hidden debts crucial for a Maputo-IMF reconciliation? – Deutsche Welle

4:08 CAT | 25 Aug 2016

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Economists are divided on the issue of a reconciliation between the International Monetary Fund (IMF) and Maputo. The fact that the country is a member of the IMF supports the optimism of some, while according to others the absence of a serious investigation could further distance the parties.

Mozambican president Filipe Nyusi will visit the United States in mid-September, during which period an IMF mission is scheduled to visit Mozambique in the context of the clarification of hidden debt estimated at US$1.4 trillion made by state-owned enterprises and backed by state guarantees. The visits are seen as a kind of rapprochement between Maputo and the Bretton Woods institution.

Mozambican economist Jose Chichava is one of the apologists of this vision. “We must assume that Mozambique is member of the IMF, and as such it would not be wise even for the Fund to not approach a member when it has problems and help solve the problem.”

Space for dialogue is also valued by another Mozambican economist. Orlando’s Conceição welcomes the fact that all channels for clarifying and better managing the hidden debts are being explored.

Government must change attitude

But Conceição is not so optimistic about the way the Mozambican government is handling the case. According to him, “While the country does not take this with due seriousness, accepting a forensic audit by international experts, and while not taking responsibility for what happened, I do not see great results”.

And Conceição expects more from the government. “It will be a visit, working on a technical level, but there has to be a commitment whereby Mozambican authorities recognise that there was illegal action and take measures.”

The IMF called for an international audit last June, but President Nyusi argued that an investigation must first be conducted internally by the Attorney General’s Office and the parliament, which created a commission, though not an all-party one.

Will the IMF return to the country without the results of the investigation being made known? Orlando da Conceição says: “I do not believe the IMF’s attitude will progress beyond this. In order to make further commitments, continue to give their support, this [investigation] is a sine qua non condition. I have many doubts that the work that the attorney general is conducting will have any effect. I will not even talk about parliament, because parliament is truly wasting time. There is minimal respect for the voters. People in parliament are not taking this matter with due seriousness, so I do not see any light at the end of the tunnel.”

Is there a light at the end of the tunnel? Yes!

José Chichava holds a contrary view, and is more optimistic. “I think we will find a way. I think the country will get back on track and the International Monetary Fund will resume the relationship that it has always had with Mozambique,” he says.

Meanwhile, the international rating agencies have been lowering Mozambique’s ratings. The confidence of financial agencies is shaken, and they warn of a failure to satisfy creditors. MAM, one of the companies that benefited from the hidden loans, has already failed to make its first repayment, and the state also had to intervene in the case of EMATUM, another company involved in the financial scandal.

Source: Deutsche Welle