Parliamentary clashes over 2015 General State Account and whether it does or doesn’t ‘legalise’ hidden debts

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Parliamentary clashes over 2015 General State Account and whether it does or doesn’t ‘legalise’ hidden debts

5:21 CAT | 11 May 2017

The leaders of Mozambique’s three parliamentary groups on Thursday clashed again on whether registering the illegal guarantees for the loans of the security-related companies Proindicus and MAM (Mozambique Asset Management) in the General State Account (CGE) somehow legalises these debts and obliges the country to pay them.

These two loans, from the European banks Credit Suisse and VTB of Russia, date back to 2013 and 2014. Combined, they amount to over 1.1 billion US dollars. Unlike the loan to a third company, Ematum (Mozambique Tuna Company), which took the form of a public bond issue, the Proindicus and MAM loans were kept entirely secret, and their existence only became public knowledge in April 2016.

The previous government, under President Amando Guebuza, issued guarantees for the loans, thus breaking the ceiling on guarantees established in the 2013 and 2014 budget laws, and violating the clause in the Mozambican Constitution which states that only the country’s parliament, the Assembly of the Republic, can authorise such debts.

In April, the Assembly passed the 2015 CGE, in which the government included the Proindicus and MAM guarantees. For the government and the ruling Frelimo Party, including the guarantees was merely a statement of fact, but the opposition parties denounced it as a way of legalising illegal and unconstitutional debts.

At the formal session on Thursday, closing the current Assembly sitting, the head of the Frelimo group, Margarida Talapa, said that hee party “shares the concerns of Mozambicans in wanting an explanation for the public debt resulting from the guarantees in favour of Proindicus and MAM”.

She accepted the government’s argument that registering the guarantees in the CGE “merely seeks to allow control and monitoring by the Administrative Tribunal and by the Assembly, because the guarantees are acts that affect the public finances”.

Frelimo, Talapa said, believed that including the guarantees in the CGE “cannot and should not hinder the course of the international audit, and that the Attorney-General’s Office should take the actions it deems necessary in defence of collective interests, including those of the state”.

The company Kroll Associates, reputedly one of the top forensic audit companies in the world, has been hired to undertake an independent audit of Ematum, Proindicus and MAM, and Friday is the deadline for it to deliver its audit report.

Frelimo “like all Mozambicans is awaiting expectantly for the conclusion of the international audit by Kroll”, said Talapa, “and we urge all our fellow countrymen to wait calmly for its publication, so that the Attorney-General’s Office can continue its investigations”.

This opinion was not shared by the rebel movement Renamo or by the Mozambique Democratic Movement (MDM) who denounced the inclusion of the guarantees in the CGE.

The head of the MDM parliamentary group, Lutero Simango, insisted that putting the guarantees in the CGE was “an attempt to legalise these debts, turning them into public debt”. It was “a machiavellian blow, fatal to the national economy”.

He blamed these debts for last year’s inflation and the sharp depreciation of the Mozambican currency, the metical (but failed to mention that inflation has now slowed, and the metical is recovering, against both the US dollar and the South African rand).

“Our position is that the people should not pay these hidden debts, much less that they should be included in the General State Account”, said Simango. He wanted “all legal mechanisms” used to recover the money, and for “the authors of the financial fraud that formed these phantom companies” to be held responsible for their acts.

The MDM is asking the Ombudsman, Jose Abudo, to request that the Constitutional Council, the highest body in matters of constitutional law, declare unconstitutional the resolution of the assembly approving the CGE “because it includes illegal debts that were not authorized by parliament”.

There was no such dispute over the current attempts to secure a definitive cessation of hostilities between the defence and security forces and the illicit Renamo militia. All three parliamentary groups welcomed the truce declared in late December by Renamo leader Afonso Dhlakama, which he extended indefinitely last week.

Talapa argued that much of the credit for this should go to President Filipe Nyusi “who, with perseverance, patience, the spirit of inclusion and openness to dialogue, is bringing fine results in the peace process”.

“With his personal, and sometimes discreet commitment, President Nyusi is cementing national reconciliation and the building of a single and indivisible nation, where all can live as brothers, without fear of circulating freely, of expressing our ideas, and of building the future with confidence”, she said.

It was thanks to Nyusi’s efforts, she added, “that we are witnessing the transformation of men whose hearts were previously hardened, into men capable of dialogue, trusting in a tomorrow of hope”.

The head of the Renamo group, Ivone Soares, praised both Dhlakama and Nyusi for their efforts. Such efforts “are not easy”, she said, since the leaderships were still facing resistance.

But Soares also peddled traditional Renamo myths, such as that the 1992 General Peace agreement had not been implemented, and that all Mozambican elections had produced “unacceptable results”.

Simango welcomed “the winds of peace”, although they were “blowing timidly”, but he objected to the alleged exclusions of forces other than the government and Renamo.

“The involvement and commitment of all Mozambicans in keeping the peace is the sole alternative we have if we are to appropriate our dignity as rational beings”, he said. “Effective peace and national reconciliation should be a comprehensive and inclusive national agenda”.

Those who claimed exclusive ownership of the peace process “only reveal their ignorance of the epoch we are living in”, declared Simango. “The future of the nation is collective, requiring the participation of everyone in political and social solutions”.

Source: AIM