CIP accuses government of taking out new ’hidden loans’

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CIP accuses government of taking out new ’hidden loans’

12:31 CAT | 17 Aug 2017

The Public Integrity Centre (CIP), a Mozambican NGO, is accusing the government of having borrowed money between 2015 and 2016 without informing parliament, indicating that lack of transparency in the management of public resources continues to be a problem.

In an analysis entitled “Government continues to borrow without transparency”, CIP says that the Mozambican authorities have contracted loans of 4.4 billion meticais (61 million Euros) to the National Road Administration (ANE) and another of 3.1 billion meticais (43 million Euros) to Beira Fishing Port with the EximBank of China.

The CIP states that it reached this conclusion by comparing the General State Account of 2016 (CGE) with the Budget Execution Report (REO) for the same year, both published in the National Budget Directorate of the Ministry of Economy and Finance’s website.

Also Read: Mozambique public debt still increasing

“As in previous years, the budgetary figures in the CGE differ from those of the REO. It is natural that there are some divergences in the documents, since the CGE presents a more consolidated analysis of the public accounts,” the CIP analysis reads.

But the document goes on to note that some of the differences are quite significant, which prevents analysis with the quality and fidelity required for public accounts.

According to the CIP, the CGE includes 220.6 billion meticais of expenses (3.1 billion Euros) and the REO, 209.9 billion (2.9 billion Euros).

This translates into an 8.6 percent increase in central expenditure in the 2016 CGE compared to the 2016 REO.

“The category that most influenced this increase was Active Financial Transactions, in particular Retrocession Loans,” the text says.

Also Read: Mozambique grows 4%, public debt to reach 128.1% of GDP this year – S&P

The CIP feels the ‘hidden debts’ scandal has not acted as a brake on bad practices in the management of public finances.

In April last year, the international press revealed that the former Mozambican executive secretly endorsed loans worth more than EUR 1 billion in favour of Proindicus and MAM companies linked to maritime security between 2013 and 2014.

The discovery of the debt led major donors to Mozambique’s state budget and the international financial institutions to cut their aid to the country, making resumption of support conditional on an international audit.

The debts discovered in April 2016 were additional to the more than EUR 700 million which the Mozambican executive endorsed in 2013 in favour of the Mozambican Tuna Company without the knowledge of the Assembly of the Republic and international donors.

Also Read: World Bank says Mozambique must restructure public debt

Source: Lusa