Accelerating round the bend: The FT’s Maputo Investor conference – By Colin Waugh

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Accelerating round the bend: The FT’s Maputo Investor conference – By Colin Waugh

1:54 CAT | 02 Nov 2016

Saint Louis Studio / Steven Le Vourc'h (File photo) / Minsiter of Economy and Finances Adriano Maleiane

Fresh on the heels of last week’s shock confirmations of effective national insolvency delivered by the Mozambican Finance and Economics Ministry to a core group of creditors convened in the UK, today the London–based Financial Times publication showcased the discussion in the heart of Maputo during the course of its Mozambique investor conference. The FT brought together a group of investors, officials, diplomats and entrepreneurs in the Hotel Polana to offer a chance to all to air their views on the current fallout from debt implosion, as well as the economic prospects and the future of investment in the country.

Entitled ‘Accelerating a Return to Growth and Stability’ the esteemed audience of assembled delegates heard from the President of the Republic, Filipe Nyusi, and Minister of Finance Adriano Maleiane in the event’s opening session.

Minister Maleiane made no attempt to conceal the depth of the country’s financial distress; in fact he offered a rerun of last week’s London presentation, including the headline-grabbing debt mountain, inflation, and currency depreciation figures, all of which had already hit the front pages of the country’s independent media at the end of last week.

Maleiane also especially stressed the absolute overriding imperative of eliminating corruption going forward as an essential component of rebuilding trust with donors and investment partners alike. But when asked about the fate of the $2 billion-plus of ‘disappeared’ loan proceeds, the most experienced financial public servant in the country could only reply that he ‘hoped to learn the answer to this question with the results of the international independent audit’ which is due to take place in the coming months.

The role and responsibility of Credit Suisse and the other international banks which hashed together the EMATUM credit and other sovereign guaranteed loans between 2012 and 2014 was also discussed, and here too Adriano Maleiane declined to be drawn into controversy. He said that he hoped that the banks’ responsibility and role in the scandal including their absence or otherwise of due diligence on behalf of their investors would also come to light in the process of the forthcoming in investigations.

Featured discussion from the podium included testimony from Ari Aisen, representative of the IMF, the institution which not many months ago forecast a possible 20-plus per cent GDP growth for Mozambique, as a result of gas royalties and other natural resource revenues, among other sources of perceived surging national income. With Mozambican expectations of an early return of IMF financial support in the light of the debt mega-frauds now more based on hope than reality, Mr. Aisen diplomatically expressed confidence that the process would lead to a positive outcome, despite admitted past deceptions and disappointments.

The issue of timing of natural gas revenues, which all seem to agree is the only true path to financial redemption for Mozambique, lies at the heart of any discussion of the country’s financial future. A key panel discussion on energy faced off the current head of the National Petroleum Institute (INP), Carlos Zacarias, with external experts from the gas industry and Roland Kjell from the Norwegian state energy development sector.

While Mr Zacarias took a stab at the question offering 2020-21 as a possible time frame for the start of gas shipments and revenues, other panellists were more cautious. Paul Eardley-Taylor of Standard Bank’s energy division preferred to forecast “five years from the signature of the first FID” as the more likely start date for shipments. Which as regular readers of Anadarko’s press releases since 2012 well know, is fully expected to be sometime ” in the first quarter of next year…”

The conference continues this afternoon with discussions on infrastructure, agriculture and financial technology.

By: Colin Waugh