Mozambique: Sovereign fund rules do not assure stability, autonomy - civil group
The Centre for Public Integrity (CIP) – a non-governmental organization dedicated to the surveillance of public finances in Mozambique – says that the Mozambican government has violated budget transparency statutes by concealing debts guaranteed by the state, and that the people are entitled to a full disclosure of the real situation.
“The Mozambican people deserve detailed and quick clarification of the discrepancies noted between the statements of the government and the International Monetary Fund [IMF],” a CIP document sent to Lusa on Friday declares.
Urging the government to disclose the full situation, CIP says that the government has broken the Budget Transparency Act by omitting information relating to debts from public accounts while sharing them with investors in the Ematum securities repurchase scheme.
“Neither the Ematum debt nor new debt were approved by parliament,” says the document, which describes the public debt situation in Mozambique as “disastrous”.
At the end of March, the Wall Street Journal reported a state-guaranteed loan of US$622 million dollars to the state company Proindicus, contracted in 2013 with Credit Suisse and Russian VTB Bank, eligible for increase to US$900 million a year later.
On Tuesday, the Mozambican prime minister met the director general of the IMF, Christine Lagarde, and, according to a statement released after the meeting, recognized the existence of more than US$1 billion dollars of Mozambican external debt that had not been declared.
For the IMF, this was “an important first step”, to be followed by further information and documentation by the Mozambican government so as to “establish the facts and allow the Fund to make a full evaluation” and “identify steps to restore confidence”.
The IMF cancelled a planned mission to Mozambique last week and suspended the payment of the second installment of a loan to the Mozambican government.
Besides the interruption of foreign currency disbursements by the IMF, the CIP document goes on to say, the suspension of the body’s mission will have a strong impact on the relationship between the country and other partners, warning that private sector investment may decrease.
“The expectations of Mozambican economic agents are clearly influenced by recent events,” the CIP document notes, adding that the Mozambican economy has been shaken since 2014 by a significant drop in revenue, with direct impact on the “financial health of the country”.
Leave a Reply
Be the First to Comment!
You must be logged in to post a comment.
You must be logged in to post a comment.