Hidden debts: PM announces reduction of Proindicus and MAM debts – AIM report

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Hidden debts: PM announces reduction of Proindicus and MAM debts – AIM report

6:19 CAT | 16 May 2025

Photo: Assembleia da República de Moçambique

Mozambican Prime Minister Bemvinda Levi on Thursday announced that the government has negotiated a substantial reduction of the debts owed by the fraudulent state companies Proindicus and Mozambique Asset Management (MAM).

These are two of the three companies set up in 2013-2014 in the corrupt scheme between the Mozambican state security service (SISE), and the Abu Dhabi based group, Privinvest.

Proindicus, MAM and a third fake company, Ematum (Mozambique Tuna Company), borrowed over two billion dollars from international banks, on the basis of illicit guarantees signed by the Finance Minister of the time. Manuel Chang, who is currently serving a prison sentence in the United States for wire fraud.

Since the true scale of this scandal, usually referred to as the “hidden debts” became public knowledge in April 2016, the government has been negotiating with the creditors to cancel, or at least postpone payment, of debts that were only incurred because of bribes paid by Privinvest.

Speaking in the Mozambican parliament, the Assembly of the Republic, at the start of a debate on the General State Account (CGE) of 2023, Levi revealed that an agreement has been reached with the Portuguese Commercial Bank (BCP) and with the VTB bank of Russia through which the debt owed to these banks has been cut from 1.5 billion US dollars to 220 million dollars.

The purpose of this agreement, she said, was “the complete and definitive solution of the dispute between the parties and the total and reciprocal renunciation of claims concerning the financing of Proindicus and MAM, and their respective sovereign guarantees”.

As for the debts to Mozambique’s other creditors, which did not involve fraudulent schemes, Levi said the government remains committed to negotiating debt relief in the terms of the Paris Club agreement “seeking to obtain coordinated solutions to regularise these financial responsibilities or to re-programme the remaining debt”.

As for Mozambique’s Sovereign Wealth Fund, set up under a law of 2004, Levi said the first revenues from the export of natural gas from the Rovuma Basin, off the coast of the northern province of Cabo Delgado, have been deposited in the Fund’s transitional account. The Fund’s Investment Master Plan is now being drawn up, she added.

Levi assured the deputies that “we shall improve the internal control mechanisms, and the management of the public accounts in accordance with the observations and recommendations of Parliament and of the Administrative Tribunal”.

The debate was very familiar – deputies of the ruling Frelimo Party praised the government’s handling of the public finances, and played down the criticisms, some of them very harsh, made by the Administrative Tribunal, the body responsible for overseeing the legality of public expenditure.

Opposition deputies argued that the whole CGE should be thrown out and that the opinion given by the Tribunal proved fraud and corruption on the part of the government.

Every year, much the same arguments are played out in the Assembly, with approval of the CGE a foregone conclusion, thanks to Frelimo’s overall majority.

Levi said that one of the government’s priorities is “the institutional capacity building of the public sector, strengthening inspection and internal control, which will certainly help improve the quality of the services we provide to citizens”.

Source: AIM