Mozambique: PM demands better implementation of Kimberley
File photo: Macauhub
The analyst from the Economist Intelligence Unit following Mozambique’s economy told Lusa today that, without a resolution on the country’s ‘hidden debts’, the International Monetary Fund will not approve a financial assistance programme.
“Without settling these loans, there will not be a complete IMF programme,” Nathan Hayes said in an interview with Lusa, pointing out that Mozambique is currently violating all criteria on debt sustainability.
“Mozambique is violating all [five] limits to debt sustainability, and while the Fund may circumvent this and provide some of its own funding to the country, the debt distress classification has excluded the country from access to commercial finance,” the analyst at the economic analysis unit of the British magazine The Economist said.
Hayes said that, following the restructuring deal with sovereign debt lenders last month, the next step was the resolution of bank loans in default, but this was more complicated.
“A withdrawal of sovereign guarantees [on loans to ProIndicus and Mozambique Asset Management] would expose the persons who contracted the loans to criminal charges, which is a politically unpleasant result for the [Mozambican] government, but ongoing investigations in the United States, UK and in Switzerland on the conduct of the commercial banks [VTB and Credit Suisse] may lead the situation into a legal battle, regardless of government efforts to prevent this,” said the analyst.
At stake is the financial default incurred upon by the two state-owned companies which borrowed about US$1.4 billion in unauthorised loans with sovereign guarantees, which the government has not paid and which implied a default for Mozambique.
“There is increasing evidence from international investigations that the ruling Frelimo party was a direct beneficiary of the international illicit scandal, receiving US$10 million in secret payments taken from the US$850 million loaned to public company Ematum,” Hayes said, noting that the son of the former President of the Republic, Ndambi Guebuza, the former director of the State Information and Security Service, António do Rosário, and the finance minister at the time, Manuel Chang, were accused of allegedly having illegally received at least US$200 million.
“These revelations will create more reputational damage for the party and add to the evidence which may sustain any criminal convictions,” Hayes said, while noting, however, that, “as the local judiciary is under the influence of the party, any ruling on criminal charges” will be decided internally by Frelimo.
The case of hidden debts is related to the guarantees given by the former Mozambican executive, during Armando Guebuza’s terms, for loans of about US$2.2 billion to public companies Ematum, MAM and Proindicus.
Mozambican justice and US justice, which also investigates the case, are trying to determine whether or not part of this money was used to pay bribes to Mozambican and foreign citizens.Source: Lusa
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