Fitch expects Metical to fall to 65.5 to the US dollar, with inflation at 5.1% by 2020
Photo: O País
The Mozambican Transport Minister, Carlos Mesquita, has admitted that the publicly-owned airports company, ADM, is facing a financial crisis, but, cited by the independent television channel STV, he claimed that the company’s problems had been “exaggerated”.
But Mesquita did not deny that ADM’s bank accounts have been frozen by court order, forcing the company to take out further loans simply to pay its workers their wages.
ADM owes the banks a total of 17 billion meticais (about 274 million dollars). The critical part of this debt is 820 million meticais owed to Nosso Banco (“Our Bank”), which collapsed in 2016.
This was one of the smallest commercial banks in the country and it only existed in Maputo, with three branches in the capital and eight ATMs. The Bank of Mozambique ordered its dissolution and liquidation when it became clear that it could not meet its obligations.
Nosso Banco had been in deep trouble long before the central bank ordered it to stop trading. Nobody has yet explained why ADM was doing business with Nosso Banco.
Two and a half years after Nosso Banco was closed, the liquidation commission is still chasing the extinct bank’s debtors, including ADM. With no sign of ADM paying up, the liquidation commission took the matter to court, demanding payment within a year. The Maputo City Court sided with the Commission, and ordered that ADM’s accounts be frozen.
Mesquita told reporters that among the reasons for ADM’s debts was the fact that Nacala International Airport is not generating the revenue expected. “It was expected that the airport would be operating with much more traffic, but unfortunately it isn’t”, he said.
Nacala airport is the most modern in the country, and was inaugurated by former President Armando Guebuza in 2014. Building the airport involved a loan of 125 million dollars from Brazil and a further 75 million dollars from Mozambican banks.
But it is no use having advanced facilities at the terminal if no airlines want to fly to Nacala. Not a single foreign airline has expressed an interest in fights to Nacala. For years, only Mozambique Airlines (LAM) flew a couple of flights a week between Maputo and Nacala.
Today the airport is somewhat busier, since a second Mozambique-registered company, Ethiopian Mozambique Airlines, is using it, and there are flights to Beira, Tete, Quelimane and Nampula as well as Maputo. But there is still no sign of any international flights.
What Mesquita did not mention is that the Brazilian contractor Odebrecht paid bribes for the Nacala Airport contract. In 2018, Odebrecht admitted, in a case brought by the US Department of Justice, to paying over 788 million dollars in bribes in a dozen countries between 2001 and 2016.
900,000 dollars went to bribe officials in Mozambique, and the Attorney-General’s Office (PGR) is charging two of Guebuza’s ministers with corruption – former Transport Minister Paulo Zucula and former Finance Minister, Manuel Chang. The latter is under detention in South Africa for his involvement in the scandal of Mozambique’s “hidden debts” – the loans of over two billion dollars that three fraudulent, security-related companies, obtained from the banks Credit Suisse and VTB of Russia, thanks to the guarantees signed by Chang.
The PGR had now submitted the charge sheet against Zucula to the Maputo City Court and a trial could begin in the near future.
Mesquita also told STV that the government has launched a tender to find a company to manage Nacala airport –but nobody has expressed any interest.
The Minister insisted that ADM “has a structure which is functioning. But it does not have enough to service the debt as was planned. It is making an effort, in terms of restructuring”.
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