Mozambican Finance Minister denies hidden Ematum loans – Washington DC

Login

Register

http://www.clubofmozambique.com/

Mozambican Finance Minister denies hidden Ematum loans – Washington DC

12:17 CAT | 15 Apr 2016

O Pais (File photo) / Minsiter of Economy and Finance of Mozambique Adriano Maleiane

The Mozambican Minister of Economy and Finance of Mozambique, Adriano Afonso Maleiane, has denied the existence of hidden loans and says that “there was some confusion” over the financing of the Mozambican Tuna Company (Ematum).

“There was some confusion which has ended up creating problems for Mozambique groundlessly. All that has the state’s guarantee is guaranteed. We endorse everything that had been endorsed by the government. This is the reassurance that I continue to give investors”, Maleiane told Lusa after a meeting with IMF analysts to clarify the Ematum case.

“When we are here in the United States we always takes the opportunity to do a bit of cleaning and, of course, at that point [in the Ematum case] it was necessary to clarify, because people also came here to ask. We had to tell. It was important to have that clarity,” he explained.

“The international community will realize that, firstly, Mozambique is a country that has never failed to pay, and secondly, we have said to all investors that all that has a state guarantee is secure – we honour our commitments,” he said.

The Wall Street Journal has recently reported the existence of a second undisclosed loan of US$622 million that investors in the Ematum debt securities repurchase operation were not informed of.

According to Maleiane, during the process of Ematum bond swap a “prospectus” was drawn up with all the relevant information. This document detailed two projects that had government guarantees, but unfortunately Credit Suisse advisers did not report that in this prospectus “the two such loans were there”.

According to the Wall Street Journal, “what investors did not know is that in 2013 the Credit Suisse and VTB [the two banks that organised the swap of Ematum bonds this year] lent US$622 million dollars to another state-owned company called Proindicus to finance the purchase of ships and radar installations to combat piracy”.

The Mozambican minister said that the amount of US$11 billion dollars of debt on public record already included these two loans.

“For investors, this information was important, whether in fact the amount presented as the country’s debt included everything. And I can confirm that it did include it all,” he said, arguing that they were not hidden loans.

“Unfortunately, the way the process was conducted may have led to some confusion. This is what the confusion was about. It is true that from that raw number, one may not know if they [the loans] are there, because there is no list in the prospectus, but these two loans are there,” he stressed.

According to Minister Maleiane, the banks that brokered the operation did not say that that amount in the prospectus included the two loans. “But I do not know why they would say. It is a private loan between the state and the banks. These banks were the ones that did the transfer for multiple clients,” he added.

The minister admitted, however, that the external credibility of Mozambique’s finances was affected.

“It affected the investor who was in doubt, in uncertainty. Those who granted the credit should reassure investors. Al they wanted to make sure of was that the state still continues to include it as a liability, ” he said.

Maleiane also commented on rumours of his possible resignation because of this case. “So far, I know that yes [I’m staying in my post]. But the appointments are made by the president and I don’t know what he is thinking,” he said.

The Ematum scandal involves a tuna company, which is owned by various public bodies including the Mozambican secret services, that has run up debt with the government as guarantor.

Initially regarded as a private business which spent hundreds of millions of dollars on a fishing fleet, it has recently been publicly accepted that Ematum also bought military equipment. Under pressure from donor countries, the business was included in an amending state budget last year.

Source: Lusa