Mozambican government denies existence of new hidden debt

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Mozambican government denies existence of new hidden debt

10:00 CAT | 17 Oct 2016

Mozambican Minister of Economy and Finance of Mozambique, Adriano Maleane, on Friday denied the existence of more alleged hidden debt worth US$900 million (EUR818 million) reported in the international and Mozambican press last week.

“There is no record of any such debt,” Adriano Maleane is quoted by public broadcaster Radio Moçambique as saying. He invited the authors of the information to submit any evidence they had for public scrutiny.

In its October issue, the London-based Africa Confidential publication ran a report asserting the existence of a further US$900 million (EUR818 million) in ‘undisclosed debt’ on the Mozambique accounts, joining the US$1.4 billion (EUR1.2 billion) already admitted to.

According to the article, which made headlines in Wednesday’s edition of Mozambican weekly Canal de Mozambique, the money was used by intermediaries of the Mozambique Liberation Front (Frelimo, the ruling party) to purchase weapons and armoured vehicles.

“Someone must have some basis for [the report],” Maleane said, “so all we can do is ask that person to guide us.”

The minister pointed out that the Mozambican government had been cooperating with the International Monetary Fund to satisfy the institution’s requirements for the resumption of the financial support suspended due to the so-called hidden debts.

Including loans taken on by the government, Mozambique’s public debt stands at US$11.66 billion (EUR10.4 billion), of which US$9890 billion (EUR8900 billion) is external. This represents 86 percent of gross domestic product (GDP), up from the 2012 figure of 42 percent.

The IMF is demanding an independent, international audit of the Ematum, Proindicus and MAM companies that took on government-guaranteed loans between 2013 and 2014, and the Fund team in Maputo at the beginning of the month said the Prosecutor-General’s Office “has made considerable progress” in drafting a document enabling the audit.

At the conclusion of the visit, the institution said that “Mozambique is facing a difficult economic environment”, with a growth forecast of 3.7 percent for this year (against 6.6 percent last year) and inflation, which reached 21 percent year on year in August, fuelled by a depreciation of the metical by about 40 percent since the beginning of the year, “looking to rise sharply”.

Source: Lusa