Mozambican leader blames security threat for decision to hide debt from IMF

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Mozambican leader blames security threat for decision to hide debt from IMF

8:25 CAT | 29 Apr 2016

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GPM / Prime Minister Carlos Agostinho do Rosário adresssing the press on Thursday, April 29 2016, in Maputo

Mozambican Prime Minister Carlos Agostinho do Rosario on Thursday blamed the country’s instability for a government decision to hide $1.4bn of debt used to fund maritime security vessels.

The International Monetary Fund (IMF) said two weeks ago it had suspended aid to the African nation “pending a full disclosure and assessment of the facts” over the unreported borrowing. The World Bank has suspended some loans.

Mozambique has been beset by tensions between the Renamo opposition group, which waged a 16-year civil war that ended in 1992, and the Frelimo party that has ruled since independence 40 years ago.

Renamo, which refused to accept the results of 2014 elections, holds seats in parliament but also wages a armed campaign against the government in central and northern areas.

“We didn’t report the debt in due time to our people, our parliament, or even the IMF, as we should have done,” Mr Do Rosario told a press conference in Maputo.

The government “should have done better … but the conditions that the country faces are atypical, unique in the world,” he said. “We have an opposition party that seats at the assembly during the day and lead attacks at night.”

Clashes between government forces and Renamo have increased since February, with attacks reported almost daily and key roads often closed due to the unrest.

Mr Do Rosario also said Mozambique had $9.89bn in foreign debt, a slight increase from previous estimates of $9.64bn.

Following Mr do Rosario’s broadcast Mozambican security forces deployed on the streets of the capital, Maputo, after rumours of planned anti-government demonstrations circulated on social media, witnesses said.

Several anonymous messages spread via SMS and Whatsapp said groups were planning to march on Friday against government corruption, in particular secret borrowing that could cripple the economy in one of the world’s poorest countries.

Armoured vehicles packed with police armed with automatic weapons were stationed on major street corners although there was no sign of unrest, two witnesses told Reuters.

Police on Wednesday told the public not to do anything to unsettle “harmonious coexistence” in the war-scarred former Portuguese colony.

“We will not tolerate any conduct that undermines the order, security and public tranquillity,” a police statement said.

Source: Business Day Live with Reuters / AFP