Mozambican president says Government will support PGR in investigating hidden debts

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Mozambican president says Government will support PGR in investigating hidden debts

11:54 CAT | 27 Jun 2017

Lusa (File photo)

Mozambican President Filipe Nyusi said on Sunday in Maputo that his government would grant all institutional support to the Attorney General’s Office (PGR) in the investigation of the so-called hidden debts, noting that due attention would be given to the case.

“We reiterate that the Government of the Republic of Mozambique will grant all institutional support to the PGR in the implementation of the recommendations contained in the independent international audit [on the hidden debts],” Filipe Nyusi said on Sunday on the occasion of National Independence Day.

The Mozambican head of state’s statement comes a day after the release by the PGR of the summary of the independent international audit report conducted by the North American consulting firm Kroll into debts of just over two billion dollars that the previous Mozambican government secretly endorsed between 2013 and 2014.

President Nyusi said the release of the summary report would help the country understand the process of operation and application of loan funds and would contribute to the continued strengthening of the control and management of public finances in Mozambique.

“We believe that the PGR will be able to follow up on the recommendations contained in the report within the framework of its powers and mandate,” the president said.

The Mozambican head of state said that the release of the summary of the audit results would encourage financial institutions and international donors to resume their aid to the country, suspended after the discovery of the debts in April last year.

“It is Mozambicans’ hope that, with the publication of the summary report of the independent debt audit, the international community will regain its confidence and support for our country,” President Nyusi said.

The audit of Mozambique’s hidden debts fails to clarify the fate of the two billion dollars contracted by three state-owned companies between 2013 and 2014, the PGR announced on Saturday.

“Gaps remain in the understanding as to exactly how US$2,000 million was spent, despite considerable efforts” to clarify the matter, according to the PGR’s statement on the investigation.

On the other hand, “the audit found that the process for the issuing of guarantees by the State appears to be inadequate, especially in relation to the evaluation studies that must be conducted before issuing them,” it adds.

The guarantees supporting loans contracted by companies Ematum, Proindicus and MAM were passed under the chairmanship of Armando Guebuza, without the knowledge of Parliament or international partners such as the International Monetary Fund.

The debt scandal broke in April 2016. Ematum’s US$850 million debt was already known, but not Proindicus’s US$622 million or MAM’s US$535 million. The revelations threw Mozambique into a crisis unprecedented in the last decades.

International partners suspended aid, the currency devalued steeply and inflation rose to 25 percent in 2016, making life in one of the poorest countries in the world even harder.

The resumption of international aid has been conditioned on the performance of an independent debt audit, the executive summary of which was distributed on Saturday by Mozambican Attorney General’s Office, and to which the reactions of support partners are now awaited.

Source: Lusa