Mozambique: Conspicuous monuments to dreams of mineral wealth – Hanlon

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Mozambique: Conspicuous monuments to dreams of mineral wealth – Hanlon

4:47 CAT | 10 Jun 2016

O País / The new Bank of Mozambique building in Maputo

In early 2014, after the Ematum loan had already become public, the World Bank was still saying that anticipated gas and coal revenues should be used to “frontload public investments”, and Mozambique should increase spending on infrastructure, education and health. “Due to its considerable stock of natural-resource wealth and projected future revenue streams Mozambique will have access to debt-financing options which would not otherwise be available, including credit collateralized against future revenues, loans to finance the government’s equity stake in extractive industry projects or the use of public guarantees that will partially mortgage future income from extractive industries,” said the World Bank said in its 2014 report, “Generating Sustainable Wealth from Mozambique’s Natural Resource Boom”. () Mozambicans took that part of the advice, but ignored the part of the report that said such increased spending should be on “public goods and services that offer high returns” and “benefit future generations”.

The Maputo-KaTembe suspension bridge will be a dramatic landmark, but it comes with a high price tag – two loans from the Export-Import Bank of China totalling US$754 million. A more modest but totally adequate bridge could have been built for one-third of the cost.

Mhoje_bancomocmaputo_photo_jpg — The new headquarters of Mozambique’s Central bank rises behind the ruins of “Prédio Pott”, listed as Mozambican cultural heritage

And O Pais Monday (6 June) pointed to the “pharaonic” construction projects of the Bank of Mozambique – US$230 million for a new 30-storey headquarters in the baixa of Maputo, and US$47 mn for new office buildings in Nampula and Xai-Xai and expanding the ones in Chimoio and Beira. The new Maputo headquarters will consume more electricity than the entire city of Xai-Xai and required US$4 mn just for a new electricity line, O Pais says. Bank of Mozambique says that the current buildings, all inherited from the colonial Banco Nactional Ultramarino, are now inadequate.

Comment: Africa Confidential (13 May) says the Maputo headquarters was originally budgeted at US$90 mn, “with kickbacks and ‘commissions’ accounting for the cost inflation”. And commissions clearly play a part in wanting grander projects. But using the unimaginable amounts of money from the gas to build one the biggest bridges in Africa or the most dramatic building in Maputo must also play a role.

By: Joseph Hanlon

Source: News reports & clippings