Mozambique: Donors still awaiting government’s explanation on Ematum

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Mozambique: Donors still awaiting government’s explanation on Ematum

12:53 CAT | 21 Apr 2016

Lusa / (From left to right) Prime minister Carlos Agostinho do Rosário, president of Mozambique Filipe Nyusi, minister of Economy and Finance Adriano Maleiane

While Prime Minister Agostinho do Rosario is in Washington providing information to the IMF, Mozambique’s donors are still waiting for an explanations from the Mozambican government about the discovery of new loans under the Ematum case.

“We are awaiting further information from the government regarding this issue,” Swedish Ambassador Irina Nyoni in Maputo told Lusa on possible implications for the support given by her country to Mozambique after the revelations of hidden loans in public accounts.

Sweden is one of the main donors of the G14 group of countries and institutions that finance the Mozambican state budget, and which have a payment schedule subject to conditions related to transparency and good governance under a memorandum signed with the Ministry of Economy and Finance.

Another donor, who asked not to be identified at this time, told Lusa yesterday that “the situation is very serious” and hopes that the Mozambican government behaves accordingly.

“We share the sentiment expressed by the IMF on the need for a full analysis of the public debt,” said the representative.

The international donor stressed that there are “basic principles” in the relationship with the Mozambican government, adding that the existence of undisclosed loans means that “it is not very easy [for donors] to justify the disbursement of support”.

Possible suspension of payments by July of around US$200 million will depend on the reaction of the Mozambican government, noted the donor, and how it will work to “rebuild the trust” of the international community.

“We are all waiting on news from Washington and the outcome of the talks with the IMF,” he said, further wishing that the government would be “speedy” in its explanations.

Soon after the Mozambican government carried out the successful restructuring of the US$850 million state-quarantined Ematum loan, the Wall Street Journal reported the existence of a second undisclosed US$622 million loan for military equipment to the Proindicus company.

On Tuesday, the Financial Times revealed that the Mozambique government had approved another loan of US$500 million dollars to a public company. On Friday, the IMF cancelled a planned visit to Maputo and suspended the payment of the second tranche of a loan.

In Washington, Mozambican Prime Minister Carlos Agostinho do Rosário has admitted to IMF director Christine Lagarde the existence of more than one billion US dollars-worth of foreign debt that Mozambique had not communicated to the body.

For the IMF, this was “an important first step”, to be followed by further information and documentation in order to “establish the facts and allow the Fund to make a full evaluation” and “identify steps to restore confidence”.

Another donor contacted by Lusa on Monday admitted that “the situation is serious,” but said he would not pass judgment on the Mozambican government without more information or anticipate the scale of any damage to the level of trust between international partners.

“It depends on how things will be managed by both parties,” he said.

In its only public reaction so far to the case, the G14 donor group, currently chaired by Portugal, said on April 6 that it had “only become aware of the situation via the media and is awaiting more information and details before saying anything”.

Source: Lusa