Mozambique orders ten more locomotives from India
The Mozambican government yesterday acknowledged the existence of US$1.4 billion (EUR 1.25 billion, justifying the non-disclosure on security of strategic infrastructure grounds.
Speaking to the press, Council of Ministers spokesman Mouzinho Saide confirmed the existence of government guarantees for a 2013 loan of US$622 million (EUR 553 million) to Proindicus, a US$535 million (EUR 476 million) loan to Mozambique Asset Management the following year, and a third loan involving the Interior Ministry.
This third instance is a bilateral US$221 million (EUR 196 million) credit in favour of the Interior Ministry spanning the years 2009 to 2014, Saide revealed, without giving further details.
Saide justified the loan to Proindicus as necessary for the acquisition of military equipment to ensure the integrity of ‘exclusive economic zones’.
“In the context in which the company was established, the country was facing security threats from piracy, illegal immigration, drug trafficking and illegal fishing,” Saide said, adding that it was also necessary to ensure the security of oil and gas companies operating in Mozambique.
Proindicus therefore acquired maritime patrol aircraft, naval vessels and radars spread along the country’s coastline .
As regards the debt incurred in favour of Mozambique Asset Management, Saide said the company was established to operate naval installations and provide support services to government vessels and commercial oil industry ships.
“The scope of the [Mozambique Asset Management] project includes the delivery of a mobile site specialized in the maintenance of assets located at different points, as well as the continuous training of Mozambicans,” he explained.
In early April, the Wall Street Journal reported a state-guaranteed loan of US$622 million to the state company Proindicus, contracted in 2013 through the Credit Suisse and Russian VTB banks, which was not reported in public accounts.
As a result of these revelations, the IMF cancelled a visit to Mozambique scheduled for the following week, and suspended the disbursement of the second tranche of a loan to the government.
On 19 April, the Financial Times reported that the government of Mozambique had approved another loan of more than US$500 million to another company.
On the same day, the Mozambican prime minister met the director general of the IMF, Christine Lagarde, and, according to a statement from the financial institution, recognized the existence of more than one billion US dollars-worth of external debt of Mozambique that had not been reported.
Many Mozambican organizations have since expressed their indignation about the impact of hidden loans in government debt, demanding explanations from the government and a criminal investigation.
According to a confidential prospectus prepared by the Ministry of Finance of Mozambique and delivered last month to investors in bonds of the Mozambican Tuna company (Ematum), the volume of public debt of Mozambique increased from 42 percent of GDP in 2012 to 73.4 percent in 2015.
Ematum was the first known case of a loan (US$850 million) guaranteed by the government without being registered in the state accounts. The amount has since entered the public debt of Mozambique and Ematum obligations were exchanged for Mozambican sovereign debt in March.
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