Mozambique: Government explanations will dictate donors’ reaction to Ematum case

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Mozambique: Government explanations will dictate donors’ reaction to Ematum case

2:26 CAT | 19 Apr 2016

Mozambique’s donors are waiting for detailed explanations of the Government on the new Ematum case of revelations before taking a position, but warn that “the situation is serious,” one of the international partners told Lusa.

“Donors will take a position according to what is said by the Mozambican government,” told Lusa on Monday the representative of one of the international partners of Mozambique, warning however that “the situation is serious and requires special care and effort of all people”.

The Mozambican government has set up a technical team to discuss in Washington with the IMF (International Monetary Fund) the revelation made by the Wall Street Journal in late March, that there is a second loan of US$622 million in favour of the Proindicus company, supposedly to acquire military equipment.

This new loan has come to light within the case of the Mozambican Company Tuna (Ematum). It was previously unknown and may possibly bring consequences to the country’s level of indebtedness.

The IMF cancelled on Friday a planned mission to Mozambique this week due to revelations of loans allegedly hidden in the context of the “Tuna Bonds” case , announced the director of the African Department, Antoinette Sayeh.

“The loan in question amounts to over 1$ billion dollars and considerably changes our assessment of Mozambique’s economic prospects ,” said Sayeh , speaking at the IMF headquarters in Washington.

Noting that one can not make judgements on the Mozambican government before there is more information and assuming that the executive himself was taken by surprise, the international partner contacted by Lusa also said that it was still early to draw conclusions about the damage done at the level of donor’s trust.

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

Besides the IMF, also the director of the World Bank to Mozambique has told Lusa that the revelation of a new loan under the Ematum case can increase the risk of excessive debt and affect the resources allocated by the institution to Mozambique in the future.

“It is important to remember that Mozambique is a beneficiary country of the International Development Association (IDA) and that the country has a moderate risk of over-indebtedness. Any potential analysis lowering debt stability may affect the overall amount of resources available for the coming years,” explained Mark Lundell.

Soon after the Mozambican government have carried out a successful restructuring of the so-called “tuna bonds”, which implied a guarantee granted by the executive in 2013 to a loan of US$850 million, the Wall Street Journal reported a week ago, the existence in this case of a second hidden loan, that investors in the Ematum debt securities repurchase operation were not informed about, worth US$622 million.

In the first reaction to the case, the Minister of Economy and Finance of Mozambique, Adriano Afonso Maleiane, denied the existence of hidden loans and said that “there was some confusion” in the financing of Ematum.

“There was some confusion and it ended up putting Mozambique in noise without any need. All that holds the State’s guarantee is guaranteed. We take over everything that had been taken over by the government. This is the tranquility that I continue to give investors”, Maleiane told Lusa on Friday during his passage through the spring meetings of the IMF and the World Bank.

Source: Lusa