Mozambique: Government must “do everything” for country to be credible – Maleiane

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Mozambique: Government must “do everything” for country to be credible – Maleiane

3:03 CAT | 15 May 2020

Photo: Noticias

Minister of Economy and Finance of Mozambique Adriano Maleiane said yesterday that the Mozambican government must “do everything” in its power to regain the trust of creditors and international markets after the scandal of the ‘hidden debts’.

The executive has to “do everything so that Mozambique remains a country that the whole world believes in – a serious state, a compliant state”, Minister Maleiane said yesterday during the debate on the General State Account (CGE) of 2018.

Adriano Maleiane said that efforts to recover international credibility had paid off, as evidenced in October, when rating agency Fitch removed Mozambique from the list of countries in financial default and gave it a CCC rating – the third-worst level, but out of non-compliance.

Another sign that the country was regaining trust is the possibility of the International Monetary Fund (IMF) resuming its financial assistance programme.

The IMF suspended support to the country in 2016 due to the US$2.2 billion ‘hidden debt’ scandal, and because of suspicions of corruption in the case, which is currently under scrutiny by justice institutions in Mozambique and abroad.

More than the volume of aid, a new IMF financial programme would serve as an endorsement for Mozambique and open the door to additional support from other external partners.

In parliament this Thursday, the Minister of Economy and Finance stressed that the strategy required the restructuring of debts, and fighting in national and international justice forums for the cancellation of obligations considered illegal.

“Our justice is, out there and in here, dealing with this matter,” he declared.

The ‘hidden debts’ are related to loans taken between 2013 and 2014 from the British branches of investment banks Credit Suisse and VTB by Mozambican state-owned companies Proindicus, Ematum and MAM.

The loans were guaranteed by the Mozambican government of the time, but without the knowledge of parliament or the country’s Administrative Court oversight body.

On Tuesday, the Constitutional Council declared null and void acts relating to the loans taken out by the companies Proindicus and Mozambique Asset Management (MAM) and the sovereign guarantees granted by the government in 2013 and 2014, as it had a year before in relation to the Ematum loan.

The annulling of the Ematum loan in June 2019 did not prevent the government from renegotiating the repayment of Ematum’s ‘eurobonds’ with creditors, claiming that the position of the constitutional judges could be fulfilled by Mozambique seeking compensation from anyone found guilty by the courts.

In relation to the guarantees in favour of MAM and Proindicus, the government had already initiated court proceedings, still underway abroad, claiming their respective nullity.

Source: Lusa