Mozambique economy set to bounce back in 2020 – IMF
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The Mozambican government will resort to experts in constitutional and international law to interpret the implications of the Constitutional Council ruling considering null and void the loan and sovereign guarantees granted by the Mozambican state to the Ematum company, an official source said on Tuesday
“At the moment, we need expert advice on constitutional and international law to see the implications of this, in order to avoid solving the problem internally, but out there the country will remain in an unsustainable situation,” Economy and Finance Minister Adriano Maleiane said on the sidelines of Independence Day celebrations in Mozambique yesterday.
At stake is the decision of the Mozambican Constitutional Council to declare null and void loans and guarantees granted by the state worth US$ 726.5 million (EUR646.7 million) to the state-owned Ematum.
According to Mozambique’s Economy and Finance minister, the government is not “doing more” in the negotiations with creditors “due to the ruling of the Constitutional Council”. Minister Maleiane pointed out that one of the executive’s chief objectives is to ensure that the state moves out of default in the international market.
“The international financial market has its rules of operation and we also have to make sure that the Mozambican state does not get in a difficult situation,” he said.
In a ruling dated June 3, following the process opened by the Budget Monitoring Forum (FMO), a civil society organisation platform with 2,000 subscribers, the judges declared “the nullity of the acts inherent to the loan contracted by Ematum and the respective sovereign guarantee granted by the Government in 2013, with all legal consequences”.
The Constitutional Council decreed that the Mozambican executive had acted in “usurpation of power” and practised null acts by ignoring the laws, since it is the responsibility of parliament to authorise credit operations or the issue of sureties.
The decision came four days after the government had announced the start of renegotiations with creditors.
In 2013, Ematum contracted a US$850 million loan through the issuance of bonds (‘eurobonds’) by Credit Suisse for the import of vessels, fishing equipment and coastal protection, without authorisation in the State Budget.
Mozambican civil society has submitted another document to the Constitutional Council requiring the invalidation of loans to maritime security companies ProIndicus and MAM which make up 60% of the hidden debts totalling about US$2.2 billion.Source: Lusa
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