Mozambique: Integrity Centre condemns inclusion of ‘hidden debts’ in State General Account

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Mozambique: Integrity Centre condemns inclusion of ‘hidden debts’ in State General Account

2:00 CAT | 03 May 2017

The Public Integrity Centre (CIP), a Mozambican non-governmental organisation, yesterday condemned the inclusion by the Assembly of the Republic of the value of state guarantees of the so-called hidden debts in the General State Account (CGE) of 2015, accusing the parliament of violating the Constitution.

“The CIP strongly disapproves of the inclusion of these guarantees in the CGE [Conta Geral do Estado / General State Account] without a clear statement of reasons. The question arises: why are debt guarantees taken in 2013 and 2014 included in the 2015 General State Account after the debt scandal in the international press,” the CIP asks in an analysis of the parliament’s decision.

With the approval of the 2015 CGE, the CIP proceeds, the guarantees issued for Mozambique Asset Management (MAM) and ProIndicus loans become legal, when these guarantees were issued in violation of the Constitution and budgetary laws.

“The Assembly of the Republic has just approved this violation and is also responsible for violating the constitution,” notes the CIP.

According to the CIP, the inclusion of illegal debts in the CGE in 2015 raises serious issues in terms of budgetary and even constitutional processes.

“The Assembly of the Republic, as a constitutional body independent from the executive, should act to restore the legality and demand the fulfilment of its deliberations, because the CPI [Parliamentary Commission of Inquiry] directed by Parliament has declared these debts illegal,” the CIP said.

The CIP directly accuses the Mozambican Liberation Front (Frelimo), saying that when approving the CGE, the parliamentary bench of the ruling party acted against the conclusions of the parliamentary commission.

Last week, the Mozambican parliament approved the CGE, which includes the “hidden debts,” with votes in favour of the ruling Frelimo party, and against the opposition of the MDM, in a session boycotted by Renamo, the main opposition party.

The state accounts mention the US$622 million loan (EUR 586 million) which ProIndicus contracted with Crédit Suisse and the Russian VTB bank between 2013 and 2014, and a US$535 million loan (EUR504 million) MAM contracted with the same financial institutions.

The two loans, raised by the State Information and Security Services (SISE) for maritime security activities, were contracted with the government’s approval, but kept secret from the Assembly of the Republic, international financial institutions and donors.

In 2012, the government also secretly guaranteed a debt of US$727.5 million (EUR 684.8 million) contracted by the Mozambican Tuna Company (Ematum). The Ematum debt was registered in the 2014 General State Account debated by parliament last year.

Source: Lusa