Mozambique: Teachers accuse government of lying about overtime
Mozambique: Rosário offers no joy for creditors, announces Tunamar – AIM report
8:23 CAT | 12 Apr 2018
TVM
Mozambican Prime Minister Carlos Agostinho do Rosario on Thursday made it clear that the government has no intention of paying off the debts of the security related companies Ematum (Mozambique Tuna Company), Proindicus and MAM (Mozambique Asset Management) any time soon.
These three companies took out loans of slightly more than two million US dollars in 2013 and 2014 from the European banks Credit Suisse and VTB of Russia. The only reason the loans were granted was that the Mozambican government of the time, headed by President Armando Guebuza, illegally guaranteed them.
Those guarantees smashed through the ceiling on guarantees established by the 2013 and 2014 budget laws. They also violated a clause in the Mozambican constitution under which only the country’s parliament, the Assembly of the Republic, can authorise such debts.
Rosario, speaking in the Assembly at the end of a two day debate on the General State Account (CGE) for the 2016 financial year, declared “as we have stated on previous occasions, concerning the commercial debt contracted with state guarantees (i.e. the Ematum, Proindicus and MAM debts), we reiterate that while the legal procedures around this dossier are still ongoing in the institutions of justice, we have not been making any payments”.
The Attorney-General’s Office (PGR) has been investigated the three companies since 2015, and no end to these investigations is in sight. Hence any hopes the creditors may have of recovering their money in the near future look certain to be dashed.
Nonetheless, Rosario said “we have been maintaining a permanent dialogue with the creditors in order to improve trust in our country on the international financial markets. This dialogue is fundamental because it makes room for the private sector to mobilise resources on the foreign market, under favourable terms and conditions, to invest in structuring projects in our economy”.
Rosario said that the government “has agreed the restructuring of part of the bilateral debt with some countries to free resources to finance economic and social development projects”. He did not name the countries concerned, but they are believed to be India and China.
Two separate issues
On Wednesday opposition deputies had denounced the government for negotiating in London last month with the Ematum, Proindicus and MAM creditors. They argued that since the debts were illegal, the government should simply refuse to pay anything.
The Minister of Economy and Finance, Adriano Maleiane, rejected this strategy. He argued that there are two separate issues – how the rest of the world sees the debt incurred by the three companies, and how the matter is dealt with domestically.
“The world wants Mozambique to pay, and that’s why we say we haven’t got the money”, he said. “The internal matter is the investigation into how the debts were contracted”. He warned that, if Mozambique simply refused to negotiate, “the debt won’t disappear”.
Maleiane added that Mozambique has no problems with the great majority of its foreign debt. 83 per cent of the debt is to bilateral and multilateral creditors on favourable terms, and is causing no headache. The Ematum, Proindicus and MAM guarantees account for only 17 per cent of the total debt, but 41 per cent of the debt service.
“So we say to the creditors that now we cannot pay this”, said Maleiane. “But if the negotiations go well, Mozambique’s credit rating can improve”.
He denied an opposition claim that he was going to Washington this month to negotiate the debt with the International Monetary Fund (IMF). Mozambique is a full member of the IMF and the World Bank, and, as Finance Minister, Maleiane is the Mozambican governor on the IMF Board.
He will attend the regular spring meeting of the IMF and World Bank in Washington on 16-22 April. “These meetings will discuss development finance, international trade, and the global outlook”, Maleiane said. “These meetings do not discuss debts”.
If, as seems likely, the creditors do discuss Mozambique’s debts in Washington, that meeting will be on the sidelines, and will have nothing to do with the IMF.
Tunamar
One surprise in Rosario’s closing speech was an announcement that the government is restructuring Ematum, by setting up a new company, Tunamar, which will be a partnership between Ematum and the United States Frontier Service Group (FSG).
Erik Prince to partner with Mozambique hidden-debt companies – Bloomberg
Watch: U.S. businessman may invest in Ematum – AIM report
US businessman Erik Prince, chairperson of FSG, visited Maputo in December and pledged to invest in Ematum. He said that FSG would work with Ematum “in training operations and changes in logistics so that we link Mozambique to the international fisheries market”.
The largest shareholder in FSG is the Citic Group, an investment fund owned and controlled by the Chinese government.
Prince is a founder of the US security company Blackwater (now known as Academi). Prince founded Blackwater in 1997 and was its chief Executive Office until 2010. It achieved notoriety in 2007 when a US court convicted four Blackwater employees of massacring 14 Iraqi civilians in Nisour Square, Baghdad.
Prince is a strong supporter of US President Donald Trump, and is the brother of Trump’s Secretary of Education, Betsy DeVos.
Rosario gave no details of the FSG/Ematum deal, but was confident that the partnership would allow all the Ematum fishing boats to become operational this year.
Ematum has a fleet of 24 fishing boats (21 longliners and three trawlers), but the audit undertaken by the company Kroll Associates last year found “none of the assets are fully operational for several reasons, including a lack of trained crew, and the limitation on available working capital”.
As a result Ematum has done hardly any fishing, and has struggled to pay wages to its workers.
Clearly Tunamar will need a sizeable injection of capital from FSG if the Ematum boats are to be put into working order, fully crewed and equipped. From the Mozambican point of view, the deal will only be worth anything if Tunamar becomes a viable concern and can pay off the Ematum debt of 850 million dollars.
Ematum fails to pay its workers – AIM report
More complex links of Prince and Ematum – By Joseph Hanlon
New China link to Ematum – Hanlon
Source: AIM/TVM
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