Nyusi demands that district debts are repaid

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Nyusi demands that district debts are repaid

10:03 CAT | 24 Apr 2017

File photo / Filipe Nyusi

Mozambican President Filipe Nyusi on Saturday warned that people who fail to repay loans from the District Development Fund (FDD) will be punished.

The FDD is an initiative set up in 2006 by Nyusi’s predecessor, Armando Guebuza. Initially it took the form of an allocation of seven million meticais to each district (about 108,000 US dollars, at current exchange rate, but worth much more ten years ago). The money was to be lent to people with viable projects that could boost food security, create jobs or raise income.

The methodology has changed over the years, with the amount of money allocated now depending on such factors as the size and population of the district – but the FDD is still known colloquially as “the seven million”.

The idea was that this would be a revolving fund: the beneficiaries would repay the loans, and the money would then be lent out again. It has not worked out this way, because the vast majority of borrowers, even with interest rates so low as to be symbolic, have not repaid anything at all, thus treating the FDD as a source of grants, not loans. Repeatedly, the Mozambican media has reported on districts where the rate of repayment is ten per cent or less.

Speaking in the district of Boane, some 30 kilometres west of Maputo, Nyusi expressed his anger at the failure to repay and accused the district consultative councils, who are in charge of the loans, of mismanagement.

The consultative councils “are not collecting the seven million”, he said. “They are bad managers. They hand over money and then don’t collect it. This is irresponsible”.

Nyusi added that Maputo province was “the champion of dishonesty”, noting that there were cases where the money for an entire year was allocated to just a single beneficiary. This was creating discontent among the local population who knew that money had been distributed to some applicants, but not others.

“We are not opposed to those who have received money from the fund. But we are sad when the money is not returned”, he said.
If the situation continues, dishonest borrowers could be penalised, he warned. Such threats, however, have been made in the past, yet there is still no record of any FDD debtors being hauled before the courts.

When coercive measures are taken to recover the debts, “don’t say the President doesn’t like us”, added Nyusi.

Source: AIM