Proindicus and MAM debts must enter state accounts – Maleiane

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Proindicus and MAM debts must enter state accounts – Maleiane

9:03 CAT | 10 Jun 2016

Despite attempts by the main opposition party, the rebel movement Renamo, to keep the debts of the companies Proindicus and MAM (Mozambique Asset Management) out of the General State Account (CGE), Finance Minister Adriano Maleiane has insisted that they ought to be included.

The previous government, under President Armando Guebuza, guaranteed the Proindicus and MAM debts to the tune of over 1.1 billion US dollars, but did not disclose them, either to the Mozambican public or to the country’s international partners.

Now Renamo wanted to exclude the debts from the state accounts altogether, on the grounds that this would be a step towards transforming company debt into sovereign debt.

But Maleiane, speaking on Thursday during the debate on the public debt in the Mozambican parliament, the Assembly of the Republic, pointed out that if the two debts are not included in the 2015 CGE, currently being drawn up, then they could not be investigated by the Administrative Tribunal, the body that judges the legality of public expenditure.

“It’s a question of legality”, insisted Maleiane. “The Administrative Tribunal can’t judge things that aren’t in the accounts”.

In order to prevent future debt problems, he added, the Ministry of Economy and Finance is setting up a Risk Management Office, and will have its own data base checked by independent assessors.

The data base must be properly managed, Maleiane stressed, to avoid situations where the government believes that a debt has been paid, but the creditors protest that it has not.

“To avoid mistakes in registering the debt, we shall have an independent auditor”, said Maleiane, “We have spoken with our partners about checking the data base. As Minister of Finance, I need to be sure that what we are contracting is written down”.

This seems to arise from the failure of the previous government to pass onto its successor all the information about the public debt. According to Prime Minister Carlos Agostinho do Rosario, the government that took office in January 2015 only became gradually aware of the true situation, particularly the Proindicus and MAM debts.

Maleiane said that one task of the new Risk Management Office would be to follow the performance of companies which had benefitted from loans with government guarantees, to assess whether they were capable of honouring their debts.

It is not yet clear whether Maleiane’s promise of an independent auditor will satisfy the demand from those donors who have suspended their financial aid to Mozambique for a full forensic audit of the debts.

Source: AIM