Mozambique: Restructuring state companies increases dividends by 9%
Photo: DW
Mozambique’s hidden debts will continue to have a negative effect next year if the perpetrators are not held accountable, the Mozambican Debt Group (GMD) says, and it expects the government to adopt a firmer position.
The Mozambican Debt Group says loans contracted without the knowledge of parliament between 2013 and 2014 have put the country in a financial collapse which is negatively impacting key sectors such as education and health. These hidden debts will continue to stifle Mozambicans in 2019, if the perpetrators are not held responsible, the organisation warns.
The GMD’s Humberto Zaqueu says that the government has only one option if it wants to regain creditor confidence and relaunch the country on a growth path. “It has to implement the audit recommendations in a clear, responsible and definitive way, which means, in a nutshell, holding the transgressors accountable.”
The GMD also points out that state institutions in Mozambique should play an active role in ensuring that state debt no longer plagues Mozambicans in general. Zaqueu recommends that the Administrative Tribunal and the Assembly of the Republic carry out monitoring and oversight of government actions, “in order to restore the confidence of the international partners, recapture investments and, above all, minimise the fiscal risk that is rising day by day”.
Is Debt forgiveness possible?
Mozambique has already benefited from the Heavily Indebted Poor Countries (HIPC) Initiative in the 1990s. Nevertheless, since 2015, the country is back in deadlock.
Zaqueu says Mozambique missed the opportunity to be on the list of countries that could see their debts forgiven, but there is still hope. “There is already this [IMF] openness, and what is missing from our side is the commitment in terms of accountability as a starting point.”
Once the path is reopened, Zaqueu says, it would be necessary to “take advantage of this open window” and, together with partners, find possible solutions. “Mozambique, because it is rich in natural resources, would maybe have a second window of opportunity for a third HIPC for the country,” he says.
In an evaluation of the more-than US$2 billion impact of debt, GMD director Eufrigínia dos Reis points out that the budget deficit has increased still further, which “reduces foreign reserves and accelerates the depreciation of the national currency”.
Rising cost of living
Also, because of the increase in the deficit, “the government has scrapped subsidies on fuel and wheat, increases living costs for the poorest people still further,” dos Reis says.
Researcher and journalist Borges Nhamirre of the Mozambican Public Integrity Centre (CIP) points out that Mozambicans are suffering from rising prices, especially in the energy sector.
“I do not think there is a family that is not complaining about the rise in the electricity tariff, but there has been no debate to explain the reason to the people,” he says. “Before, 100 meticais [about EUR 1.4] would buy you 31 kilowatts, but today it will buy less than eight.”
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