IMF WANTS FULL DISCLOSURE ON LOANS BY THREE STATE-OWNED MOZAMBICAN COMPANIES

MAPUTO, The International Monetary Fund (IMF) has politely made it clear that there will be no normalization of relations with Mozambique until information missing from the audit of three companies whose loans were not previously revealed to the IMF is provided.

In 2013-2014, the three companies borrowed more than two billion US dollars from Credit Suisse and VTB of Russia. The government of the day, headed by President Armando Guebuza, illicitly guaranteed the loans, in violation of both budget law and the Mozambican Constitution. These government guaranteed loans added 20 per cent to Mozambique’s foreign debt.

Initially, only the Ematum loan was in the public domain, since it took the form of a European bond issue. The Proindicus and MAM loans were kept secret, and only came to public knowledge in April 2016.

The IMF, accusing the government of misreporting its debt situation, suspended its programme with Mozambique, and other western donors and funding agencies followed suit. All 14 donors who used to provide direct support to the Mozambican State budget have since suspended their disbursements and have not resumed them.

The IMF made it clear that a basic condition for resuming normal relations with Mozambique was an independent audit of Ematum, Proindicus and MAM. The Attorney-General’s Office (PGR) hired Kroll Associates, reputedly the world’s foremost forensic audit company, to undertake the audit.

In late June, the PGR published the executive summary of the Krioll report, which accused the management of Ematum, Proindicus and MAM of failing to co-operate and concealing information. The man who is the chairperson of all three companies, Antonio do Rosario, a senior officer in the State Intelligence and Security Service (SISE), openly boasted of refusing to hand over data, on grounds of national security, and even of expelling the auditors from his office.

At a media briefing in Washington last Thursday, IMF spokesperson Gerry Rice confirming that filling in the gaps in the Kroll audit report would be a crucial step towards a new IMF programme for Mozambique. He said the IMF was encouraged by the fact that the audit had taken place because transparency and good governance are key but added that the IMF now wanted to see the full audit report, and not just the summary, published.

Source: NAM NEWS NETWORK