MAPUTO– Mozambican Prime Minister Carlos Agostinho do Rosario has assured the parliament, the Assembly of the Republic, that the government remains completely willing to co-operate and support the bodies of the administration of justice in their investigations into what have become known as the hidden debts.

This refers to the loans of over two billion US dollars which three State-owned companies — Ematum (Mozambique Tuna Company), Proindicus and MAM (Mozambique Assets Management) — contracted with the banks Credit Suisse and VTB of Russia in 2013/2014. The loans were only possible because the previous government, headed by President Armando Guebuza) issued un authorised guarantees.

The guarantees smashed through the ceiling laid down by the 2013 and 2014 budget laws on the amount of guarantees that the government can issue. They also violated the Constitution which states that only the Assembly can authorise such debts.

Rosario told the Assembly Wednesday: We must continue to put our trust in our justice institutions and await the outcome of this process.”

However, the Attorney-General’s Office has been investigating the illicit loans since 2015, but so far not a single person has been charged with any crime.

Rosario said the government’s strategy is to bring the country’s public debt to within sustainable parameters”, which involves restructuring it so as to free resources to finance priority actions in the Government’s Five-Year Development Programme.

“We have been maintaining a permanent dialogue with our partners and the creditors. The dialogue with creditors also seeks to establish a favourable environment so that our country gains access to financial resources on the international market on favourable terms and conditions.

Economy and Finance Minister Adriano Maleiane put the country’s total foreign debt, as at Dec 31, 2017, at 10.6 billion US dollars, of which 4.2 billion USD is multilateral debt (owed to institutions such as the World Bank and the African Development Ban), and 4.6 billion USD is bilateral debt owed to a variety of creditor countries.

The rest is commercial debt, of which the largest portion is the 1.8 billion USD remaining of the Ematum, Proindicus ad MAM debts. The commercial debt carries much higher interest rates and shorter repayment periods than the bilateral and multilateral debts.

In 2017, Maleiane said, Mozambique only paid the debt service on the multilateral and bilateral debts. It has not paid anything at all on servicing the commercial debt since early2016. We are in negotiations over these debts,” the Minister said.