MOZAMBICAN GOVT TO CONTINUE DEFAULTING ON ILLICIT LOANS, SAYS PM

MAPUTO, Mozambican Prime Minister Carlos Agostinho do Rosario has disclosed that while negotiations with the creditors involved are still underway, the government will not repay any of the debts arising from the illicit loans which three security-related companies took from the two European banks, Credit Suisse and VTB of Russia, in 2013 and 2014.

Answering questions from deputies in the Mozambican parliament, the Assembly of the Republic, here Wednesday, Rosario made it clear that the government would continue defaulting on these debts, which were illegally guaranteed by the previous government.

The loans to the three companies — Ematum (Mozambique Tuna Company), Proindicus and MAM (Mozambique Asset Management) — amounted to more than two billion US dollars. The banks lent this huge sum because the previous government under President Armando Guebuza guaranteed the loans in full.

These guarantees were illegal since they exceeded the ceiling on guarantees set in the 2013 and 2014 budget laws. They were also unconstitutional since a clause in the Mozambican Constitution established that only Parliament can authorise such debt.

Rosario told the deputies that the government is continuing to engage in dialogue with the creditors to guarantee that servicing the debt does not damage our work to make the government’s Five Year Programme operational.

The three companies are effectively bankrupt and cannot possibly pay off the debts. The government made it clear in 2016 that it cannot and will not pay, and urged the creditors to sit down with the government’s representatives and work out a debt rescheduling programme. The creditors have been reluctant to do so, with the result that the government has repeatedly defaulted on the debts.

Rosario said that while the government had been waiting for results from its talks with the creditors, and while the Attorney-General’s Office (PGR) had been investigating criminal aspects of the loans and their guarantees, no debt servicing charge at all had been paid.

Nor did the government intend to pay off any of the debt in 2018, Rosario said, adding that no debt servicing arising from the guarantees for the Ematum, Proindicus and MAM loans had been written into the 2018 State Budget which the Assembly will debate later this month.

Source: NAM NEWS NETWORK