Mozambique: Debt Campaigners Say Mozambique ‘Should Not Pay a Penny’

Maputo The London-based Jubilee Debt Campaign has described as “scandalous” the failure of the British authorities to act against the London branches of the banks involved in Mozambique’s “hidden debts”.

Using illegal loan guarantees issued by the Mozambican government of the time, under the then President Armando Guebuza, three fraudulent, security related companies, Proindicus, Ematum (Mozambique Tuna Company) and MAM (Mozambique Asset Management) in 2013 and 2014 obtained loans of over two billion US dollars from the banks Credit Suisse and VTB of Russia. The loans were arranged through the London offices of these banks.

All three companies are now effectively bankrupt, and the creditors are using the guarantees issued under the Guebuza government, to claw the money back.

VTB has announced that it is suing MAM and the Mozambican government in London to retrieve the 535 million dollars it lent to MAM.

In response to this threat, Sarah-Jayne Clifton the director of the Jubilee Debt Campaign, cited by the Portuguese news agency Lusa, said it was scandalous that the British authorities had so far taken no action “against the banks behind these secret and odious loans”.

“The people of Mozambique should not pay a penny of this VTB loan to MAM”, Clifton said, pointing out that the loan guarantee was in clear violation of Mozambican law.

This is because the guarantees for the loans to the three companies smashed through the ceiling in guarantees established in the 2013 and 2014 budget law. The guarantees were also unconstitutional, since a clause in the constitution reserves to the Mozambican parliament, the Assembly of the Republic, the right to approve this type of potential debt.

“The lenders, the companies and the politicians involved should all be held to account for their role in the deal”, added Clifton.

Both the VTB group and their London lawyers, Freshfield Brukhause Deringer, are refusing to make any comment on the London lawsuit.

Source: Agencia de Informacao de Mocambique