Thursday, June 18, 2015


Resultado de imagem para venancio mondlaneA senior figure in the opposition Mozambique Democratic Movement (MDM) on Wednesday called for the arrest of former President Armando Guebuza, in connection with the government guarantees for the 2013 eurobond loan of 850 million US dollars for the Mozambique Tuna Company (EMATUM).Venancio Mondlane, the MDM candidate for Mayor of Maputo in the 2013 municipal elections, and now a prominent figure in the MDM parliamentary group, claimed that the EMATUM loan represented 53 per cent Mozambique’s public debt to international financial markets.Speaking in the debate on the General State Account for 2013 in the Mozambican parliament, the Assembly of the Republic, Mondlane declared repeatedly “somebody must be arrested for this”. 
Ematum3Towards the end of his speech he made clear who he had in mind. He wanted prosecutors to arrest Guebuza, and he wanted the Assembly to lift the parliamentary immunity of former Finance Minister Manuel Chang (who is currently a deputy for the ruling Frelimo Party).Mondlane regarded the EMATUM loan as “the greatest financial scandal since independence”. He accused the government of covering up the seriousness of Mozambique’s public debt, “sticking its head in the sand, just as an ostrich does when danger approaches”.Mondlane said that from 2009 to 2013, Mozambique’s foreign debt had increased by 60 per cent, and much of this leap was due to the EMATUM loan. Taking all the public debt together (domestic and foreign, bilateral and multilateral), Mondlane estimated that EMATUM was responsible for about a sixth of it.
Resultado de imagem para ematumEMATUM was set up, by three state institutions, in August 2013, and it immediately sought funds on the European bond market, in order to purchase 30 vessels from a French shipyard. In all, EMATUM issued loan certificates for 850 million US dollars.Initially, EMATUM mandated the banks Credit Suisse and BNP Paribas to manage the sale of bonds worth 500 million dollars. Credit Suisse provided a loan to EMATUM for this sum in order to issue the bonds. The bonds carried an interest rate of 8.5 per cent.
The bond issue was oversubscribed and so a second bond issue, managed by Russian bank VBL Capital, raised a further 350 million dollars for EMATUM. These loans were fully guaranteed by the Mozambican government, which must pay up in the event of EMATUM defaulting.Mondlane found the interest rate “astronomically high” and “comparable to an operation of criminal loansharking”. Furthermore, it was unclear what part of this loan was commercial and what was non-commercial.He noted that Guebuza had paid a personal visit in 2013 to the shipyard in Cherbourg where the EMATUM vessels were to be built, apparently putting his seal of approval on the deal. Of the 850 million dollars raised, only about 350 million dollars will pay for ships (24 fishing vessels and six naval patrol boats protecting the Mozambican coast and territorial waters). So “where are the other 500 million dollars?” Mondlane asked.Mondlane claimed it was most likely that the government was using this money to purchase military equipment. The real purpose of the EMATUM loan was “to make viable a warmongering project of the government”, he alleged. Mondlane offered no evidence for this sweeping claim, and the government, far from keeping quiet about it, has given a very different explanation.
Resultado de imagem para ematumWhen the then Fisheries Minister, Vitor Borges was explaining the deal to parliament in November 2013, he said the other 500 million dollars would be spent on radar equipment, satellite communications, onshore installations, transfer of technology, licence fees, training, and the running costs and payment of interest on the loan for the first year. But he gave no itemized breakdown of these costs.Mondlane was certainly right that EMATUM is in deep financial trouble. The EMATUM accounts, published in May, show that in 2014 the company made a loss of over 850.5 million meticais (about 24.9 million US dollars). The accumulated losses, from 2013 up to December 2014 were 1.17 billion meticais. EMATUM’s own funds were thus deeply in the red, at minus 1.16 billion meticais.This situation clearly worried the independent auditor, Ernst & Young Ltd. In its report, it pointed out that the continuity of EMATUM’s operations “is strongly dependent on a capital structure duly supported by the shareholders and/or by financial institutions, as well as on profitable operations in the future”.Mondlane claimed that the EMATUM catch would only bring in three million dollars a year, but the debt service is 24 million dollars a year and the first instalment falls due in September. The government’s estimate, however, is that when the EMATUM fleet is fully operational, it will bring in revenue of 200 million dollars a year.The initial fishing expeditions were with only nine boats, since the majority had not yet arrived from Cherbourg. EMATUM expects the level of catches to grow gradually through 2015 as more of the boats arrive.

Resultado de imagem para ematumNonetheless, Mondlane was convinced that the EMATUM loan involved criminal activity and declared “the time has come to end this interminable cycle of impunity, of stabbing the state and the public treasury in the back”.  So he proposed the “immediate preventive detention” of Guebuza, and the lifting of Chang’s parliamentary immunity “so that he can answer unreservedly to investigations to hold responsible those who have betrayed and sold the country to foreign banks”.Asked if this was an official MDM position, Mondlane told AIM it was his personal view. However, the spokesperson for the MDM parliamentary group, Fernando Bismarque, said it represented the position of the group.EMATUM was repeatedly mentioned in other speeches by opposition deputies as a reason for rejecting the 2013 state account. Since the government did not have to make any payments related to EMATUM in 2013, the company is not cited by name at all in the account.Frelimo deputies are also not pleased with the EMATUM situation. Pedro Cossa said there was no doubt about the need for a tuna fleet and for coastal protection vessels – but he cited the huge losses made by EMATUM, and hoped that the matter would be dealt with in full in the 2014 General State Account. He hoped that, when the 2015 EMATUM accounts are published, “they will be more encouraging”.

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