Former Mozambican President Armando Guebuza on Monday testified before the parliamentary commission of inquiry set up to investigate the enormous government guaranteed loans granted by the European banks Credit Suisse and VTB of Russia to the quasi-public companies Ematum (Mozambique Tuna Company), Proindicus and MAM (Mozambique Assets Management).The loans date from 2013 and 2014, at the end of Guebuza’s second term of office as President. Taken together, the three loans amounted to over two billion US dollars (850 million for Ematum, 622 million for Proindicus, and 535 million for MAM).Because of the government guarantees, these loans added 20 per cent to Mozambique’s foreign debt.
The short repayment payment periods and the high interest rates the loans bear have thrust the Mozambican debt over the sustainability threshold, forcing the Ministry of Economy and Finance to inform creditors that, since the country cannot possibly meet the repayment schedule, these debts must be restructured.Under an agreement reached with the International Monetary Fund (IMF), Ematum, Proindicus and MAM are to be audited by the US company Kroll (the world’s foremost forensic audit experts) to find out what the money was spent on.Even before agreement was reached on the audit, the Attorney-General’s Office had begun investigating the three loans, and assistant Attorney-General Taibo Mocubora told reporters that signs of criminal behavior has been found.He gave no details, but this may refer to violations of the 2013 and 2014 budget laws. Every year the budget law contains a clause limiting the amount of loans that the government can guarantee. In the 2013 law that ceiling was the equivalent of 6.5 million dollars, and in 2014 it was raised to the equivalent of 515 million dollars. Cleary, guarantees for over two billion dollars are massive breaches of these ceilings.The commission of inquiry questioned Guebuza behind closed doors, and the former president did not speak to reporters. He met with the commission for about an hour.Guebuza arrived at the country’s parliament, the Assembly of the Republic, with the police escort to which he is entitled, as a former head of state. He was accompanied by several advisers, including former transport minister Gabriel Muthisse and a former chairperson of Mozambican public television (TVM), Armindo Chavana. Guebuza is the last person to give evidence to the commission, which has already questioned former finance minister, Manuel Chang, who signed the government guarantees for the loans. The Commission must now deliver its report to the Assembly, and the deadline for this is Wednesday. The Commission of Inquiry, chaired by Eneas Comiche, head of the Assembly’s Plan and Budget Commission. consists of 11 members, ten from the ruling Frelimo Party, and one from the opposition Mozambique Democratic Movement (MDM). The main opposition party, the rebel movement Renamo, is boycotting the Commission.Renamo said it would not join the commission unless it also contained non-parliamentary figures from civil society. Frelimo and the MDM believe that a parliamentary commission of inquiry must consist solely of parliamentary deputies, as specified in the Assembly’s own standing orders.The result of the Renamo boycott is that the MDM’s Venancio Mondlane is the sole opposition voice on the commission.