Public debt service triples in Q1

Between January and March this year, the Mozambican executive made payments amounting to some 4.7 billion meticais in public debt amortisation, against 1.4 billion meticais in the same period of 2018.

The Mozambican government paid more than three times as much in public debt repayments over the first three months of this year, making payments of around 4.7 billion meticais, according to the National Treasury Directorate (DNT). Of this amount, external debt amortisation (bilateral and multilateral) amounted to 2.9 billion meticais in the first quarter of 2019, against 1.3 billion meticais in the same quarter of the previous year. Domestic debt service, which includes Treasury Bonds, bank financing, restructuring and consolidation of the state’s business sector, amounted to approximately 1.8 billion meticais, against 88 million meticais paid in the first quarter of 2018. The National Treasury Directorate said that, besides the amounts related to Treasury Bonds, bank financing, restructuring and consolidation, an amount of 315.7 million meticais was also disbursed.This amount (315.7 million meticais) had been paid and settled in 2018, referring to the payment of the debts of the previous years with the suppliers of goods and services in the scope of the restructuring and fiscal consolidation.

Meanwhile, in the January to March 2019 period, new debt securities (treasury bills) were issued amounting to 18,039.7 million meticais, with amortisations totalling 18,124.2 million meticais. Concerning treasury bonds, the budget law set the limit of 19,447.31 million meticais for 2019 and, during the first quarter of this year, bonds amounting to 8,974.6 million meticais were issued, according to the National Treasury Department. Of this amount, 3,602.1 million meticais were for the securitisation of the debts to suppliers of goods and services amounting to more than 60 million meticais and 5,372.5 million meticais went to finance the state budget deficit. Throughout this operation, the final stock of domestic debt in the period under analysis amounted to 136,150.7 million meticais, against 139,377.2 million meticais at the end of the first quarter of 2018. As far as external debt is concerned, from January to March of fiscal year 2019, the government contracted two concessional loans, one with the International Development Fund of OPEC (OFID) and one with Eximbank of India, to a total US$50 million dollars. The OFID loan was US$ 12 million US dollars, with a maturity of 22 years and an interest rate of 1%. The money is set aside for the construction of the Angoche fishing port in Nampula. The Eximbank concessional loan of US$38 million, with a maturity of 25 years and a 1.5% interest rate, is intended to finance a water supply project in the rural areas of Manica, Sofala, Zambézia and Nampula. Under article 11 of Law 15/2018 of 20 December, the Mozambican government is authorised to issue guarantees and endorsements amounting to 151,250 million meticais, of which 136,125 million meticais to support state companies in the extractive industry and 15,125 million meticais for remaining state-sector companies, but no state guarantee was issued during the period under review.

“perplexed”

The former chairman of the Mozambican Bar Association (OAM) Gilberto Correia yesterday expressed “perplexity” over the decision by the South African Minister of Justice and Correctional Services to authorise the extradition of former Mozambican finance minister Manuel Chang.

 

“I am perplexed that the South African Minister of Justice has taken a decision of this magnitude while in a government only allowed to handle ‘current affairs’, which is waiting for the formation of a new government after the elections,” Gilberto Correia told Lusa.  Correia said he found it surprising that Michael Masutha had ordered the extradition of Manuel Chang when, as part of a government on its way out, he should be confining himself to routine actions, as it is not even known if he will be part of the executive resulting from the May 8 general election in South Africa. “For a minister, who we do not know will be reinstated or not, to take a decision of this magnitude seems surprising because, as part of an outgoing government, he should not make decisions of this magnitude, density and depth,” he insisted. The former chairman of the Bar Association said that Mozambican justice was discredited and was not equipped to prosecute white-collar crime of the magnitude of that attributed to Manuel Chang.

“We are all in Mozambique, we are Mozambicans, and in my private career I have been working for 23 years [with justice], so I know this machine, and I do not believe in it. This is not a discredit based purely on perception,” he said. Correia says that Mozambican justice’s interest in judging Manuel Chang and other figures implicated in the case of hidden debts may be more to do with electoral propaganda by the Mozambican Liberation Front (Frelimo), the ruling party. “Justice should not digress around elections or revenge. The fact that Mozambican justice is discredited and tries to gain credibility in electoral years is worrying,” Correia said.

The South African Minister of Justice and Correctional Services ruled on Tuesday that Manuel Chang should be extradited to Mozambique and not the United States, whose courts intended to try the former finance minister for his role in the so-called ‘hidden debts’ scandal. “I have decided that the accused, Mr. Manuel Chang, will be extradited to face trial for his alleged crimes in Mozambique,” Michael Masutha said in a statement released on Wednesday by the Ministry of Justice and Constitutional Development. Former Mozambican finance minister Manuel Chang, three former Credit Suisse bankers and a Privinvest mediator were arrested in December at the request of a US court, whose investigation alleges that the US$2.2 billion (EUR 2 billion) financing operation to create the Mozambican public enterprises Ematum, Proindicus and MAM during the term of President Armando Guebuza was a front for corruption and money laundering. In February, just after the US extradition request, several public figures were detained by Mozambican justice authorities – including people close to former Mozambican head of state Armando Guebuza – in a case which had been open since 2015 but had not previously resulted in any detentions.

Nyusi concerned northern armed violence could spread

Mozambique’s president, Filipe Nyusi, fears that the armed violence that has swept over the north of the country for the past year and a half could spread..

“We are striving to ensure that everyone collaborates to see if we can discover the reason [for the armed groups], because this could spread”, he told Canal de Moçambique newspaper in his first interview since coming to power five years ago. Armed groups allegedly originating in mosques have killed at least 150 people in the northern province of Cabo Delgado over the last 18 months. “They attack the villages and they use the young and captured people. A significant number are foreigners. They cross the border, they come here, but when they are captured they are returned to their countries,” President Nyusi said. “There are times when there is talk of Islamic connotations, but it’s better that this not be used as a mask.” The task, he added, was to establish “the ringleader behind all this, and what the motivation is”. At the same time, Nyusi said that there was collaboration with the multinational companies investing in natural gas in the province “to protect economic assets”. In the same interview, the president said there probably could not have been any more misfortunes in his term of office.

“I do not know if there are more misfortunes that could happen in this country than what happened to us in the last four and a half years,” he said.  In addition to the two violent cyclones that hit the country this year, there were the droughts in the south of the country, “the war that killed people” and “money that has not come in – we facing financial problems”.

Regarding the war, the guns were silenced by the ceasefire announced by Mozambican National Resistance (Renamo) guerrillas in December 2016. Filipe Nyusi reiterates that peace talks are slow and stalled over the names the opposition party has proposed regarding its disarmament and reintegration process.  To the point that Nyusi says he wonders if “Renamo wants to leave those people out there in the bush and take these people who are here in the city back [there]”.

“The impasse has nothing to do with the government. On the government side everything is easy,” he said, adding that the situation is “tiring” the mediators.

“Our foreign friends are already getting tired,” he said, a few days after he had asked Renamo to hand over its weapons before the general election scheduled for October 15.  Filipe Nyusi devoted much of the interview to appealing to the private sector to back agriculture and questioning how the time had been spent since independence.  “It’s true that it’s 40 years, but what kind of 40 years did Mozambique have? Forty years of fighting where one cannot maintain a thread of thought,” he said.