GOVERNMENT CANNOT FORCE TREASURY DEBTORS TO PAY

The Mozambican government has no mechanism whereby it can force companies who owe money to the Treasury to pay up, claims Finance Minister Manuel Chang.Interviewed by the independent television station STV, Chang said that the government was only legally entitled to use coercion in collecting tax arrears – and non-performing treasury loans do not fall into that category.“Only fiscal debt can be collected coercively, not debts to the Treasury”, he said. “If somebody doesn’t pay taxes, the government has mechanisms for dealing with that. That’s different from this debt”.The treasury loans, he pointed out, did not come from the state budget, but was donor money chanelled to companies via the Treasury, a form of foreign aid that is no longer used. The loans date back to the year 2000 – a few have been paid off entirely, but there are still 26 on the books. Of these, 14 companies have paid off some of the debt, while the other 13 have paid nothing at all, and include some enterprises that are now defunct.The issue of the Treasury loans always comes up at this time of year, when the General State Accounts (CGE) are debated in the country’s parliament, the Assembly of the Republic. The opposition claims that the loans were just a way of financing companies owned by senior figures in the ruling Frelimo Party.And indeed some of them do have prominent Frelimo members among their shareholders, but many of them do not, and some are owned by the state.“That money didn’t come from the budget”, Chang stressed. “It was donor money, and if we hadn’t used it, the donors would have taken it back”.The fact that the government is not about to drag the shareholders through the courts did not mean it was giving up the money as lost, the minister added. He was sure that, in time, the money would eventually be recovered.“We have the case of companies which have gone bankrupt, but there exist legal means of recovering the value”, Chang said. “We have acquired a company, experienced in this area, which will help us with the debt recovery”.The government has offered incentives to debtors who pay up voluntarily and in full – they are being offered a discount of 9.95 per cent. Alternatively, the repayment period can be extended by a further six years, but in that case the debtor will be obliged to pay not merely the debt, but also compound interest.

Chang said some progress is being made. In 2010, the debtors repaid over 455.5 million meticais (about 16.4 million US dollars), compared with 253.6 million meticais repaid in 2009.