A 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”.
Towards 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.
EMATUM 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.
When 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.
Nonetheless, 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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