Investec Asset Management CEO Hendrik du Toit warned yesterday that the concealment of debts by Mozambique “cannot be repeated”, but admitted that investors “have not asked the tough questions”.
Speaking at the World Economic Forum on Africa in the Rwandan capital, Hendrik du Toit said: “The debt problem in Mozambique can not be repeated.”
According to financial news agency Bloomberg, du Toit stressed that it is necessary to highlight stories that create confidence in African financial markets, explaining that “this creates confidence for a securities market in local currency, but that is not what happened in Mozambique recently”.
For Investec, which also has a stake in Mozambican transport company J & J, the responsibility for the hidden debt does not lie uniquely with the government of Mozambique.
“Investors were not sufficiently intrusive, and did not ask the tough questions about Mozambique,” he said, referring to the controversy that has emerged in recent months over Mozambique’s public accounts’ failure to acknowledge loans contracted in 2013 by pubic companies Proindicus and Mozambique Asset Management amounting to US$622 and US$535 million respectively.
In addition to the cost of servicing this debt in the coming years, which Moody’s estimates at US$250 million a year, the government also recognized the existence of bilateral debt contracted between 2009 and 2014 of US$ 221.1 million, “in the framework of strengthening the capacity to ensure public order and security”.
In total, debts totalling about US$1.4 billion were not included in the public accounts, leading to a decline in the country’s agency rating and causing the International Monetary Fund to suspend an expected visit to Maputo and the disbursement of the second tranche of a loan, a move followed by the World Bank and international donors, including the United States.
Who is Hendrik du Toit?
Mr. Hendrik Jacobus du Toit is the Founder, Chief Executive Officer, and Director of Investec Asset Management Limited. Mr. du Toit serves as the Chief Executive Officer of Investec Asset Management and Executive Director of Investec Limited and Investec plc. He also serves as the Chief Executive Officer at Investec Asset Management (South Africa) Limited. Mr. du Toit joined the Investec Group in 1991 as a Portfolio Manager and Founding Member and was appointed the Managing
Source: Lusa / Bloomberg
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