Paying for illegal public debts is unacceptable – Mozambican civil society

illegal public debts

Mozambican civil society organizations have come out against the country repaying illegally contracted public debt, demanding that the authors of the loans contracted without parliamentary or international financial institution knowledge be held responsible.

“We Mozambican citizens, gathered in civil society organizations, members of the Budget Monitoring Forum (FMO), the Mozambican Debt Group (GMD) and Coalition for Fiscal Transparency and Justice (CTJF) refuse to pay the debts of private companies illegally guaranteed by the government of Mozambique,” a statement sent to Lusa reads.

The statement, timed to coincide with the government going to parliament today to clarify undisclosed debts which the signatories describe as unconstitutional, refers to government-guaranteed Ematum debts of US$850 million, ProIndicus (US$622 million) and Mozambique Asset Management (US$535 million).

“In addition to being unconstitutional, the three debts mentioned were illegal because they were not included in the State Budget of the respective financial years,” the statement reads.

The three organizations are demanding that the entities which authorized operations and processes which egregiously violated the Budget Law and the Constitution of the Republic of Mozambique be held criminally and administratively liable.

The government must submit and publish detailed austerity measures designed to address the current crisis, with clear indications of the amounts to be saved and the sectors to be affected, without sacrificing the social sectors and without harm to the poorest citizens.

The three organizations also require that Mozambicans be fully informed of the real implications of the country’s indebtedness and its implications for citizens’ pockets.

The Mozambican government in April acknowledged the existence of a previously undisclosed debts of US$1.4 billion (EUR 1.25 billion), which it justified on national security grounds [to strategic infrastructure in the country], which led  the International Monetary Fund to suspend the second installment of a pre-agreed loan to Mozambique and cancel a mission to Maputo.

The G14 group of state budget donors also suspended its payments, followed by the US, which announced this week that it would review its bilateral support to the country.

Including the recently disclosed loans, Mozambique’s public debt now stands at US$11.66 billion (EUR10.1 billion), of which US$9,890 million (EUR8.6 billion) is external.

This represents over 70 percent of gross domestic product (GDP), up from 2012 figures of 42 percent.
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