Several significant Mozambican civil society bodies have declared that it is “unacceptable to pay illegal debts” – referring to the loans contracted by the companies EMATUM (Mozambique Tuna Company), Proindicus and MAM (Mozambique Asset Management).
The Budget Monitoring Forum (FMB), the Mozambique Debt Group (GMD) and the Transparency and Fiscal Justice Coalition (CTJF) issued a joint statement that “we Mozambican citizens refuse to pay the debts of private companies illegally guaranteed by the government”.
The three companies are technically private, but they are 100 per cent owned by state bodies. The previous government, under President Armando Guebuza, issued guarantees in 2013-14 for loans of 850 million, 622 million and 535 million dollars incurred by EMATUM, Proindicus and MAM respectively. The civil society bodies argue that these debts are unconstitutional, since they were not submitted to the country’s parliament, the Assembly of the Republic for its assessment and approval.
The guarantees also exceeded the limit for guarantees laid down every year in the budget law. That limit was the equivalent of 6.2 million dollars in the 2013 budget and the equivalent of 515 million dollars in 2014. But the amount guaranteed was over two billion dollars.
The statement from the three bodies demanded that the government publish all information on the public debt, online and in the Mozambican media, so that all citizens will be fully informed. Such an explanation must also include the implications of the debt for the country, and for the pockets of individual citizens.
They also demanded public and detailed presentation of the austerity measures promised by the government with a clear indication of how much money will be saved. Such measures “must not sacrifice the social sectors or damage the poorest citizens”.
The urged the country’s parliament, the Assembly of the Republic, to prevent the Proindicus and MAM debts from being converted into sovereign debts (as has already happened with the EMATUM debt). The civil society bodies also called for a parliamentary inquiry – a demand which the Assembly met on Thursday with a unanimous decision that a parliamentary commission of inquiry will be set up.
The statement calls on the Administrative Tribunal, the body that oversees public expenditure, to undertake an exhaustive forensic audit of the public debt, and to ensure that those who benefitted unduly from the illegal debts repay the money. The civil society bodies also want those who authorized illegal debts to face criminal proceedings.
“We reiterate our willingness to strengthen the rule of law and to defend the public interest by refusing to pay debts contracted with state guarantees obtained in an unconstitutional and illegal manner”, the statement concludes.
On Wednesday the British High Commissioner Joanna Kuenssberg called for an international judicial audit of the EMATUM, Proindicus and MAM loans. She told a press conference, held during celebrations of the official birthday of Queen Elizabeth II, that “an international forensic audit would be a means of rapidly clearing up this case”.
Britain is one of the 14 donors and funding agencies which used to provide direct support to the Mozambican budget, but which suspended that support after the scandal of the undisclosed loans broke in April.
“The situation is very serious and is shaking the country’s economy”, said Kuenssberg, adding that British ministers are “very sensitive” to the latest news about Mozambique’s debts.
The Mozambican government, she added, needed to regain rapidly the trust of the public and of its international partners.
Britain, she said, was waiting for proposals from the Mozambican government before resuming general budget support – but that decision would only be taken after a discussion amongst all 14 members of the budget support group (known as the Programme Aid Partners).
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