11 October 2016

Mozambique: How Close are Govt and IMF on the Audit?

Photo: Kevin Gabbert//Wikpedia
Maputo

Mozambique appears to have accepted that it will get no money from the IMF until an acceptable audit of the secret debt is under way, and the financial gap will have to be filled by sales of gas and other assets. But the government and IMF may be closer than is realised on the question of how to do an independent external audit.

"The President did not say that the audit will be done under the command of the PRG [Attorney Genera's office, Procuradoria Geral da Republica de Mocambique]; what he asked is that it be done within [national] institutions. The team sent by the IMF would not work at the Hotel Polana but instead work at the Ministry of Economy and Finance," explained de Sousa in his Publico interview. "It continues to be external, as the IMF intends. What is the difference between making the audit in the Polana Hotel or at the offices of the PGR? The technicians are the same, the terms of reference of the audit will be by mutual agreement. If so, Mozambicans involved will learn. Making the audit in the Polana. no one learns; doing it in London, all we will receive is 500 pages of paper, while the rest stays there. It seems to me fair and sensible. … Another advantage of having the audit inside the PGR is that if there are criminal matters, action can be taken right there in the PGR."

In an 8 October press briefing IMF African Department Director Abebe Aemro Selassie said: "The good news here is that there’s a good agreement between the government [of Mozambique] and the IMF on some of the key prerequisites for the audit. That is that there will be an independent audit undertaken of the loans that have been taken up by state owned enterprises, and that this audit will be made public. Will be published. So I think this is a very good understanding. We are going to wait to see how that evolves in the coming months." And following the 15 September meeting in Washington between IMF Managing Director Christine Lagarde and President Filipe Nyusi, the IMF issued a Statement saying that "the Managing Director welcomed that the President indicated the Government of Mozambique’s willingness to work with the IMF on the terms-of-reference for this process - to be initiated by the office of the Attorney General - and to implement it."

Clearly there is much negotiation still to come as to how much power the PRG will have and how far the audit will go, but Mozambique seems to have won agreement to keep the audit within national institutions - and probably to be able to prevent prosecutions of senior people in Frelimo. In exchange, the Mozambicans appear to have accepted that it will be a long time before there will be any IMF money.

Finally, the US-trained economist de Sousa said that "it is not for the IMF to give me lessons. I studied at the same school."

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