22 February 2018

Mozambique Falls On Corruption Index

Photo: Transparency International
Transparency International website

Maputo — Mozambique has become notably more corrupt in recent years, according to the Corruptions Perception Index published by the leading NGO fighting against corruption, Transparency International (TI).

TI gives each country in its index a score ranging from zero (totally corrupt) to 100 (absolutely clean). Mozambique's score fell from 31 in 2015, to 27 in 2016, to 25 in the 2017 index, which was released in Maputo by TI's Mozambique chapter, the Centre for Public Integrity (CIP), on Thursday.

Falling by six points in just two years is a sharp drop. In terms of ranking, Mozambique is in 153rd position out of 180 countries. In 2016 it was in 144th position out of 177 countries, and in 2015 it was 112th out of 168 countries.

The fall between 2015 and 2017, is the first sharp decline in Mozambique's position since the index was created in 1995, CIP spokesperson Baltazar Fael told reporters. He had no doubt that the main cause for the decline was the failure of the Mozambican authorities to bring to justice anyone connected with the illicit debts incurred by the security-related companies Ematum (Mozambique Tuna Company), Proindicus and MAM (Mozambique Asset Management) in 2013 and 2014.

These companies obtained loans of over two billion US dollars from the European banks Credit Suisse and VTB of Russia. The loans were only possible because they were illegally guaranteed by the Mozambican government of the time, headed by President Armando Guebuza. The government guarantees smashed through the ceilings on guarantees laid down by the 2013 and 2014 budget laws, and also violated the Constitution which establishes that only the country's parliament, the Assembly of the Republic, can authorise such debt.

When the scale of these illicit loans became clear, in April 2016, the International Monetary Fund (IMF) suspended its programme with Mozambique, and all 14 donors who had supported the Mozambican state budget halted their disbursements.

An audit of the three companies was held by the company Kroll Associates, widely regarded as the world's top forensic auditor, which found that much of the money could not be accounted for, and there were large gaps in the information provided by the three companies. Indeed, the man who is chairman of the board of all three companies, Antonio do Rosario, boasted that he had refused to provide information, in the name of “national security”, and had even thrown the Kroll auditors out of his office.

To all intents and purposes, the three companies are now bankrupt, and are quite unable to repay the loans.

CIP notes that the current government, under President Filipe Nyusi, has been unable to explain the loans and guarantees. Despite investigations by the Attorney-General's Office (PGR), which began in 2015, so far no-one has been held criminally responsible for this scandal.

Indeed, in January the PGR appeared to pass the responsibility onto the Administrative Tribunal, the body that judges the legality of public expenditure. It said it had remitted to the Tribunal a denunciation of financial offences that may have been committed in contracting the loans.

CIP regarded this as an attempt to evade responsibility, since the law makes it clear that the PGR has full powers to investigate financial crimes.

“This incapacity of the public prosecutors to solve the case of the illegal debts throughout 2017 is one of the causes why Mozambique's position on the TI corruption index has fallen”, argued CIP.

Other notorious cases had also stagnated. From Brazilian prosecutors, we know that the Brazilian construction company Odebrecht paid a bribe of 900,000 US dollars to persons as yet unidentified in Mozambique (believed to be in connection with building the international airport in the northern city of Nacala). But nobody has yet been named in connection with this case, and the PGR has not explained what it is doing to bring those involved to justice.

Fael said that cases such as the illicit debts had overshadowed successful prosecutions of corruption, such as that of the former chairperson of the government's Agricultural Development Fund (FDA), Setina Titosse, jailed for 18 years for her part in the theft of 170 million meticais (about 5.6 million dollars at the exchange rate of the time) from FDA funds.

Fael noted that Nyusi has given clear signals in recent speeches, notably at the September Congress of the ruling Frelimo Party, of his intention to fight against corruption, but he believed this has yet to be followed up at other levels of government. “The Ministers have to do something, and not just repeat the President's speeches”, he said.

Fael also noted that in late 2017, the PGR complained that prosecutors have sent many corruption cases to the courts, but no date has yet been fixed for the trials. The courts, however, responded that they would not prioritise corruption cases over other crimes. Fael suggested that specific sections should be set up in the courts to handle corruption.

In comparison with the other members of the Southern African Development Community (SADC), Mozambique is doing badly, with only four of the 15 SADC members (Madagascar, Zimbabwe, Democratic Republic and Angola) scoring lower. The picture for all SADC countries is as follows:

Country Rank Score Botswana 37 61 Seychelles 36 60 Namibia 53 51 Mauritius 54 50 South Africa 71 43 Lesotho 74 42 Swaziland 85 39 Zambia 96 37 Tanzania 103 36 Malawi 122 31 Mozambique 153 25 Madagascar 155 24 Zimbabwe 157 22 DR Congo 161 21 Angola 167 19

The highest score on the index was allocated to New Zealand with 89, followed by Denmark on 88, and Norway and Finland on 85.

At the other end of the scale, the most corrupt country in the world, according to TI, is Somalia, with a score of 9. Behind it are South Sudan on 12 and Syria on 14.

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