Mozambique: Parliamentarians Criticise Secret Debt Lenders

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London — A hundred Members of the British Parliament have signed an Early Day Motion expressing their concern at the secret loans given by London-based banks in 2013 to Mozambique.

These are the loans of over two billion US dollars organised by the London offices of Credit Suisse and the Russian bank VTB in 2013 and 2014 for the three security-related companies Ematum (Mozambique Tuna Company), Proindicus and MAM (Mozambique Asset Management.

The loans were granted without any due diligence to companies with no track record of any kind, dominated by the Mozambican State Intelligence and Security Service (SISE). The loans were only possible because of illegal guarantees given by the Mozambican government of the time, headed by President Armando Guebuza. These guarantees smashed through the ceiling on loan guarantees established by the budget laws for 2013 and 2014, and were issued without the approval of the Mozambican parliament, the Assembly of the Republic.

The Early Day Motion was tabled by the Chair of the All Party Parliamentary Group on Mozambique, Roger Godsiff, an MP from the opposition Labour Party.

An Early Day Motion is tabled by MPs demanding debate on the issue in question “on an early day”. In practice, they are rarely debated in the House of Commons and their main purpose is to draw attention to particular subjects of interest.

The motioin points out that over ninety per cent of sub-Saharan Africa government international bonds are owed under UK law, and calls for measures to ensure that all such loans are disclosed publicly at the time they are made and comply with the law of the country concerned. It also calls for enhancements to the Debt Relief (Developing Countries) Act 2010 to ensure that vulture funds cannot ignore agreed debt restructuring in pursuit of large profits in Britain.

The motion coincides with a visit to London by Mozambique's Minister of Economy and Finance, Adriano Maleiane, to meet with private creditors to discuss debt restructuring proposals.

According to the Director of the Jubilee Debt Campaign, Sarah-Jayne Clifton, “the lenders and government officials behind these outrageous deals need to be held to account for their actions. The people of Mozambique should not have to pay one cent on these secret debts. Any creditors who feels misled should seek recompense from the banks which arranged the secret loans, Credit Suisse and VTB, and from any individuals who may have profited from the deals.”

Roger Godsiff remarked that “it is very concerning that loans were given without the proper parliamentary oversight in Mozambique. In the UK we need to recognize our role in this scandal. The Financial Conduct Authority (the British financial regulatory body) must use all means at its disposal to hold the London-based banks to account. And we need new measures to ensure all loans to governments given by UK-based financial institutions, or loans given under UK law, are publicly disclosed”.

The Jubilee Debt Campaign pointed out that “the loans were guaranteed by then Mozambican Finance Minister Manuel Chang, but were not approved by the Mozambique parliament, despite this being a requirement of the Mozambique constitution”.

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