Credit Suisse and VTB share the responsibility for Mozambique's secret debt, President Filipe Nyusi told Chatham House in London on 17 April. It is a sharp change in the Mozambican position and, as often in Mozambique, a policy change was first announced outside the country. Until now, campaigners had held the banks liable for the debt, but the government had declined to do so.
Nyusi said: "Mozambique took the money from somewhere, and on that side there was no perception that this was much too much money to give to a poor country, and [they acted as if] there are no rules. This responsibility must be shared. If not, we will sacrifice a people, arriving at the point where there are no drugs for TB and HIV-AIDS patients and where investments are blocked."
He went on to criticise the donors and the IMF, saying they are blocking the development of Mozambique and prejudicing the lives of people by withholding money because of the secret debt.
Chatham House (Royal Institute of International Affairs) has posted a video on https://www.chathamhouse.org/event/fostering-sustainable-peace-democracy-and-inclusive-development-mozambique and the debt discussion is at 1.21 hours, near the end of the question and answer.
Credit Suisse says Nyusi statement is 'caricature'
At Chatham House President Nyusi effectively accused Credit Suisse (CS) of "loan pushing" - of encouraging Mozambique to take loans it could not afford and did not need. But CS president Marcel Rohner denied there was "loan pushing" with respect to Mozambique and said that to blame CS in this way is a "caricature". He was responding to questions at the 27 April shareholder meeting in Zurich, where he said the bank has cooperated with Kroll and sent much material, and CS is open to suggestions of how to help Mocambique. He added that provisions for paying damages caused by the Mozambique hidden debt are included in provisions for payments for all penalties, punishments etc. the bank might have to pay in the near future (of which Mozambique is only a small part). The total amount of these provisions was $750 mn on 1 January 2018, a sharp reduction of provisions compared to $3,900 mn a year earlier.
No change on IMF hard line
The IMF continues to take a hard line, confirming that no programme is possible without more information on where they money from the $2 bn secret debt actually went. In a 21 April press conference, IMF African Director, Abebe Selassie, said that because Mozambique is "having difficulties servicing their debts", the IMF classifies it as "being in debt distress or that debt is not on a sustainable trajectory." Mozambique is "eligible for program discussions [but] there is no outstanding request for a program discussion right now. And what we have said in the past when the program was suspended was that we would need clarification on what happened." He continued that there must be "more transparency on what the resources that were borrowed [were used for] before we can proceed to a program engagement." http://www.imf.org/en/News/Articles/2018/04/21/tr042018-transcript-of-african-department-press-briefing?cid=em-COM-123-36949
Attorney-General blames lack of foreign help
Attorney-General Beatriz Buchili told parliament Wednesday and Thursday (25-26 April) that criminal investigations could only be continued, and questions about the use of secret debt money and over-invoicing could only be answered, with information from the authorities in the other countries involved, because the trail left by the $2 bn is all outside the country, in other jurisdictions. The loans came from foreign banks and the money had been sent to a foreign supplier, and any theft or diversion of funds “must have been practiced from those institutions." She said that information had been requested from seven countries, “and in two years only one has replied, in March 2018. The IMF (International Monetary Fund) knows about this, and once again we ask our partners to help obtain this information. We cannot conclude the investigations without this”. Some of those who refused to supply information are countries which cut off budget support because of the secret debt.
Buchili's comment is surprising, as the UK, at least, is known to have provided information last year in response to requests.
Last year Burchili promised to publish the Kroll audit by September, but has not done so. Her justification for not publishing is that it contains “information that is not yet conclusive which requires complementary follow-up, and also indications the publication of which may prejudice the investigations under way, and risk violating the constitutional principles of sub judice and the presumption of innocence”. The full report was leaked last year and is posted on http://bit.ly/Kroll-Moz-full
On 29 January Burchili announced that investigations into financial offences connected to the secret debt had been handed over the Administrative Tribunal (TA). She said this was required because the TA is the body that inspects the legality of public expenditure, and holds officials responsible for any financial infractions. But she did not explain the nine-month delay. Facts had come to light, she said, which indicated that financial offences had been committed. These included administrative crimes such as illegal government guarantees and the execution of contracts without prior approval of the TA. The selection of banks (Credit Suisse and VTB) and of the supplier of all the goods and services purchased with the loans (the Lebanon-based company Privinvest) violated the norms on procurement. All of this was known from when Kroll submitted its report in April 2017.
Buchili insisted that criminal proceedings are quite independent of the TA's investigation of financial offences.