Mozambique: INSS Chairperson to Face Trial This Week

Maputo — The chairperson of Mozambique's National Social Security Institute (INSS), Francisco Mazoio, goes on trial later this week, according to a report in Monday's issue of the Maputo daily "Noticias".

Mazoio has been charged in a case involving the company CR Aviation, which allegedly benefitted illicitly from INSS funds.

Charged alongside Mazoio are the former general manager of the INSS, Baptista Machaieie, and the former general manager of CR Aviation, Miguel Angelo Cuado Ribeiro.

The former chairperson of the Confederation of Mozambican Business Associations (CTA), Rogerio Manuel, who owned 49 per cent of CR Aviation, would also have been charged, but he died in a helicopter crash earlier this year.

The three accused face charges of abuse of office and embezzlement. The deal between CR Aviation and the INSS goes back to the final year of the previous government, under President Armando Guebuza, when the Labour Ministry, which oversees the INSS, was run by Helena Taipo, who is now under detention in connection with several unrelated corruption scandals.

The INSS and CR Aviation signed a memorandum of understanding in 2014, which envisaged using INSS funds to purchase four aircraft for CR Aviation at a cost of 84 million meticais (about four million US dollars, at the exchange rate of the time).

Alerted to this deal by press reports in 2016, the public prosecutor's office investigated and found a damning range of irregularities which constitute criminal offences. Thus, the Memorandum of Understanding was not submitted for approval to the Administrative Tribunal, the body that inspects the legality of public expenditure.

CR Aviation had never submitted business plans explaining how the money the INSS invested in the company would be repaid. Additionally, the INSS managers decided to grant the money to CR Aviation without even consulting the INSS Board of Directors.

The public prosecutors also began proceedings in the Maputo branch of the Administrative Tribunal to hold the INSS managers responsible for the return of the money unduly paid to CR Aviation.

This case might have gone unnoticed had it not been for some investigative journalism in early 2016. Those reports said that the INSS intended to invest US$7 million in CR Aviation, a claim denied at the time by Manuel. Journalists discovered that the deal had not been completed, but, by the time it was made public, 84 million meticais of INSS funds had been invested in CR Aviation.

The INSS is not allowed to invest in companies unless their shares can be traded on the Mozambique Stock Exchange (BVM), which was never the case with CR Aviation.

Belatedly Mazoio, in March 2016, demanded the money back. But this did not satisfy the prosecutors.

CR Aviation is one of several dubious investments by the INSS. The most notorious was the decision to sink social security funds into a tiny bank, O Nosso Banco ("Our Bank") which failed in 2017. The Bank of Mozambique was obliged to step in and liquidate this bank.

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