Mozambique: Zandamela Re-Appointed Governor of Central Bank

Maputo — Mozambican President Filipe Nyusi on Monday appointed Rogerio Zandamela to a second five year term of office as governor of the Bank of Mozambique.

Zandamela was first appointed in August 2016. Previously, he had worked at the International Monetary fund (IMF), from 1988 to 2016.

Zandamela took over at the central bank in the immediate aftermath of the scandal of Mozambique's "hidden debts" - the loans of over 2.2 billion US dollars obtained by the fraudulent companies Proindicus, Ematum (Mozambique Tuna Company) and MAM (Mozambique Asset Management) on the basis of illicit loan guarantees granted by the government of the then President Armando Guebuza, and signed by his Finance Minister, Manuel Chang.

The scandal pushed Mozambique towards bankruptcy. The IMF, protesting that the government had concealed the true size of its foreign debt, suspended its programme with Mozambique, and all the 14 donors and funding agencies who had provided part of their aid in the shape of direct budget support suspended all further disbursements.

To this day, direct budget support has not resumed, costing Mozambique several hundred million dollars a year. The Mozambican currency, the metical, depreciated sharply against other currencies, and inflation rose alarmingly.

The Bank of Mozambique, under Zandamela's management, must take much of the credit for pulling Mozambique back from the brink of economic collapse. Tough monetary policies (which at one stage involved very high interest rates) stabilised the metical, and inflation was brought under control. In June, inflation was running at 5.5 per cent a year.

Zandamela tried to discipline the commercial banks, and in July he took on the oldest bank in the country, Standard Bank. The Bank of Mozambique accused Standard, which is based in South Africa, of fraudulent practices, including manipulating the exchange rate and setting up an illicit payments network headquartered outside the country.

Standard, and two of its senior executives, were fined large sums, and it was temporarily suspended from dealing in foreign exchange.

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