Maputo, Mozambique — The World Bank has denied that it opposed the Mozambican state's intervention in the country's third largest commercial bank, the Austral Bank, in early April when private shareholders, unwilling or unable to re-capitalise the bank, pulled out.
On Wednesday the independent newsheet "Metical" carried an article which claimed that the World Bank was hostile to this intervention.
"Metical" wrote that President Joaquim Chissano himself revealed the World Bank's attempted interference at a meeting he held with Mozambican economists on Monday night.
The paper said Chissano told the economists that the World Bank even requested that the central bank intervention be suspended immediately, and that Austral be left to find its own way out of the crisis.
However, the World Bank Maputo representative, James Coates, denied this.
Cited in Friday's issue of "Metical", Coates said the World Bank had always held that the central bank's intervention in Austral, appointing an interim Board of Directors, was "the correct procedure."
He added that the privatisation of the People's Development Bank (BPD - the name of Austral when it was under state ownership) - "did not give the expected results."
It was therefore "important not to repeat the same experience," he said.
Did this mean that the World Bank wanted Austral to revert definitively to state ownership? Asked on Friday for clarification on this, Coates said: "Next time the privatisation should be successful. It should be set up in such a way that the bank operates efficiently and profitably."
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The problem with Austral/BPD dates back to the mid-1990s when the World Bank and the IMF were pushing the Mozambican government into selling off the banks, without due preparation.
Both the state-run commercial banks were privatised, the Commercial Bank of Mozambique (BCM) in favour of a consortium put together by Portuguese businessman Antonio Simoes, and the BPD in favour of the Malaysian Southern Bank Berhard, and a grouping of Mozambican companies called Invester, under former Industry Minister Octavio Muthemba.
The net result of the two privatisations is a hole the size of 300 million dollars in the Mozambican financial system, and growing domestic indebtedness as the Mozambican government raises money to rescue the banks through the issue of treasury bonds.
In his "Metical" interview, Coates claimed that the Austral Bank's provisional board of directors "is acting in the necessary way, since it is now demanding the payment of debts, notably from the portfolio of non-performing loans. It is important that the money due on these loans be collected."
He said that transparency of management is "very important" - particularly so in the case of Austral, since rescuing the bank "represents possible expenditure from the state budget."
