Mozambique 22 June: ProIndicus revelations bring more questions than answers
Good afternoon. Further questions must now be asked of the banks, secret companies, and Mozambican authorities who put together the ProIndicus, EMATUM, and MAM deals following new revelations by Zitamar News yesterday.
A leaked document produced by Credit Suisse in 2013 to support its financing of ProIndicus shows that the supplier to all three companies, Iskandar Safa’s Privinvest group, offered Mozambique a comprehensive coastal security solution for $372 million. How, then, was the additional $1.6 billion spent?
SEE: Leaked Credit Suisse doc puts complete Mozambique coastal security contract at only $372m
Let’s put to one side the persistent rumours that some of the funds were expropriated, and take what we have been told so far at face value. ProIndicus, we are asked to believe, ultimately borrowed $622 million to set up a coastal protection service - $250 million more than they were initially told it would cost.
Mozambique’s secret services then went back to Credit Suisse and VTB – or vice versa – with the plan for EMATUM. When that deal came to light, we were asked to believe that $850 million had been spent on a tuna fishing fleet. The government later said $350 million was spent on defence – and then changed its mind again, saying $500 million should be taken onto the defence budget.
But given that ProIndicus had already drastically over-budgeted for a comprehensive offshore defence solution, what was that $500 million for? EMATUM’s investors, which include European pension funds and other institutions, are left having to conclude they pumped half a billion dollars into miscellaneous defence spending.
Another key question is why all of EMATUM’s money, most of which, we are now told, was defence ministry spending, was transferred to a Privinvest company in 2013. What is Privinvest’s role in Mozambican defence procurement?
Finance minister Adriano Maleiane asked us to believe, in one of his mealy-mouthed responses to parliament, that paying up front for these maritime defence contracts (and whatever else they include) is normal. But experts tell us it is not.
Maleiane is in a difficult position – being held to account for the actions of the previous government while his predecessor Manuel Chang, who was in the job when the deals were done, keeps quiet on the parliament benches. Mozambicans need to hear from Chang what he knew, and from others – including the then-defence minister who currently occupies the highest office in the land. Until that happens, it is hard to imagine donors unfreezing aid.
Perhaps the IMF could share with the Mozambican public the facts it has found in its latest mission to Maputo. Having demanded greater transparency from Mozambique at its Spring Meetings in April, the IMF agreed to collaborate with the Mozambican government in keeping secret the identity of the lender of the Interior Ministry’s secret $221 million loan. We now have another opportunity see how far the Fund’s commitment to transparency goes.
So many questions, and still so few answers.