Mozambique 29 April: Let them eat tuna

Good afternoon from a still-peaceful Maputo. Things could yet change, but at the time of writing it seems the protests planned for today have not materialised. The city has the feel of a public holiday - an extension of the already long weekend for most people here.

One reason for the absence of public demonstrations, apart from the lack of any coherent organisation, may be that the public debt crisis is still too abstract to really propel people into action. The hidden debt scandal is enormous, yes; but as yet there has been no specific trigger event, like rises in the price of bread or public transport, to really provoke public anger. The people want tuna on the table, but aren’t yet ready to go on strike for it.

The government has also been increasingly transparent about its hidden debts over the last week. On Tuesday, government spokesman Mouzinho Saide detailed which companies had borrowed how much, and what for. Two days later, finance minister Adriano Maleiane gave more details on the repayment schedules, and the ownership of those companies.

What he had to say was not reassuring, however. Mozambique’s government is responsible for making payments of more than $300 million – in dollars – every year for the next few years, totalling more than $1.5 billion even before the government has to repay the $731 million that remains of the EMATUM debt.

SEE: Mozambique debt repayments will top $1.5bn before EMATUM bullet hits

Thursday’s press conference to address the nation was led by Prime Minister Carlos Agostinho do Rosario, who spent much of his airtime repeating the same mantras that this government always turns to in times of economic crisis. There’s a global downturn; we need to diversify and become more productive; and conflict with Renamo is hitting the economy. All true – and all irrelevant to the matter at hand.

If the global commodity price downturn hadn’t happened, perhaps the gas companies would have taken their final investment decisions by now, and the ProIndicus and EMATUM boats would have had a job to do in protecting their offshore activities. But how has the downturn affected tuna fishing? And if the same shareholders behind EMATUM can’t get a fishing business up and running, what hope do they have of offering credible and sophisticated offshore security services to global oil and gas companies via ProIndicus and MAM? The government hopes the companies can pay off their own debts, but understandably do not sound confident that they will.

SEE: Mozambique government to assume ‘public interest’ portions of hidden loans

In the words of a new blog published today by USAID’s Speed Programme, “the most serious problem is that these loans and many others have been applied to non-productive purposes; to expenditures that do little or nothing to improve productivity of the Mozambican economy”. Click here to read the blog in full.

If the consequences aren’t being felt yet by the population at large, they soon will be. Donors are falling like dominoes, with the UK and World Bank saying this week that they are holding back donations pending the results of a full investigation, and the EU told Zitamar it would co-ordinate its response with the World Bank and European member states.

SEE: European Union set to follow World Bank lead on Mozambique aid

Meanwhile, plans for new mega-projects keep moving ahead. A new rail line to take Tete’s coal to the coast is now just waiting for government approval, we report today, and will join that of Beira and Nacala if built.

SEE: New Mozambique rail-to-port project awaits government approval

Have a great, peaceful, long weekend.

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