The arrest of a former finance minister has raised some concern in Angola where some firms indicted in Mozambique are present (by Arimando Domingos)

by Arimando Domingos

Thearrest of a former finance minister as well asthe indictment of several other government officials has bust wide open thelevel of government corruption in Mozambique and to an extent, raised someconcern in Angola where some firms indicted in Mozambique are present.

In Mozambique, the turn of events offer a stern test to the rulingparty’s prospects in general elections later this year.

The arrest of former minister, Manuel Chang and alleged accomplicesmaintains the Southern African country’s poor international reputation, on the back of a tainted status as a hub for money laundering and risinggraft.

A minister from 2005 to 2015, Chang is detained in South Africa oncharges bordering on fraud and money laundering for his allegedinvolvement in a US$2 billion scandal during Mozambique’s debt crisis.

There were revelations in 2016 of a hidden debt of over $1 billion,prompting the International Monetary Fund (IMF) and foreign donors to cutoff aid. About $200 million was allegedly spent on bribes and kickbacksin loans to state-owned companies in Mozambique.

According to the United States indictment, loans were secured from Credit Suisse, the Swiss multinational investment bank and financial servicescompany, and Russia’s VTB Bank. In a related development, Middle East-basedPrivinvest Group signed contracts to supply ships to Mozambiquebut never delivered.

Alongside Chang’s arrest in South Africa at the end of 2018, three formeremployees of Credit Suissewere arrested in the Dominican Republic andextradited to the US, which also seeks Chang’s extradition.

The ex-employees of Credit Suisse are Andrew Pearse, Surjan Singh andDetelina Subeva.

Another suspect, Jean Boustani, has been arrested in the US. He is aLebanese citizen who worked for an Abu Dhabi-based contractor of theMozambican companies. French-Lebanese billionaire, Iskander Safa isfounder of the contractor and was fingered in a 2013 order for fishingboats believed to have been used to hide a secret arms deal forMozambique. The presence of the-then France President, Francois Hollande,and Mozambique counterpart, Armando Guebuzza, indicated an interest forFrance to get security access of the Mozambique waters.

At least 18 other unnamed officials from Mozambique have been implicatedin the debt scandal.

Chang is arguably the most high-profile official to come under probe forcorruption since independence from Portugal in 1975.“The prospect of Chang appearing in a US court to spill the beans on theother Mozambican government officials who apparently received even biggerbribes is clearly terrifying the ruling Mozambique Liberation Front(FRELIMO),” stated Peter Fabricius, Institute for Security StudiesConsultant.

Local socio-economic commentator, AlmiroMarcelino, is also of a similaropinion.“This is set to open a can of worms in the corruption that runs throughthe politics of this country,” he said.“It has always been reported Mozambique is laden with corruption but thishas mostly been on paper. The implication of Chang and others unnamed istestament to the depth of graft in our society,” Mercellino added.Mozambique has become notably more corrupt in recent years, according tothe Corruptions Perception Index published by the leading NGO fightingagainst corruption, Transparency International (TI).

Centre for Public Integrity (CIP), TI’s Mozambique chapter, whichreleased the index, reported that Mozambique’s score fell from 31 in 2015,to 27 in 2016, to 25 in the 2017.TI gives each country in its index a score ranging from zero (totallycorrupt) to 100 (absolutely clean).In terms of ranking, Mozambique is in 153rd position out of 180countries.

TI says corruption is a major underlying cause of the country’s malaise,and has been recently estimated to have cost the country nearly US$5billion between 2002 and 2014.“Blighted by endemic corruption, Mozambique presents a textbook case of a country whose legal and institutional framework has been brought intoline with international good practice, but whose good governance windowdressing is unable to compensate for blatant abuses of power,” indexauthors, Elisa Klein and Ariane Wolf, stated.

The Business Anti-Corruption Portal said forms of corruption range frompetty bribes to deeply entrenched patronage systems, and donor countrieshave shown dissatisfaction over the country’s anti-corruption efforts.

Political analyst, ElinaChavango, said the government of President FelipeNyusi’s silence on the arrest of Chang was conspicuous. That was beforeMozambique also requested the extradition of Chang with his next courtappearance set for February 5.This past weekend, Nyusi, and South African counterpart, Cyril Ramaphosa,met at the Mozambican parliament but respective delegations did notprovide information to media regarding the meeting, which lasted hours.The meeting was to discuss the arrest of South African, Andre Hanekom,for alleged involvement in terror by Islamist groups in the northern CaboDelgado in Mozambique.

Angola president, Joao Lourenco, was present, with his country headingthe Southern African Development Community (SADC) troika of Defence andSecurity Cooperation.

“The silence (on Chang’s arrest) is striking. One is left wondering ifsilence means consent that indeed the allegations are true or perhaps it’san admission of complicity on the part of the president,” said Chavango.

Chang is still a legislator for the ruling Front of the Liberation ofMozambique (FRELIMO).Nyusi was defence minister when the loans were agreed and he signedimportant contracts over the deals.However, former president, JoaquimChissano, and former finance minister,Tomaz Salomao, have called for justice to prevail.

The scandal comes at an inopportune for the ruling party with generalelections set October.“The unraveling crisis around the Credit Suisse controversy puts theruling party in bad stead ahead of polls, also with the oppositionMozambique National Resistance (RENAMO) enjoying a new lease of life,”Mercellion said.

RENAMO recently elected OssufoMomade as the party president andpresidential flag-bearer in the election.He replaces Afonso Dhlakama, who last May after a heart attack.

The bribery scandal in Mozambique has seen the spotlight also shift toAngola, another ex-Portuguese colony. In 2016, Privinvest, announced thestart of a major shipbuilding and maritime economy programme with Angola.

The programme would initially see Privinvest provide a range of vesselsfor the Angolan Navy. Privinvest is to jointly develop and operate ashipyard in Angola.

Privinvest also signed a memorandum of understanding with government todevelop hydrokinetic energy in the country, to provide access toelectricity to 14 million Angolans by 2025. No progress has been made orany news provided since the announcement.

Analyst warned the fact that Angola signed deals with Privinest whencurrent president, Lourenco, was defence minister, might therefore alsoconcern investors, especially since the government never confirmed theinvestment.

Furthermore, in May last year, Credit Suisse announced a $700 millionloan to Angola.“If Lourenco is serious about eradicating corruption, he should becareful with who he deals with and how this may look to the outside,”analyst Miguel Sanz said.

Distributed by APO Group on behalf of CAJ News Africa.

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