The Government requested on Wednesday, June 18, that the European Union (EU) reconsider the resumption of direct support to the State Budget, which has been suspended since May 2016 following the revelation of the so-called hidden debts, reported the Lusa news agency.
“Mozambique reiterated its request for the EU to consider resuming direct support to the State Budget,” said Mário Ngoenha, Director of the National Authorizing Officer’s Office at the Ministry of Foreign Affairs and Cooperation, while reading the joint statement resulting from the partnership dialogue between the Government and the European Union held in Maputo.
In the same statement, the EU emphasized “the need for a favorable environment to increase trade and investment flows with Mozambique.” The hidden debts case dates back to 2013 and 2014, when then Finance Minister Manuel Chang — currently detained in the United States — approved state guarantees for loans contracted by public companies Proindicus, Ematum, and MAM from Credit Suisse and VTB banks without parliamentary knowledge.
The debts, made public in 2016, were estimated at around $2.7 billion (170 billion meticais), according to the Public Prosecutor’s Office. Since then, the State has won several legal cases related to the matter, both in national and international courts. At the time, the country was among the ten fastest-growing economies in the world, according to the World Bank. However, the scandal caused a financial crisis and led to the suspension of external support from several countries and multilateral institutions, significantly impacting public accounts.
During the meeting between the Government and the European bloc, the situation of the armed conflict in Cabo Delgado, in the north of the country, was also discussed. The European Union has been providing support through training and non-lethal equipment supply to the national armed forces. Another topic discussed was the need for judicial system reforms in the context of the ongoing electoral process.
Source: Diário Económico
