Mozambique's ruling party has kept radiosilence since officials in the United States indicted the nation's former finance minister and former Credit Suisse bankers in a $2 billion hidden loan and bribery scandal. Since Manuel Chang was detained and sought for US extradition, the Frelimo party under President Filipe Nyusi has "closed ranks", according to a new FT article.
In an US indictment released this month, Chang was accused of approving a scheme for Mozambique government officials to siphon at least $200 million from a series of loans by shell companies, including one tuna fishing company.
It seems unlikely that Mozambique will try to clawback any of the money from the scandal, as countries like Malaysia and Angola have done with similar scandals. Adriano Nuvunga, head of ADS, a Mozambican civil society group stated: “I don’t see him cleaning the system like the Malaysians or the Angolans, but rather a survival strategy. Here we are discussing the survival of Frelimo as a political party and as a government. You have to take that into account.”
The Frelimo party has been in power in Mozambique since 1975 and sees the scandal as crucial to its survival, while the names of those who are to be investigated over the loans include some "powerbrokers" that could "overshadow" the President himself. The list includes "a former central bank governor, intelligence chiefs and civil servants who served under Armando Guebuza, president when the hidden debts were issued".
Criminal charges are not being sought and Mozambique is opposing the extradition of Chang, arguing that trying him at home may be a better option.
The corruption scandal started when Mozambique discovered gas in 2009. About two years later, one of the world's largest ship builders, Privinvest, pitched government officials on a project to secure the country's shores. It included things like coastal radar, patrol vessels and tuna boats. Mozambique has one of the continent's longest coastlines.
As for the bribery, it appears to have been caught on tape, clear as day: the US indictment indictment quotes a government official telling Jean Boustani of Privinvest:
“There will be other players whose interest will have to be looked after eg ministry of defence, ministry of interior, air force, etc . . . In democratic countries like ours people come and go, and everyone will want to have his/her share of the deal while in office, because once out of the office it will be difficult.”
Boustani then arranged brides worth $50 million for officials, according to the indictment. Boustani apparently didn't do a great job of concealing the bribes, either: they were referred to in code as "$50 million chickens". This sum was only part of the bribes that were eventually laundered with the help of Credit Suisse bankers, according to the indictment.
Further, the $200 million total is also probably an understatement. Independent analysis performed by Kroll in 2017 was unable to account for $500 million of loans. Meanwhile, tuna boats have sat idle in the country‘s capital while at the same time Privinvest has denied overpaying. Boustani also denies wrongdoing.
The speculation in Mozambique is that Nyusi, at the time a defense minister, must have known of the looting taking place.
The IMF, a major funder of some of the hidden loans, cut ties with the country when the full extent of the country's debt - and corruption - was uncovered in 2016. That set off a financial crisis and the debts went into default. As of now, the government has made some progress on a restructuring program, helped along by players like Exxon and Anadarko, who are targeting -what else - gas development in the country, and so we begin one again from square one.