The Mozambican Public Prosecutor, during the first week of hearing, has alleged accused Armando Ndambi Guebuza, the eldest son of the former President Armando Guebuza, of accepting bribe, an amount of US$33 million (approx. €28 million).
The Public Prosecutor described, while reading out the indictment, that the 19 defendants in the case of the “hidden debts” had teamed up, forming a “gang” to steal from the state, leaving the country in a difficult economic situation.
“Whoever associates in a gang to steal from the State is not at the service of the State. The defendants acted in collusion, putting their private interests above the interests of the State,” said Ana Sheila Marrengula, the Public Prosecutor who read out the indictment.
The conduct of the 19 defendants, Ana Sheila Marrengula said, siphoned off US$2.7 billion (equivalent €2.3 billion) from the state by raising it from international banks through guarantees provided by the government. “They all damaged the country and left it in a difficult economic situation,” the prosecutor emphasized.
The prosecution mainly targeted Armando Ndambi Guebuza, the accused and oldest son of Armando Guebuza, Mozambican Head of State at the time of these facts.
According to the Public Prosecutor’s Office, Armando Ndambi Guebuza was the one who received the biggest share of the money embezzled from the loans mobilized with State guarantees, having pocketed US$33 million (equivalent €28 million). With the money, the former President’s eldest son bought top-of-the-range cars, some of which he gave to friends, real estate inside and outside the country and paid for leisure trips.
Armando Ndambi Guebuza used his influence with his father to make the scheme possible and to take advantage of his wealth for himself and his associates.
Ana Sheila Marrengula also attacked the three directors of the State Information and Security Service (SISE) accused in the case, accusing them of having also “stolen from the State” which they were supposed to protect.
The defendants used the threats and concerns of SISE and the Government with the protection of the Exclusive Economic Zone (EEZ) to devise a scheme to pay bribes financed with money intended for the security of Mozambique’s territorial waters. According to the Public Prosecutor’s Office, the various crimes the defendants committed include criminal association, influence peddling, passive corruption, money laundering, embezzlement, abuse of office or function and document forgery.
Ana Sheila Marrengula asked for the defendants to be convicted and for the Mozambican state to be compensated for the damage caused, noting that the country is now obliged to pay back loans from which it did not benefit.
In addition to Armando Ndambi Guebuza, Inês Moiane, Armando Guebuza’s private secretary, and his former political adviser Renato Matusse were also accused. The list of the accused also include former SISE Director General Gregório Leão and his wife Ângela Leão, former director of economic intelligence António Carlos do Rosário and former director of the Office of Studies and Projects Cipriano Mutota. Twelve of the 19 defendants are on provisional release, while seven are in remand awaiting trial.
The “Hidden Debts” were contracted between 2013 and 2014 from the British subsidiaries of investment banks Credit Suisse and Russian VTB to the Mozambican state companies: Proindicus, Ematum (Mozambique Tuna Company) and MAM (Mozambique Asset Management).
The loans were secretly endorsed by the Frelimo government, led by Armando Guebuza, without the knowledge of parliament and the Administrative Court. The secrecy and corruption surrounding the loans dealt devastating blows to Mozambique’s credibility and reputation. It was the Wall Street Journal first revealed the hidden debt in April 2016.
The effect was that the International Monetary Fund (IMF) suspended its programme with Mozambique, accusing the government of concealing the truth about the true size of the country’s foreign debt. All 14 donors and funding agencies that provided at least some of their aid to Mozambique in the shape of direct budget support, suspended all further disbursements. Today, more than five years later, direct budget support has not resumed.
This was a major blow to the public finances – hundreds of millions of dollars a year in budget support were lost at a stroke, and this proved more damaging than the repayment of the loans, which has so far been limited.
According to several reports, the Gauteng High Court has postponed consideration of a request to suspend Manuel Chang’s extradition to Mozambique, leaving the former Finance Minister in detention in South Africa until September 17.
Chang has been in prison since December 2018, after arrested on a warrant while on his way from Maputo to Dubai and transiting through OR Tambo International Airport, in South Africa at the request of the United States. Both the United States and Mozambique applied for Chang’s extradition early 2019.
Judge Edwin Molahlehi decided on August 27) to postpone to that date the examination of the Budget Monitoring Forum’s (FMO) application on the extradition of Manuel Chang to Mozambique.
The Mozambican Justice Ministry has opened a separate case in which several other people are suspected of participating in the scheme, including former Finance Minister Manuel Chang, former directors of the Bank of Mozambique, and former executives of Credit Suisse, the bank that made the loans possible. Legal proceedings have been opened both in the United States and England.
President Filipe Nyusi has consistently promised to stamp out graft and corruption in the country. His government has not taken adequate measures toward these. In a 2018 survey by the International Monetary Fund indicated that the economy was growing steadily but three-quarters of Mozambicans said their economic position had remained the same or become worse due to deep-seated corruption, decaying economy and partly by natural disasters.
Mozambique is a member of the Southern Africa Development Community (SADC). Mozambique is a country located in Southeast Africa bordered by the Indian Ocean to the east, Tanzania to the north, Malawi and Zambia to the northwest, Zimbabwe to the west, and Eswatini (Swaziland) and South Africa to the southwest.