On 17 January, campaigners from the Jubilee Debt Campaign handed in a call from 900 people for Credit Suisse to “come clean” about its facilitation of secret loans to Mozambique.
The campaign group is supporting calls by Mozambique civil society organisations for the Mozambique people not to have to repay the loans, and for the Mozambique government officials and lenders responsible to be held to account instead.
The hand-in came the day before Mozambique is expected to default on a $60 million interest payment.
Campaigners delivered the petition to Credit Suisse’s offices in Canary Wharf, demanding that they release all the information they have on the loans and cancel any debt still owed to them.
Sarah-Jayne Clifton, Director of the Jubilee Debt Campaign, said:
“The hidden loans to Mozambique have been devastating for the people of this southern African country. As usual, the poorest people are suffering the most, with rampant inflation in basic goods and cuts to essential public services because of the debt crisis.
“The Mozambique parliament never agreed the loans, so it should refuse to pay them.
“All those responsible need to be held to account, both the officials in Mozambique who signed-off on the loans, and the banks which facilitated them. Credit Suisse and VTB should come clean about their roles, including by revealing who now owns the debts and what they were sold for, and by publishing the due diligence they conducted before agreeing the loans.”
In April 2016 it was revealed that Credit Suisse and Russian bank VTB arranged loans totalling $1.1 billion to two companies in Mozambique with state guarantees. This was in addition to a $850 million bond issuance arranged by Credit Suisse and VTB to another company, on which the interest payment is due on 18 January (following a restructuring of payments which took place in 2016). None of the loans were approved by the Mozambique parliament, breaching the country’s constitution.
The debts, alongside falling prices for Mozambique’s commodity exports and the high value of the dollar, have created a debt crisis in Mozambique. It is suspected that Credit Suisse and VTB have sold on most, if not all, of the loans. The Paris Club group of western government creditors met on 12 January to discuss Mozambique’s debt crisis. The Financial Conduct Authority in the UK has been reported to be investigating both Credit Suisse and VTB.
Mozambique’s crisis highlights the major lack of transparency around lending to governments by UK-based banks and financial institutions. Jubilee Debt Campaign are also demanding that the UK government bring in new regulations requiring all loans issued to governments or with government guarantees under English law to be publicly disclosed at the time they are given.
Both Credit Suisse and VTB have failed to respond to Jubilee Debt Campaign.