An International Monetary Fund (IMF) delegation landed in Mozambique on Tuesday to follow up on a damning external audit of $2 billion of controversial borrowing by companies controlled by the southern African nation’s intelligence services.

The IMF had stipulated that an audit, by risk management firm Kroll Inc, be carried out for it to resume financial support. However, the audit’s findings remain troubling, in particular that at least $500 million had gone missing.

Although the fallout from the debt, which was not cleared through parliament, has hammered one of the world’s poorest economies, IMF managing director Christine Lagarde singled out the deals as “clearly concealing corruption”.

As such, it is hard for the IMF to resume its relationship as though nothing has happened.

IMF country representative Ari Aisen declined to comment on the week-long mission, other than to say the fund would release a statement at its conclusion.

Credit Suisse, Switzerland’s second-biggest bank, and Russian lender VTB have come under scrutiny for their roles in negotiating the loans, one of which was a $500 million Eurobond issued ostensibly to build a state tuna-fishing fleet.

The project has been a disaster, with most of the fishing boats sitting at anchor in Maputo. The audit found that the operating company, Ematum, did not have the correct fishing permits.

Source: Reuters