africa Banking Economy Finance Mozambique

Mozambique takes legal action over $2 billion loans

Mozambique’s Attorney General has filed a legal complaint against officials and state-owned companies involved in securing $2 billion in loans that were not approved by parliament or disclosed publicly, her office said on Monday.

Investigations into the debt found that the deals violated Mozambique’s constitution, the AG’s office said in a statement.The alleged infringements included failure to comply with the procedures and limits established by law in the issuance of guarantees by the state, it said.

“Thus, on January 26, the (office) submitted a complaint to the Administrative Court on the financial accountability of public managers and state-owned companies involved in the management of financing, supply and service contracts,” the statement read.

It did not name any of the managers or the companies. The Administrative Court is responsible for ruling on the legality of public expenditure. An independent audit of the debt showed in June last year that questions remained on how the $2 billion was used and roughly a quarter of the money remained unaccounted for.

The Attorney General also recommended among other issues a review of legislation related to state businesses and scrutiny and monitoring of projects benefiting from state guarantees.

Source: Reuters

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