IMF mends fences with disgraced Mozambique

The IMF has approved financial assistance for Mozambique, the first such aid by the fund to the country after a six-year suspension. BBC News reports that the suspension was imposed after the country was found to have more than $2.7bn of undisclosed state debts – money which the government borrowed to set up a sophisticated tuna industry – to buy trawlers and military patrol boats, but much of it was allegedly diverted to corrupt officials. The son of Mozambique's ex-President President Armando Guebuza and 18 others went on trial last year over the scandal. The IMF board has approved a three-year $456m aid programme that will support economic recovery and help reduce public debt. ‘We will also obtain additional resources for the financing of the economy, not only the resources in the agreement financed by the fund, but it also opens the window of opportunities for funding by other partners,’ said Mozambican Prime Minister Max Tonela.

Legalbrief reports that Credit Suisse and VTB of Russia granted loans to three shelf companies – Proindicus, Ematum (Mozambican Tuna Company) and MAM (Mozambique Assets Management). The loans were only possible because the banks carried out no due diligence on the three companies, which had no business record and were effectively run by the Mozambican security service. In addition, the government of the day, under Guebuza, issued illegal loan guarantees, in violation of banking laws.