When greed kills a na­tion

CityPress - - Voices - Mondli Makhanya voices@city­press.co.za

It was not that long ago that Mozam­bique was the dar­ling of global fi­nan­cial in­sti­tu­tions and in­ter­na­tional in­vestors. Boast­ing av­er­age growth of just 6.3% in the past 15 years – which peaked at over 13% in 2004 – the coun­try was the poster child of the cor­rect ap­pli­ca­tion of pru­dent eco­nomics. Fac­tors driv­ing the growth were po­lit­i­cal sta­bil­ity, in­vest­ment in in­fra­struc­ture, and the dis­cov­ery of gas re­serves and other min­er­als. What was also a cru­cial in­gre­di­ent dur­ing this time was pol­icy pre­dictabil­ity dur­ing the ten­ure of for­mer Pres­i­dent Joaquim Chissano.

Those were happy, op­ti­mistic times in the land of Ed­uardo Mond­lane and Samora Machel. Mozam­bi­cans walked with con­fi­dence, know­ing that even as they were still ranked among the poor­est na­tions in the world, their coun­try was slowly climb­ing out of mis­ery.

That mood has changed sig­nif­i­cantly in re­cent years and very dra­mat­i­cally in re­cent months. To­day Mozam­bi­cans are de­cid­edly de­pressed. The ten­ure of Ar­mando Gue­buza, Chissano’s suc­ces­sor, was char­ac­terised by ram­pant cor­rup­tion among the gov­ern­ing elites. Although no di­rect cor­rup­tion could be at­trib­uted to him while he was in of­fice, his fam­ily’s fin­ger­prints were all over in­fra­struc­ture de­vel­op­ments and mega projects. Gue­buza also over­saw the de­scent of Fre­limo from a proud lib­er­a­tion move­ment into a cesspool of greed and self-ag­gran­dis­e­ment.

By the time Gue­buza left last year and gave way to Felipe Nyusi, Mozam­bi­cans had come to ac­cept that he had been God’s way of pun­ish­ing them for a sin they could not quite put their fin­gers on. They were glad to see the back of him and happy that he could do no more harm.

They did not bar­gain for the bul­let that would strike the na­tion in April this year. That is when it was re­vealed that Gue­buza, his fi­nance min­is­ter and oth­ers had gone be­hind Mozam­bi­cans’ backs and se­cretly bor­rowed nearly $2 bil­lion (R27 bil­lion) from over­seas in­sti­tu­tions.

The amounts in­cluded an $850 mil­lion loan for ship­ping com­pany Ema­tum, $622 mil­lion for mar­itime se­cu­rity com­pany Proindi­cus and $525 mil­lion for MAM As­set Man­age­ment.

Gue­buza and his mates hid the loans so well that un­til April, nei­ther Par­lia­ment nor the govern­ment nor part­ners such as the In­ter­na­tional Mon­e­tary Fund (IMF) had any idea they ex­isted. How they planned to hide the debt for­ever is a great mys­tery. What is an even greater mys­tery is how they spent the money, be­cause the ships they sup­pos­edly bought were not up to stan­dard and are in dis­use. The money seems to have been chan­nelled around in strange, con­vo­luted ways.

The IMF and other de­vel­op­men­tal part­ners have with­drawn as­sis­tance to Mozam­bique pend­ing a foren­sic au­dit into the whole af­fair.

The im­pact on the Mozam­bi­can econ­omy has been im­mense. The global eco­nomic slow­down and mis­man­age­ment un­der Gue­buza have slowed growth to about 3.6% and the World Bank is warning of “sig­nif­i­cant down­ward risks”. The bank says even though the com­ing on stream of new gas dis­cov­er­ies will push growth to 6.9% by the end of 2018, this will have lit­tle im­pact on the econ­omy. The strain of Gue­beza’s unau­tho­rised debt is just too bur­den­some on the fis­cus. The April rev­e­la­tions, the re­ac­tion of in­ter­na­tional part­ners and the like­li­hood of Mozam­bique de­fault­ing or hav­ing to re­struc­ture debt re­pay­ments have seen the value of the met­i­cal plung­ing rapidly against the US dol­lar, the euro and the rand. Since Mozam­bique im­ports heav­ily from these three mar­kets, the pain is be­ing acutely felt by the peo­ple.

The in­fla­tion rate has gone from 4.74% in Oc­to­ber last year to 24.9% this past Septem­ber. Se­vere aus­ter­ity mea­sures now be­ing in­tro­duced by the govern­ment in­clude a com­plete freeze on all nonessen­tial spend­ing. The only items that are com­pletely safe from the freeze are pub­lic ser­vice salaries and so­cial grant pay­ments.

In case you are by now yawning, there is a point. This week this lowly news­pa­per­man ar­rived back from a 24-hour so­journ to Ma­puto (dur­ing which he mer­ci­fully missed a non­event at Mbombela Sta­dium) and found a na­tion in the grips of state cap­ture frenzy. The de­tails of how a mot­ley clique had at­tempted to mount a silent coup were all over the news, prompt­ing a wave of anger and in­dig­na­tion among cit­i­zens. South Africans al­ready had ex­ten­sive knowl­edge about the spi­der­web of cor­rup­tion cen­tred on Pres­i­dent Ja­cob Zuma and the Sax­on­wold she­been own­ers, but this was con­crete con­fir­ma­tion of the ex­tent of the rot.

The sto­ries of the cap­ture of the Mozam­bi­can state by Gue­buza and his pals and the im­pact thereof were still vivid in my mind as the Pub­lic Pro­tec­tor’s re­port played out through the night and the fol­low­ing days. What the Mozam­bique ex­pe­ri­ence teaches us is what can hap­pen to a na­tion if greedy crews are al­lowed to seize the state for their own pur­poses. These crews be­come brazen and ar­ro­gant, and bring un­told harm upon the cit­i­zenry.

It may have taken a while for us all to wake up to the Gupta dis­ease, but we did.

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