Mozambique Court Delivers Verdicts in $2bn “Hidden Debt” Corruption Scandal
In a landmark corruption trial, a Mozambican court began delivering verdicts on Wednesday, April 27, 2022 against 19 high-profile defendants accused of financial crimes related to illicit state-backed loans worth over $2 billion. This case, known as the “hidden debt” scandal, had significant implications for the impoverished African nation’s economy, leading to a sovereign debt default and currency collapse.
Landmark Corruption Trial
Among the accused were former state security officials and the son of a former president. They stood charged with various financial crimes, including money laundering, bribery, and blackmail. The trial, which started in August 2021 and concluded in March 2022, saw Judge Efigenio Baptista deliver a 1,388-page judgement, with the hearing expected to last five days to read.
All 19 accused, present in court, maintained their innocence.
State-Owned Tuna-Fishing Fleet and Surveillance Vessels
The defendants’ activities were linked to the acquisition of a state-owned tuna-fishing fleet and surveillance vessels using undisclosed loans from international banks during 2013 and 2014. These loans had been concealed not just from the public but also from the Mozambican parliament.
Shocking Discovery and Repercussions
The scandal came to light in 2016 when the “hidden debt” was disclosed, leading international donors like the International Monetary Fund (IMF) to withdraw financial support. The crisis resulted in a default on the country’s sovereign debt and a near-collapse of its currency, the metical.
Independent Audit and Losses
An independent audit revealed that $500m of the borrowed funds had been misappropriated and remains unaccounted for.
Key Figures and their Roles
- Manuel Chang: Former Finance Minister who authorized these loans. Current whereabouts are unknown, and he awaits extradition to the United States for allegedly utilizing the US financial system to carry out the fraudulent scheme.
- Armando Guebuza: Former President during the period when these loans were contracted. Testified at the trial but was not charged himself.
- Ndambi Guebuza: His eldest son was among the defendants.
Public Interest and Impact
The proceedings attracted significant public interest, with over 100 people gathering in the special courtroom, set up in a white marquee on the grounds of a high-security jail in Maputo.
Civil Society’s Perspective
Local civil society organizations, like Mozambique Budget Monitoring Forum and N’weti, welcomed the trial. Denise Namburete, the founder of N’weti and a civil society representative, shared her thoughts from Maputo with Al Jazeera:
“This is the first time the public sees high-level government officials being indicted and judged at the court. It sends out the message that high-level government officials can be held accountable and restoration of trust in the judicial system.”
Need for Stringent Sentences
Anti-corruption activists emphasized the need for stringent sentences:
“The conviction must be robust enough to ensure it isn’t annulled or significantly reduced in a second trial,” - Borges Nhamirre, a researcher at Public Integrity Center.
Political Influences and Hope for Justice
Adriano Nuvunga, the head of the Centre for Democracy and Development, warned of potential political influences on the sentences:
“I believe there is an understanding that this is a political trial, but it’s a crucial step in the fight against corruption,” - Denise Namburete.
Although most of the individuals involved in the case have yet to be held accountable, this trial marks an important milestone in Mozambique’s efforts to combat corruption.