Realist, not conformist analysis of the latest financial, business and political news

Mozambique’s Tuna Bonds Are Coming Home To Roost

One of the most outrageous, barefaced even, bits of stealing from the public purse was the story of Mozambique and the Tuna Bonds. The country borrowed money on the international markets to buy boats to go fishing for tuna. And why not? There’s tuna in the territorial waters, running a canning operation isn’t particularly high tech.

Well, one reason is perhaps don’t get the government doing it. If it’s a good idea, if there’s a profit in it, then it’s possible to define those fishing rights and then put them up to tender. Collecting a rent for having done so – just like a government most certainly should earn money from a natural resource but there’s no reason why they should be the people doing the extraction.

This is the sort of thing that people would have said, obviously enough. If the government had asked the usual aid organisations they might have said no – or perhaps do this some other way. So, they didn’t ask. In fact, they didn’t even tell.

They borrowed the money, spent it and stole some significant portion of it along the way:

[perfectpullquote align=”full” bordertop=”false” cite=”” link=”” color=”” class=”” size=””] The scandal came to light in 2016, a year after the ex-leader Guebuza left office following a 10-year tenure. It is alleged that while he was still in power, the government in Maputo had taken out loans amounting to $2 billion to buy a tuna-fishing fleet and surveillance ships, but hid the transaction from parliament and international donors. An independent audit found that a quarter of the loan amount was diverted, and unaccounted for. When the debt was revealed, Mozambique — which is one of the world’s poorest countries and relies on donor aid — was plunged into the worst financial crisis in its history as donors froze contributions. The United States alleges at least $200 million was spent on bribes and kickbacks, including $12 million for former finance minister Manuel Chang, who allegedly signed off the debt. [/perfectpullquote]

Why didn’t they borrow through the normal channels? Because of they did it’s more difficult to steal. Off the books transactions are always easier to squirrel away.

It is, of course, worse than just this. They didn’t just steal 25% of it. They wasted the other 75%. There is no tuna fleet earning money to pay back the debt. That debt now just sits on the usual government books and has to be paid back out of the normal government tax revenues.

Sure, we might say that some of the poorest people in the world shouldn’t have to pay that back. But on the other hand we’re not in colonial times any more, are we, when the indiscretions of the locals are just written off for they’re not culturally developed at yet? This is a sovereign independent country, the rulers of which make decisions and should be held accountable for.

0 0 votes
Article Rating
Notify of

1 Comment
Newest Most Voted
Inline Feedbacks
View all comments
Jonathan Harston
Jonathan Harston
5 years ago

Reminds me of my old local council days. We lent Social Services a lump of money so they could fix their billing and accounting system. Two years later we asked for the loan to start being repaid. Loan? What loan? We’ve spent that. What on? Plugging the finance gaps due to us not having a functioning billing system.
So, yes, there was a hole in the budget due to that not-a-loan disappearing, and a hole in the budget due to SS not being able to collect the income it was supposed to be collecting.

Would love your thoughts, please comment.x