Mozambique’s tuna fishing fleet needs to be refitted to meet European Union standards, Finance Minister Adriano Maleiane said on May 23, 2016 piling more costs onto a project at the centre of a debt crisis.
The boats were paid for out of an $850 millionoan arranged in 2013 by Credit Suisse and Russia’s VTB to finance “fishing infrastructure”. The cash came in the form of a government-backed bond to state tuna-fishing company Ematum.
Nearly three years later, the fishing project, initially touted as self-sustaining, has severely underperformed and added to a sovereign foreign debt mountain equal to 80 percent of GDP that could bankrupt the [country]….Not only did Ematum fall short of its targets but $500 million of the “tuna bond” was subsequently designated for “maritime security” and reallocated to the defence budget.The 24 boats, which were built in France, will now be modified in South Africa so they can export tuna to Europe…Mozambique’s government cannot afford to have them all upgraded at once. “The costs involved in refitting the boats are high, hence the work is being done in phases,” Maleiane was quoted by the state news agency as saying.
Deepening the mire, a further $1.35 billion of previously undisclosed government-backed debt emerged last month, prompting the International Monetary Fund and Western governments to suspend budgetary aid support. The loans included $622 million for Proindicus, a state-owned company tasked with providing maritime security, and a $535 million for Mozambique Asset Management (MAM) to build a shipyard for gas projects…The hidden loans have exposed widespread government mismanagement that risks pushing a promising African economy, one that emerged from a ruinous 1976-92 civil war, into crisis.
Excerpts from Mozambique to refit tuna fleet, compounding debt crisis, Reuters, May 24, 2016